1.
The Official magazine of Authentication Solution Provider's Association (ASPA) Nov 2018 | Volume 13 | Issue 35
CELEBRATING
YEARS OF
AUTHENTICATION
1998-2018
The Importance of
Design in the
Authentication Process -
Understanding the User
Experience
Predicting future
banknote designs
By a use-centered
approach
The Evolution of
DOVIDs on
Banknotes

2.
WELCOME
Dear Readers,
Welcome to the 35th edition of The Authentication Times.
This issue of THE AUTHENTICATION TIMES is dedicated to importance of design
in authentication industry.
Designing a consumer product, with a specific set of functions (authentication) to
perform is very challenging, especially when it comes to banknotes, product
authentication and brand protection, the consumer experience is everything.
In an era of consumer empowerment, the importance of design have increase
manifold. The brand protection community (brand owners, packaging convertors,
security feature developers and security printers, distributors and supply chain
security professionals) must step out of their comfort zones and interface with
the user, consult the user, open a dialogue with the user and listen.
While designing any banknote, selection of security features also play an
important role. The issue also addressed the usage of Holograms, optically
variable devices (OVDs), diffractive optically variable devices (DOVDs), diffractive
foil features (DFF) or diffractive optically variable image devices (DOVIDs) as
important security features on banknotes.
We hope you will found this issue informative and interesting and as always, we
look forward to receiving your feedback.
© 2018 ASPA – www.aspaglobal.com All rights reserved. ASPA, The Authentication Times logo, the ASPA logo, and product
and/or service names are trademarks and service marks of ASPA and are registered. The Authentication Times is the official
magazine published by Authentication Solution Providers' Association (ASPA). The publication offers in-depth analysis, news,
research, article and expert opinion on latest developments on Anti-Counterfeiting, Brand Protection, Serialization and
Traceability in and out of India. The views expressed by contributors and correspondents are their own. Reproduction of the
content of the AUTHENTICATION TIMES in whole or in part is allowed, provided the source is acknowledge. Editorial opinions
expressed in this magazine are not necessarily those of ASPA or the publisher. Neither the publisher nor ASPA accepts
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INDEX
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Issue 35
Chander S Jeena
Editor, The Authentication Times
Event Calendar
Label Expo India
November 22-25, 2018
Greater Noida (Delhi NCR), India
Pharmaceutical Traceability Forum
November 28-30, 2018
Philadelphia, USA
High Security Printing Asia
December 03-05, 2018
Hanoi, Vietnam
20th Anti-Counterfeiting & Brand
Protection Summit
January 28-30, 2019
San Francisco (CA), USA
In this issue
The Importance of Design in
the Authentication Process -
Understanding the User
Experience
Interview with Julian Payne
Predicting future banknote
designs
The Evolution of DOVIDs on
Banknotes
Decoding three factors
behind the growth of anti-
counterfeit market in India
Trends and Drivers in Tax
Stamp Design and Security
Patent Applications
Published in Indian Patent
Office Journal
News Bytes
1
3
7
11
19
21
26
27
About Cover page: The cover page image is De La Rue's latest polymer housenote integrates design with security
technology harmoniously.

3.
1
n order to better understand the
Iauthentication user - experience we
must leave our traditional 'comfort-
zones' and reach out to professionals in
a field that we are only beginning to
exploit in a positive fashion for the users
and consumers of our products.
We must go to a place where designers
rarely go. A place where we can learn
about what the public really see if and
when they really look at your security
labels, tags etc.. Not only can we learn
about what they see, but more
importantly, about how certain elements
and designs characteristics triggers
specific responses and reactions.
But by travelling to this place we may be
in store for some surprises. We must
travel there with an open mind and leave
aside our pre-conceived understanding
of how the consumer user really
engages with a product and its
packaging/labelling during the decision-
making process to purchase.
Many things we believed may be proven
to be false and if this is supported by fact
and science, we must be humble and
professional enough to look at how we
design packaging and labelling for public
authentication differently. After all, we
are designing a consumer product, with
a specific set of functions
(authentication) to perform. Surely it
makes sense to validate first of all, what
these functions are and how best to
engage the user in a positive and
rewarding experience that inspires
confidence, trust and certainty.
This is clearly a highly specialised field
and in order to navigate the road to a
better understanding of this vital subject,
the IBDA is extremely fortunate to have
partnered with the industry's leading
expert in this domain, Professor Jane
Raymond.
The Importance of Design in the
Authentication Process -
Understanding the User Experience
It’s all about changing the way ‘WE’ see things!
Issue 35
Author: Mark Stevenson,
President, International
Banknote Designers
Association (IBDA)
COVER STORY

4.
COVER STORY
Professor Raymond holds the Chair of
Visual Cognition at the School of
Psychology, University of Birmingham,
UK and is CEO of Secure Perception
Research, Ltd. She has been actively
engaged in basic and applied research in
Experimental Psychology and Cognitive
Neuroscience for nearly 30 years and
has specific expertise in human
perception, selective attention and
emotional response.
The Importance of Perception testing is
widely recognised in many consumer
industries. The type of packaging,
printing, colours, typeset etc. used can
have a fundamental impact on how
consumers perceive a product,
regardless of what the product actually
does or contains. Product and packaging
designers invest heavily in consumer
perception testing to ensure they are
sending the correct messages via their
design work. I recently discovered that
even garbage bag designers have a
significant budget to engineer their
product to deliver a better user
experience….Wow!
When it comes to product authentication
and brand protection, the consumer
experience is everything.
In the world of brand protection and
product authentication it is so easy to
become comfortable and believe that we
are doing the right thing by following
technology and bench marking
ourselves against other brand owners or
…But this is not the right barometer…the
sole valid barometer of any significance
is the user-experience during the
authentication process. The true litmus
test to see if we got it right or wrong is
not necessarily counterfeit levels,
printing costs or waste levels, budget or
time lines, but whether the user actually
engages its perceptual senses to look at,
or feel, the table, packaging or other
security device.
When designing for product
authentication, technology, when
practically applied to meet user needs is
a good thing but technology, applied for
the sake of technology is a waste of
resources, space and time
The brand protection and authentication
industry need to stop and ask
themselves honestly… are we doing all
this for us or for the user…And if we
reach a conclusion that we should be
doing it for the user, well then we need
to understand the user…We must accept
that we are not the user…we are simply
too close to the product and have lost
our objectivity….We need a wake-up call
and we need to take a step back and ask
others what they need, expect want and
don't want when it comes to inspiring
confidence, trust and certainty in a
product.
And it's not rocket science…A user
centered approach to brand protection
design is logical and makes common
sense…And if you want a simple
definition of design usability I quote
Steve Krug who says that; 'Usability is
about People and how they understand
and use things. It is not about
technology.’
The brand protection community (brand
owners, packaging convertors, security
feature developers and security printers,
distributors and supply chain security
professionals) must step out of their
comfort zones and interface with the
user, consult the user, open a dialogue
with the user and listen. We must
become user centered organisations
and think differently about every step of
our legacy processes…just because it is
manufacturable, contains the latest
technologies and we think it looks good,
does not actually make it good.
The only judge here is the user and we
must lay aside our preconceived notions
of what is good and bad. We must lay
aside our subjective opinions for we
cannot be fair arbitrators…we are too
close to the product, too involved and
have too many agendas….
So long as the brand protection and
authentication community base the
user-engagement/experience on
scientific facts and research, they are
destined to become better and develop
better products. Embracing this
philosophy will bring the industry into a
new era. Rejecting it will open the door
to complacency, myopia and alienation.
“We spend a lot time designing the bridge, but not enough time thinking about the
people who are crossing it.”
–Dr. Prabhjot Singh, Director of Systems Design at the Earth Institute
To quote Steve Jobs,
‘You've got to start with the user
experience and work back toward the
technology – not the other way
around.'
To find out more about the IBDA,
please visit our website :
www.ibd-association.com or
contact info@ibd-association.com
Issue 35
2

5.
Interview with Julian Payne
Creative Director, De La Rue
Q1: Why design is an
important element of
Authentication?
A: The design of a new
currency, passport or
security document is
so much more
than the physical
object itself. It is
significant and
symbolic, evocative and iconic — a
cultural statement that respects a proud
heritage while looking to the future. It is
identity, integrity, a promise. Each
design of an individual security
document such as a banknote is unique,
and banknote design allows for a
countries identity and culture to be
portrayed by using distinctive icons,
symbols and motifs that its citizens can
relate to automatically.At De La Rue we
begin every design thinking of the end
users, how they use and authenticate
the notes, identity documents or
products, and how we can balance
combating security threats with visual
aesthetics.
Q2: What are the latest trends and
developments in designing in terms of
color, cultural icons, sizes, patterns,
number of anti-counterfeiting
features, machine readable features
etc.?
A: The styles we see in banknote design
today range on a continuum ranging
between what we describe as 'Linear'
which is a more traditional design
aesthetic reaching back over 100 years,
to 'Leap' which is a lot more cutting
edge and is a conscious leap made my
central banks to move their currency
design into a whole new concept.
Linear styles of banknotes, such as the
Bank of England notes, have
incremental linear change over the
years where the layout is maintained
and only the technology is updated. Next
along is tangent styling where the
essence of the note is maintained but
with a modern design aesthetic and
integrating new technologies. This is
very much the 'de-facto' style choice and
has increased in popularity over the late
1990's early 2000's. An example of this
is the Clydesdale Bank new polymer
series. Over the last five years there has
been heightened adoption of the use of
bold colours and design competitions
that allow local artists to feed into the
style of their countries new banknotes.
There is a growing trend for embracing
new technology and moving to a totally
new design concept. An example of this
is the Maldives Monetary Authority who
worked in partnership with De La Rue to
radically redefine their banknote style
and technology with a theme that
reflects the traditions and aspirations of
the modern Maldives, as depicted by a
local artist who created all of the design
concepts for the new series. With more
banknote issuing authorities
transitioning to polymer banknotes, this
also enables increased design flexibility
in the use of bolder colours and new
innovative security features.
Q3: What are important elements a
designer should keep in mind while
designing solutions for product
authentication.?
A: It is integral that you design with the
existing brand identity and iconography
in mind, so that it seamlessly integrates
and enhances the product.
You also need to make sure you always
design for the end user. In the case of
banknotes, this is your first line of
defence such as the public and retailers,
moving through to commercial banks,
the central bank and the government.
Different end users drive different use
cases, impacting the design of the
banknote.
Design enables users to recognise the
value of the note either through visual
cues such as numerical's, denomination
sizing and colour separation, and also
now through touch by the use of tactility
on denominations. Design helps to
check authenticity through the use bold
and easy to find public features,
consistent placement of
denominationally distinct features, and
distinct, integrated UV and teller
features.
Q4: What should Authorities look
while designing a banknote Aesthetic
or Security? For example, what
should be ideal combination of
security features in design?
A: Banknotes are arguably some of the
world's most well recognised — and
iconic — products. An understanding of
how these products are used by people
— or by machines — and the specific
security threats they need to counter
throughout their lifetime, directly
informs their final design. Our design
team works closely with central banks,
governments and brands, their
stakeholders and end users to deliver a
robust, fully secure, functional and
aesthetically strong design solution.
Feature selection should be driven by
the use cases the bank note is likely to
face, that is how people use, hold, store
or try to counterfeit currency. This is why
engagement early in the process is
critical. Market and agrarian economies
will have use cases that favour hard
wearing, bold features to highly
automated ones that will demand a
balance of public and machine readable
features. Equally there are
idiosyncrasies in how people treat their
money, from wallets to underwear to
burial. Understanding the cash cycle and
how the notes are performing; their life-
cycle, distribution across the country,
volume by denomination all help the
designer consider the feature choices.
Products such as De La Rue Analytics
can help provide these critical design
insights.
An authority should also consider what
the note features are there to do, which
in short are: a clear signal of note value,
authenticity and through it's aesthetic an
identity.
Q5: How can design incorporate way
for digital solutions, do you see any
such opportunity?
A: Design can be used as part of the
user journey and enhancing the overall
customer. Within currency, mobiles are
increasingly used for public education,
often using AR (augmented reality) to
bring features to life and explaining what
Issue 35 INTERVIEW
3

6.
they do. They are not authenticating a
banknote, but are engaging the public
and help them to understand what to
look out for.
Secondly there is a lot more focus now
on integrating the physical and the
digital seamlessly, for example in
authentication where you have digital
track and trace solutions that integrate
with the physical tokens. This is critical
for understanding product provenance
and allows officials and even consumers
to use mobile apps to scan the secure
labels and authenticate the products.
Q6: What will be future of banknote
design?
A.:Heritage and innovation are what
make an exciting future for cash. Strong
design can create a future that excites
and engages the user. Currency has a
deep emotional meaning borne of its
unique legacy and its continued global
relevance. This heritage combined with
innovation can create engaging, durable
and secure banknotes of the future.
Issue 35 INTERVIEW
The Authentication Times is the official magazine published by Authentication Solution Providers’ Association (ASPA). The
publication offers in-depth analysis, news, research, article and expert opinion on latest developments on Anti-
Counterfeiting, Brand Protection, Serialization and Traceability in and out of India. The magazine has a circulation of over
5000 (including digital version) brand owners, industry experts and policy leaders.
Diverse technologies, common goal.
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7.
EXPERT ANALYSIS
Predicting future banknote designs
By a use-centered approach
Dr. Hans de Heij
De Nederlandsche Bank NV
Amsterdam
anagers know: Make the right
Mdecision and make the
decision right. In designer’s
language: find the right problem and find
the right solution. So, what is the right
problem in case of the design of future
banknotes? And subsequently, where
should central banks find the right
solution?
Authentication has been an important
driver for new banknote designs.
Understandable, as there have been
three major threats in the history of
banknotes, respectively the introduction
of photography (around 1850), the rise of
offset printing (around 1920) and the
Digital Revolution (around 1980). Threats
all caused by innovations within graphic
reproduction techniques. However,
nowadays central banks don’t face such
a technical threat, but a usage threat.
Still, banknote design is characterised by
a technology-driven approach instead of
a use-centered one, which puts the user
in front.
Three models are introduced to
underpin the trend towards use-
centered banknote designs:
Double Diamond Model
Pyramid-Model
Upid-Model
Double Diamond Model
Finding the right problem and find the
right solution represent the two
diamonds of the Double Diamond Model,
shown in Figure 1. Both activities first
diverge and subsequently converge.
Furthermore, both activities have an
analytical and a synthesis phase. The
central bank is responsible for finding
the right design problem, while the
banknote designer is responsible for
finding the right solution. To support this
process the central bank may appoint a
knowledgeable banknote designer
manager, who start in the first diamond
by questioning the problem of a new
banknote design and will expand the
scope of the problem by focussing on the
different usage situations of banknotes.
Then the model converges towards a
single problem statement, laid down in a
Programme of Requirements. The
banknote designer operates in the
second diamond of the solution activity,
also characterised by a phase of
diverging before converging and
delivering a proposal for a banknote
design.
In 2007, Buxton summarised this
process by ‘Getting the design right and
the right design’.
Payment methods and banknotes
When people make a payment, they use
a product like a banknote or a bank card,
known as a payment instrument. When
you would ask them, what is the function
of the banknote or card, people tend to
answer with: a means of payment. A
wider understanding of a means of
payment is a payment method, and
Figure 2 provides an overview. With a
payment instrument a user has access
to a payment channel; a bank card
provides access to a bank account and
an ATM is part of the payment channel
‘banknotes’. On its turn, a payment
channel is part of a payment system,
such as non-cash and cash. Non-cash is
wider than digital payments, as it
includes also coupons, tokens and - still
- cheques. In the past there was only
cash, but nowadays people have a choice
when they want to make a payment. To
make this choice they have user criteria,
based on user needs. What are these
user needs?
Pyramid-Model
To answer this question, a lead is
provided by the well-known theory of
Maslow (1943) on the hierarchy of
human needs. Originally Maslow
discriminated six levels, which are often
reduced to the following three: 1) basic
needs, 2) psychological needs and 3)
self-actualisation needs. Filling
Maslow’s pyramid with the user needs of
any payment method, results in the
Pyramid-Model as shown in Figure 3.
The depicted user needs are based on
studies of user behaviour concerning
payment methods. The first studies
reported on descriptive profiles of credit
card users (e.g. Etzel, 1968). One of the
first to publish a list of attributes,
characteristics that determine the user’s
preference for a consumer payment
system, is Hirschman (1982). A Dutch
study on payment behavior by Van der
Horst and Cruijsen (2016) delivers a
ranking of seven attributes: fast (1), safe
(2), easy (3), cheap (4), control of
expenses (5), provides privacy (6) and
well-accepted (7). A study done to
consumer preferences within the Euro
Area has been reported by Esselink and
Hérnandez (2017), discriminating user
preferences between cash and
bankcards. What is striking about these
studies is that there is no common
Issue 35
7

8.
terminology yet. Concepts like security,
safe, safety, resilience and reliability are
close to each other, yet different. Several
studies report on the greatest
determinant of a payment system, like
convenience for the Danes (Jacobsen
and Nielsen, 2011) and ease of use to the
Canadians (Arango et al., 2012).
At the bottom of the Pyramid-Model the
basic user needs are depicted. In the
center there is the user need that the
payment instrument should be easy to
use. Other user needs refer to attributes
of the payment method, like access,
safety and settlement time. In the center
of the middle section of the Pyramid-
Model there is the user need that the
payment instrument should be nice to
have, surrounded by user needs
referring to the payment system, like
privacy, risk of loss and overview of
expenses. In the top of the pyramid is
‘piece of mind’, people want to be happy
with their means of payment; above all,
it should be hassle free.
Upid-Model
So, user needs of a payment instrument
are divided in ‘easy to use’ and ‘nice to
have’, respectively a basic and a
psychological user need. Easy to use
and nice to have are container concepts
and can be divided into more specific
user needs with the help of the
introduction of user functions. The Upid-
Model divides ‘easy to use’ and ‘nice to
have’ in respectively four User Interface
Functions (UIFs) and six User
Experience Functions (UXFs). The terms
User Interface Functions and User
Experience Functions are derived from
the developments within the information
technology, especially by the domain of
interaction design of screens.
User Interface Functions (UIFs)
The main user function of a banknote is
recognising value (UIF 1). Searching for a
banknote in their wallet, people are first
of all interested in their value. Also,
when they receive a banknote as
change, people’s first interest is if the
correct denominations are offered.
Subsequently, people will take the
banknote, arriving at the second function
in this category, named handling (UIF 2).
People use banknotes to pay each other
and not for authenticity self-checks,
something central banks sometimes
seem to forget. Therefore user functions
like value recognition (UIF 1) and
handling (UIF 2) are more relevant to the
user than checking authenticity (UIF 3).
Still, people should be able to do an
authenticity self-check, in case they do
not trust a banknote at offer. People do
want to know what the themes, images
and features displayed on a banknote
represent (UIF 4). User Interface
Functions are the basic user functions of
a banknote and have to be fulfilled; if
not, the usability score of the note will be
low. For the euro banknotes, in 2013, the
unweighted score came out on 6.4 on a
scale from 1 to 10, obviously room to
improve.
User Experience Functions (UXFs)
The first UXF is recognising identity;
people are interested in their own
banknotes, not that much in others.
Second, within a fraction of time, people
have their judgement ready on the
aesthetics. They either find the banknote
beautiful or ugly. For this reason judging
aesthetics is listed as UXF 2. Whether a
new design looks like a valuable
banknote or a cheap coupon is a matter
of keeping confidence, function UXF 3.
Furthermore, the main image of the new
design is noticed instantly, is it a portrait,
a bird or a tower? Reacting on the main
image is therefore one more user
experience function (UXF 4). Two
upcoming User Experience Functions
are positioned at the bottom rows.
Issue 35
Double Diamond Model
Finding the right problem Finding the right solution
Divergence Convergence Divergence Convergence
TIME
ALTERNATIVES
Programme of
Requirements
BANKNOTE BANKNOTE
DESIGN MANAGER DESIGNER
Figure 1.
The Double Diamond Model for banknote design. Originally published in 2005 by the British Design Council as
The Double Diamond Design Process Model.
Payment systems Payment channels Payment instruments
Non-cash Bank account Online banking
Debit cards
Credit cards
Paper forms
Not-linked to a bank account Pre-paid cards
Online purses
Virtual currencies
Cash Coins Coin denominations
Banknotes Banknote denominations
Payment methods
Figure 2.
Overview of payment methods, divided in payment systems, payment channels and payment instruments.
EXPERT ANALYSIS
8

9.
People expect their banknotes to be
‘green’ (UXF 5) and expect that they can
check a banknote by using a
smartphone or by any other linkage to
information technology (UXF 6). When a
banknote designer does not pay
attention to any of the User Experience
Functions people may still be able to use
a banknote for a payment. However,
when the psychological user needs are
also fulfilled, the design will receive a
high experience score.
Analysing present banknote designs
The daily use of banknotes is typically
driven by withdrawals from ATMs, wallet
use and payments to a retailer or
banknote acceptor. Analyses of the User
Interface Functions starts with value
recognition (UIF 1) and handling (UIF 2).
Both can be improved by reducing the
number of denominations. Instead of six
or seven denominations, central banks
may issue three, enough for daily
payments, as known from Japan and the
United Kingdom. The note-coin
boundary will be the lowest ATM note.
When the central bank opts for
extending the payment denominations
with a saving denomination, a high
denomination, the number of
denominations could be brought to four.
To prevent misuse by criminals, such a
saving denomination can only be handed
in at a controlled environment like a
bank. Therefore these notes receive a
larger format to prevent its use in
machines dedicated to daily payments.
Value recognition is further improved by
introducing main images (UXF 4) from
different image categories. A series
should not depict only portraits, or only
buildings or birds. Such images may be
switched without being noticed and don’t
contribute to instant value recognition.
Instead, the individual notes of a series
should depict a main image from
different image categories, as is the case
in the recent Norwegian series ‘The Sea’
(first issue in 2017). Handling can be
further improved by adaption of size and
orientation. Today, people may store
some banknotes in the etuis for their
smartphones or in card cases. Usually
they don’t keep any coins there. These
new handling habits will have
consequences for the design of future
banknotes. Banknote sizes, folded or
unfolded, could be adapted to the ‘credit
card format’ of 86 mm x 54 mm. A
banknote is more-and-more used as a
fall back, for example in case a digital
payment instrument does not work. In
case of wallet use, banknotes are stored
horizontally, which is the same
orientation of the notes withdrawn from
an ATM. As the public does not pay
attention to the reverse of a banknote,
this horizontal front is the public side,
implying that the reverse is the retail
side. Retailers keep banknotes often in a
vertical position in their cash drawers. A
vertical orientation is also required when
a banknote is inserted in a payment
terminal accepting banknotes, a user
situation which will occur more often in
the future.
Nowadays, almost all currencies have a
single note height. Exceptions, among
some others, are the euro and the
British pound. A single note height of 72
mm, the height of the euro 20, is to the
Dutch the most practical one. To assist
the blind, the payback denominations
should receive an increasing length
increment of respectively 7 mm and 8
mm.
A shift is expected in future banknote
designs from checking authenticity (UIF
3) to retaining confidence (UXF 3), from a
focus on public authenticity features to
confidence features. Public features
were introduced in the 1980s, to involve
the public as ‘a first line of defence’
against the spread of counterfeited
banknotes. However, the world has
changed and to date people do not see
any need to execute an authenticity self-
check. And they are right. Banknotes
withdrawn from an ATM are genuine and
do not have to be verified. Furthermore,
retailers check incoming banknotes with
devices, something that the public sees.
And, the probability that the public will
receive a low counterfeited
denomination is practically zero. So, why
should the public do an authenticity
check?
Issue 35
Figure 3.
Pyramid of user needs of any payment method (De Heij, 2018). User needs for any means of payment can be divided in three classes, similar to the
ones of Maslow pyramid. The red and the blue represent respectively the basic user needs and the psychological user needs.
Pyramid-Model
Fixed
costs
Access Acceptance
Image
Complexity
Privacy
Peace
of mind
Reward
programme
Happy
Risk
of loss
Variable
costs
Settlement
time
Reliability
Safety
Payment instrument
is nice to have
Userneeds
BasicPsychologicalSelf-actualisation
Payment instrument
is easy to use
Upid-Model
User Interface Functions User Experience Functions
Recognising value
Handling
Checking authenticity
Receiving the message
Recognising identity
Judging aesthetics
Retaining confidence
Connecting with main image
Expecting sustainability
Linking to information technology
Easy to use
Basic user functions
Nice to have
Psychological user functions
Figure 4.
The Upid-Model (De Heij, 2017) divides the user functions of a payment instrument in User Interface
Functions and User Experience Functions.
EXPERT ANALYSIS
9

10.
Such a check is only required on special
occasions, like in case of case of special
festivities or a purchase from a private
person on the internet. In such cases
people may use an app on their smart
phone to check a banknote. The
conclusion is that people don’t want to
be bothered any longer by authenticity
self-checks. Studies in Canada and the
Netherlands show that people have a
high, stable and increasing trust in
banknotes. This implies introduction of
public confidence features instead of
public security features. Furthermore,
public authenticity features should be
intuitive and self-explaining. For security
features, the focus of central banks
should shift to features for the retailer;
switch the present level 1 and 2 in retail
features (level 1) and public features
(level 2).
Within the User Experience Functions
the focus of central banks is usually on
the main image (UXF 4), on what is on
the banknote? First, as said above, value
recognition will be improved when the
main images within a series of
banknotes will be based on different
image categories. Second, the search for
a main image should be triggered by an
identity description (UXF 1). Instead of
backward symbolism, such as historical
persons or building, the trend will be to
select images based on forward
symbolism. Two examples here. The
Swedish central bank replaced the
portraits of historical persons by images
of people which have a greater appeal to
the Swedes, like movie star Greta Garbo.
The Bank of Canada reported that
Canadians expect their new banknotes
to serve ‘today and the years to come’.
An important user function in the near
future will be green banknotes, as
people will expect more than today that
their payment instruments are
sustainable (UXF 5). Studies on Life
Cycle Analysis show that synthetic
banknotes are more sustainable than
cotton. Finally, future banknotes will
have to interact much more with
Information Technology, especially with
smart phones. An example here is a QR-
code, which would link a banknote
directly to the website of the central
bank, as was done first on a Nigerian
banknote of 100 naira, issued in 2014.
Also, the banknote number may receive
a new role, as banknotes may be verified
online, by real time number equation.
However, the banknote user’s privacy
will be respected, the user will remain
anonymous. To improve the machine
readability, the banknote number can be
replaced by a barcode type.
From user functions to design
requirements
The next step for the central bank’s
design manager is to transform the
trends observed above into design
requirements. In three stages design
requirements are derived from user
functions by abiding questions about
‘what’ and ‘how’, illustrated in Figure 5.
The first step is the transition from user
functions into functional requirements,
which are, in turn, transformed into user
requirements and subsequently into
design requirements. Figure 5 provides
an example for the user function of
‘retaining confidence’, UXF 3 (what 1). A
holographic stripe is the most eye-
catching public feature of new
banknotes, such as Canada, United
Kingdom and the Euro Area; studies on
the euro showed that such a stripe
contributes more than other features to
confidence. The next step is the
formulation of the functional
requirement, for example ‘confidence
strip’ (how 1), which is in this example a
wide glossy stripe (what 2). Collected
user preferences on such stripes are
input for the design requirements (how
2), for example that the stripe should
match with the banknote’s value.
Figure 6 shows a use-centered banknote
design concept, including a confidence
stripe.
Concluding
Banknote design management should
invest in user needs. When cash is no
longer an attractive payment instrument,
banknotes will disappear. User needs
will lead to other design requirements
as applied today. Furthermore, banknote
designers should focus first of all on the
User Interface Functions, instead of
spending their creativity to User
Experience Functions like connecting to
a main image.
Issue 35
From user functions to design
Role of the central bank
User functions
Role of the designer
Functional
requirements
User
requirements
Design
requirements
Design
What? How? What? How?
Retaining confidence
UXF 3
Confidence stripe Silver, glossy stripe
On the right side
Match with value
Complex patterns*
20 mm wide
15 mm from edge
Numeral
Moving line patterns
and colours
*The user expects that complex patterns are there for the counterfeiter and do not have to be checked by the user.
Figure 5.
Schematic representation of the derivation of user functions to design requirements, including an example of the user function ‘retaining confidence’ (UXF 3)'. To arrive at
design requirements, functional requirements should be identified first, followed by user requirements.
Example of use-centered banknote design
Confidence
strip
Retail side
Figure 6.
An example of use-centered design of
banknotes (De Heij, 2017). These innovative
concepts are prepared for an imaginary
currency: MAX (Money of Area X). Although they
look different, the notes are immediately
recognizable as banknotes. These designs
include a confidence strip as a result of the shift
of UIF 3 to UXF 3.
References
1. Maslow, A.H. (1943). A Theory of Human Motivation. Psychological Review 50(4), 370-396. 2. Etzel, M.J. (1968). How Much Does Credit Card Cost the Small Merchant? Journal of Retailing, 47(Summer), 35-39.
3. Hirschman, E. (1982). Consumer payment systems: The relationship of attribute structure to preference and usage. Journal of Business 55(4), 531-545. 4. Buxton, B. (2007). Sketching user experiences.
Getting the design right and the right design. Morgan Kaufmann. San Francisco. 5. Jacobsen, J.G.K. and Nielsen, S.T. (2011). Payment habits in Denmark. Danmarks Nationalbank. Monetary Review Quarter 3
Part 1, 125-136. 6. Arango, C., Hogg, D. and Lee, A. (2012). Why is Cash (Still) So Entrenched? Insights from the Bank of Canada’s 2009 Methods-of-Payment Survey. Bank of Canada. Ottowa. 7. Van der Cruijsen,
C. and Van der Horst, F. (2016). Payment behaviour: the role of socio-psychological factors. DNB Working Paper, 532. 8. Esselink, H. and Hernández, L. (2017). The use of cash by households in the euro area.
Occasional Paper Series, 201. European Central Bank. Frankfurt. 9. De Heij, H. (2017). A Model for Use-centered Design of Payment Instruments Applied on Banknotes. Thesis. Tilburg University. 10. De Heij, H.
and reviewed by Brongers, D. (2018). The Upid-Model. A Model for use-centered design of payment instruments applied to banknotes. Keesing Journal of Documents & Identity, 56, 3-7. 11. De Heij, H. (2018).
User-friendly banknotes. Infographic. News and trends in payment systems. Newsletter. March 2018. De Nederlandsche Bank. Amsterdam. 12. De Heij, H.A.M. (2018). As people do not check, counterfeiters
settle for 50 %. (Conference on) Optical Document Security. San Francisco. 13. Currency News (2018). Three Public Perception Studies Produce Surprising Results. Currency News, 16(3),
10-12.
EXPERT ANALYSIS
10

11.
The Evolution of DOVIDs on
Banknotes
TECHNOLOGY
OVERVIEW
Holograms, optically variable devices (OVDs), diffractive optically variable devices (DOVDs), diffractive foil features
(DFF) or diffractive optically variable image devices (DOVIDs) are the variety of terms used to describe the security
features that have become one of the most common, and successful, level 1 (overt) features on banknotes today.
To most lay people they are collectively called holograms.
This article tracks some of the important milestones in the evolution of DOVIDs on banknotes to the present day.
Where did it all begin?
I
n the beginning there was paper and
ink. Thus, began the modern history
of the banknote and with it, banknote
counterfeiting, leading to the
introduction of a watermark in 1697 and,
in 1945 an embedded security thread.
The next major anti-counterfeiting
feature was the introduction in 1984 of a
window thread.
At Interpol’s 6th International
Conference on Currency Counterfeiting
(Madrid, 1977), came the first reports of
Japanese colour copiers being used to
counterfeit currency notes.
A year later, Swiss banknote printer
Orell Füssli and Landis & Gyr presented
a diffractive optical element on a coated
paper substrate. This involved the use of
a die incorporating a diffractive relief
pattern and the use of a letterpress
numbering machine (the Numerota from
what was then De La Rue Giori and is
now KBA-NotaSys). This approach was
abandoned three years later in favour of
the use of a transfer foil feature added to
a paper substrate.
At the 7th Interpol conference (Lyon,
1987), SICPA announced that Thailand
had taken the first steps to evaluate the
use of its Optically Variable Ink (OVI™) on
a banknote (the 60 baht). The first major
adoption came when, in 1996, the USA
decided to use OVI on the $100 bill.
1988 – the Breakthrough
However, the challenge remained to
create additional products to resist
colour copying, and in 1988 the banknote
world made a breakthrough. In that year,
and at opposite ends of the world, two
banknotes were issued that would signal
a permanent change to banknote
security.
In Austria, the high-value 5,000 schilling
note appeared with an embossed foil
patch of Mozart, produced by Landis &
Gyr (now OVD Kinegram), and applied by
a Gietz hot stamping machine.
In an even bigger departure from
convention, and also applied using a
Gietz machine, Australia issued a
commemorative A$10 note made of
biaxially orientated polypropylene
(BOPP). This was the world's first
polymer banknote and displayed a
computer-generated diffractive foil
image of Captain Cook in a transparent
window.
This feature was called Catpix™, a
diffraction pattern created by blazing
with an electron beam, developed by
Australia's Commonwealth Scientific
and Industrial Research Organisation
(CSIRO) Division of Chemical Physics.
The Catpix technology was developed to
overcome degradation of the diffractive
image resulting from flexing or
crumpling of the banknote during its
lifetime.
Although the Austrian schilling was
subsequently replaced by the euro, and
Australia suffered numerous technical
problems (17.5 million A$10 notes were
manufactured but the ones that went
into circulation did not age well), the
stage was set for a revolution in
banknote security; banknotes with
DOVIDs would proliferate as it became
clear that the features could not be
photocopied, scanned or printed, no
matter how refined the equipment.
This is because a defining property of
The Austrian 5,000 schilling – one of the two first DOVIDS on
banknotes in 1988
The 5,000 schilling tilted to the left and the right to reveal
different profiles of Mozart.
Australia's commemorative A$10 – the world's first polymer
banknote, and one of the world's first two banknotes with a
DOVID.
Issue 35
11

12.
Catpix diffractive Captain Cook foil patch.
diffractive foil features is that the colour
and imagery is strongly angular
dependent – i.e. optically variable. This
means that, as the note/diffractive foil is
handled, rainbow colours flash in front
of the viewer. By comparison, a
photocopy (static flatbed copy) of the foil
appears lifeless, with no optically
variable rainbow effect.
The subsequent take-up of diffractive
foils on banknotes was slow – the
banknote community was cautious, the
gestation period for any new banknote
features was long and the technology for
sophisticated foil features, large-scale
production and application was in its
infancy. Nevertheless, over the next
three decades nearly 100 issuing
authorities were to adopt the technology
and apply it to just under 300
denominations.
Next Milestones
1992, saw the first holographic thread, in
the Finnish markkaa. At that time,
however, threads could only be inserted
into banknotes to a maximum width of 2
mm, which allowed little space for the
diffractive effects to be viewed. The
development of short-formers in the late
1990s enabled the integration of much
wider threads, and hence provided a
boost for the deployment of diffractive
and other optically variable threads to
widths of 6 mm and more.
A year later (1993) saw the foundation of
the International Hologram
Manufacturers Association (IHMA) –
which was set up to create a code of
conduct for the rapidly-developing
industry. The same year it launched the
Hologram Image Register, a first-of-its
kind initiative to maintain a record of
security holograms produced by its
members, and the so-called 'jewel' in its
crown.
A year later in 1994, came the first
®
holographic stripe, LEAD (Long-lasting
Economical Anti-copy Device), on the
Bulgarian leva, arguably a more
important development since the
majority of holograms are now applied
as stripes.1994 also saw Kuwait adopt
holograms on three of its
denominations.
Since then, and in particular towards the
end of the decade, there was a
tremendous upsurge in the use of
DOVIDs on banknotes.
This was prompted in part by the
increasing use of digital scanners and
photocopiers to counterfeit banknotes. It
was also promoted by developments in
foil production and application
technology, which enabled high volumes
of foil to be produced cost-effectively and
applied at speeds commensurate with
normal banknote printing production.
This was further supported by the
introduction of machines to facilitate the
application of foil to banknotes. KBA-
NotaSys introduced the OptiNota™H
sheet foil application machine for
printworks in 1997, while Kurz and
Giesecke+Devrient developed web
application machines. These enabled
paper mills to supply sheeted paper with
both threads and holograms, so that
printers without their own DOVID
application machine could produce
banknotes incorporating holograms.
Another key development was selective
demetallisation, a highly sophisticated
technique developed by Kurz in the mid-
1990s which provided a quantum leap in
hologram security(only a few companies
have the requisite technology). Improved
demetallisation techniques also,
critically, facilitated the integration of the
feature within the overall banknote
design, thus making diffractive foil
features more acceptable on aesthetic
grounds to a traditionally conservative
industry.
By 2000, DOVIDs – in the form of
patches, threads and stripes – were
being used on 49 circulating
denominations from 27 issuing
authorities.
Enter the Euro - 2002
Undoubtedly, the most significant driver
in the widespread adoption of DOVIDs on
banknotes was the first euro series,
launched in 2002 and widely recognised
as the successful culmination of a very
thoroughly researched banknote, from
concept to design, followed by a well-
planned and executed production and
distribution project.
The presence and quality of DOVIDs on
the euro proved that the technology had
truly arrived. Every denomination
included a DOVID, with stripes on the
three lower denominations (€5, €10 and
20) and patches on the four higher
denominations (€50, €100, €200 and
€500).
The choice of DOVIDS for the new series,
their sophistication and their successful
application to the banknotes at high
speeds was a tremendous vote of
confidence in the technology which
encouraged other central banks to
follow suit.
A 20 euro from the first euro series incorporating a demetallised
DOVID stripe, and the €100 with a demetallised patch.
Issue 35
12
TECHNOLOGY
OVERVIEW

13.
The BCEAO's 10,000 banknote incorporating STRAP
The European Central Bank (ECB)
communicated the salient visual
features through an extensive public
education campaign using the strapline
'Look, Feel, Tilt', contributing to their
success as a secure public feature, and
the increasing complexity of imagery to
provide high- security has continued
unabated.
2003 - New STRAP Features
Up until this point, DOVIDs were being
applied as patches or stripes, or
integrated as threads. In 2003, a fourth
type was introduced in the new note
series issued by the Banque Centrale
des États de l'Afrique de l'Ouest (BCEAO)
– the central bank for the West African
Monetary Union – namely a new
diffractive version of Banque de France's
®
STRAP technology.
STRAP (Système de Transfert
Réfléchissant Anti-Photocopie) is a
discontinuous wide surface-applied
reflective foil that was first applied to the
French franc in 1993 and originally
featured reflective metallised elements
that turned black in colour copiers. The
version used on the BCEAO banknotes
incorporated holographic elements that
changed their image and colour
according to the viewing angle.
Another milestone was reached in 2003,
when research showed that DOVIDs
were now being used on 105 circulating
denominations from 47 issuing
authorities.
Windows in Paper
The world's first paper banknote with an
OVD aperture was introduced by
Bulgaria, which issued a
commemorative 20 leva banknote in
2004 with an innovative optically
®
complex feature called Varifeye ,
developed by Louisenthal.
The significance of this development was
threefold.
 First, it marked the advent of windows
in paper banknotes, something that
had previously been confined to
polymer (more of which later).
 Second, it was an early example of
stripes combining different
technologies – diffractive and others –
which has subsequently become the
norm for stripes on banknotes.
 And third, the stripe was applied not
as a continuous feature, but in
register – again, something that has
become the norm for stripes on
banknotes.
Although diffractive foil features are
viewed by reflection, they are actually
transmission images rendered suitable
for viewing on an opaque background
(paper or printed polymer) by means of a
reflective metallic coating, usually
aluminium. Without the metallic layer,
the surface relief image is transparent
and capable of showing its rainbow
coloured imagery if held up to the light
which is allowed to pass through it. It
was only a matter of time, therefore,
before their use in combination with
windows in paper notes would catch on.
In 2005 China, which is the world's
largest issuer of banknotes, modified its
1999 series with the inclusion of
holographic threads.
2006 - Zero Tolerance
Demetallisation
In 2006, Kurz (owners of OVD Kinegram
since 1999), marked the 21st anniversary
of the KINEGRAM with the introduction
®
of the KINEGRAM zero. zero , based on
a new demetallisation process. The
name captures the key zero tolerance
characteristic of the new process,
meaning that the demetallisation is
perfectly registered to the diffractive
KINEGRAM image – a zero tolerance –
compared to the typical tolerance of ±0.5
mm of alternative demetallisation
processes.
The first application for the KINEGRAM
zero. zero was in the Central Bank of
Turkey's new series introduced in 2008.
That same year, Kurz unveiled
®
KINEGRAM reColor , a feature designed
for transparent windows in banknotes
which displays different images
depending on the side of the note from
which it is observed. On the front the
viewer sees a usual metallised reflective,
diffractive image, while the reverse view
shows a patterned coloured foil also
displaying the diffractive features. The
feature uses selective demetallisation to
highlight different parts of the images.
This feature subsequently led to the
®
development of KINEGRAM Colors ,
which was used on the Bank of England
£5 and £10 polymer banknotes in 2016
and 2017 respectively.
2007 - Windows Application
In 2007, KBA-NotaSys introduced Opti-
®
Windows , a module for its Opti- Nota H
foil application system that enables
printers to cut a window in a banknote
Registered demetallised stripes on the entire banknote series
issued by Turkey in 2008.
Issue 35
The Bulgarian commemorative 20 leva banknote– the first
paper banknote with an OVD aperture, or window
13
TECHNOLOGY
OVERVIEW

14.
and then apply a demetallised
holographic stripe directly over this
window in one pass and in perfect
register at speeds of up to 10,000 sheets
per hour.
Depth, Volume and Magic
2009 saw numerous developments in
DOVID technology.
De La Rue, in a response to the
®
development of Motion , the micro-
optical non-diffractive system developed
in the US by Nanoventions and acquired
by Crane, launched its Depth Image™
hologram, which was adopted by the
Clydesdale Bank that year. The feature is
claimed to have visible depth, three-
dimensionality, strong colour switching
and contrast. The Clydesdale notes used
patch holograms with a holographic
depth of 8 mm.
Depth Image was also later adapted for
windowed threads and integrated into
the Kazakhstan 5,000 Tenge
denomination in 2011.
Also, in 2009 was the development of
volume holograms using photopolymer
materials by Kurz for its modular
banknote concept. The product was
®
called KINEGRAM Volume and it was
originally developed as a thin laminate
film prior to its subsequent development
as a hot stamping foil.
This was a significant technical
challenge, since to make the material
thin enough to be useable on a banknote
required a new approach to volume
holography, given that the reason this is
called a 'volume' hologram is that the
interference fringes are recorded within
the depth of the photosensitive material.
However it took another five years for the
first volume hologram to be used on a
banknote and a further two years for the
combined volume and demetallised
stripe to appear on a circulating
banknote.
In 2010, similar developments took place
in Japan, with Dai Nippon Printing (DNP)
introducing the first volume hologram
windowed thread, although this was
used on vouchers rather than
banknotes. DNP also unveiled
SECUREIMAGE™, a full colour volume
(Lippmann) hologram stripe for
banknotes.
Also in 2009, Louisenthal announced a
further development of its Varifeye
window product with the incorporation of
a micro-optic see-through feature called
Magic™, combined in a foil stripe with a
diffractive feature. This product featured
a year later in the Kazakhstan 1,000
tenge note commemorating
Kazakhstan’s presidency of the
Organisation for Security and
Cooperation in Europe.
Registered Stripes and Improved
Demetallisation
During this time technical advances in
foil application machines also saw the
introduction of registered diffractive foil
stripes. This capability enabled the
design within the foil stripes to be placed
in exactly the same position on all
banknotes in a denomination.
One of the first to adopt this was Turkey
where their entire series incorporated
registered demetallised stripes. This, as
above, was the first commercial use of
KINEGRAM zero.zero.
2010 - Diffractive Identification
Devices
®
2010 saw the introduction of a DID
patch on the Philippines 1000 and 500
piso circulating banknotes. DID
(Diffractive Identification Device) was
produced by SURYS and is what is
known as a zero order device (ZOD). ZOD
devices have micro-structure relief
profiles less than the wavelength of
visible light and exhibit a clear colour
switch when rotated through 90°.
The Return of DOVIDs in Polymer
Also in 2010, CCL Secure launched a
diffractive feature called Latitude™, that
required no separate hot stamping
application of foil. Instead, the diffractive
DOVID feature is incorporated into the
polymer substrate during the
manufacturing process and a layer of
silver ink applied to provide the reflective
layer. The diffractive design is not
restricted to patch or stripe formats.
The first
circulating
banknote to
feature Latitude
was Nicaragua’s
200 córdobas
polymer note in
2015.
And it brought the incorporation of
DOVIDs into polymer full circle, the
feature having been dropped after its
first use on the commemorative A$10
back in 1988.
Clydesdale £10 pound banknote incorporating De La Rue's
Depth holographic patch.
KINEGRAM Volume combined with KINEGRAM zero.zero
within a single stripe from 2009.
Commemorative Kazakstan 1,000 tenge incorporating Varifeye
and Magic.
DID patch on the Philippines 500 piso banknote. Left image:
horizontal view of the banknote. Right image: banknote
rotated 90°.
Issue 35
Latitude feature on the
Nicaraguan 200 Córdobas
14
TECHNOLOGY
OVERVIEW

15.
Left: 5,000 ruble banknote incorporating Mobile thread. Right
close up of the Mobile thread that utilises refraction rather
than diffraction.
Europa series €20 banknote incorporating Kinegram Review
portrait window technology.
It was also the forerunner to a number
of new series that were issued over the
next five years on polymer, all
incorporating DOVIDs, starting with
Canada's new Frontier series in 2011.
All the notes feature an almost full-
length window with a demetallised
diffractive foil feature (it was intended
that the window should be full length,
but this proved to be too difficult for the
existing registration systems in
production).
Also worthy of mention in 2011 is both
the Russian and Belorussian upgrades
to their 5,000 and 200,000 ruble notes.
Both upgraded notes incorporated a
new thread feature called Mobile that
utilises Fresnel lenses and the
phenomenon of refraction (bending of
waves, in this case light waves) rather
than diffraction.
Mobile was developed by Computer
Holography Centre and Krypten for the
Russian printer and papermaker
Goznak. Conveniently, the production
processes for this feature exploit
existing holographic technologies and
equipment for mass reproduction.
By 2012, the number of circulation
denominations featuring DOVIDs had
grown to 247 from 83 issuing
authorities.
The New Europa Series
Around 2009, it became generally
known that the second euro series
(dubbed the Europa series) would retain
DOVIDs but in an enhanced, more
integrated form that was not possible for
the first series due to the large number
of suppliers and some printing works
having machinery limitations.
After several delays, the new series
begin rolling out with the new €5 in 2013,
featuring a diffractive stripe as before
but this time in register. The €10
followed, and then – in another
breakthrough for the industry – the new
€20 was issuedin 2015 containing what
the European Central Bank (ECB)
termed a 'portrait window'. This is a see-
through diff active feature that has
different visible effect when viewed from
the front, reverse and in transmission,
as does the more recent new €50. Both
®
notes use a KINEGRAM Review stripe
developed by Kurz.
World's First Plasmogram
Also in 2013, SURYS unveiled the
Plasmogram™ as an optically variable
device for use in the windows of secured
documents such as banknotes and ID
cards. What distinguishes this device is
that it uses surface plasmons to create
the image, making SURYS the first
company to launch a commercial
product which exploited this
phenomenon.
The underlying scientific principle of
Plasmograms is, oddly, that which gives
the colours in stained glass, as used for
at least 800 years. Stained glass
contains small metallic particles
incorporated into the glass before it
sets; the surface plasmon resonance
(the quantum-level phenomenon of light
waves travelling through metal at its
surface) at the interface between these
metal particles and the glass 'filters' the
transmitted light so that only one
wavelength is released.
In stained glass different colours are
obtained by using different metals,
different glass (thus changing the
refractive index at the interface of the
two) and different sized particles.
The same principle applies to plasmonic
optically variable devices. Nano-sized
metal particles are deposited onto a thin
film substrate comprising nano-holes,
so that the film becomes a light filter,
allowing only the required wavelength
through. By depositing different metals,
each allowing through a different colour,
images in light can be created.
First volume stripe on a circulating
banknote
The following year saw the world's first
volume holographic stripe issued on a
circulating banknote with the
introduction of the 50 shekel by the
Bank of Israel.
This note featured the KINEGRAM
Volume described earlier. This would be
the first of the four newly-designed
Israeli denominations to use the feature
that produces fundamentally different
visual effects than embossed
holograms. The 200 shekel was
SURYS' Plasmogram window feature on a demonstration
banknote
Issue 35
The C$20, 50 and 100 polymer banknotes incorporating a
diffractive foil demetallised stripe.
The Bank of Israel 50 shekel banknote introduced in 2014
incorporating the world's first volume holographic stripe
Kinegram Volume.
15
TECHNOLOGY
OVERVIEW

16.
The commemorative Armenian 500 dram incorporating
RollingStar LEAD stripe
introduced in 2015 and the 20 and 100
denominations in 2017.
In 2015, the Reserve Bank of New
Zealand began to upgrade its polymer
notes with a new series called the
'Brighter Money' series that – likethe
new Canadian Frontier series –
incorporated demetallised DOVID
window patches.
Enter 2016 with a Suite of Innovations
In 2016 SURYS introduced two new
features – DID Wave™ and DID Virtual™–
on the new commemorative 20 zloty
note, produced by Polish Security
Printing Works (PWPW).
DID Wave incorporates colour
permutation and animation motion effect
whilst DID Virtual incorporates colour
permutation and surface relief 3D
embossing effect SURYS developed
these features by incorporating the zero
order DID technology with fresnel-type
lenses.
In another first, the Swiss National Bank
(SNB) launched its new banknote series
(the ninth) with the issue of the new 50
Swiss franc note that incorporated a two
colour KINEGRAM Volume foil stripe
combined with a partially metallised
KINEGRAM provided by Kurz.
To date, CHF 10, 20, 50 and 200 notes
have now been issued. The remaining
notes in the series will also include this
feature.
In the same year, Kurz unveiled another
innovation – KINEGRAM Colors, which
was a development of its KINEGRAM
Recolor technology and was a departure
from conventional DOVIDS. These are
normally available in one colour (mostly
silver, sometimes gold). Kurz'
development allowed for the
incorporation of multiple colours in the
foil in perfect register to the partial
metallisation, and it received its debut
that same year when, in September
2016, the Bank of England issued its new
£5 polymer banknote with a KINEGRAM
Colors foil stripe.
The polymer £10 followed in 2017 which
also featured KINEGRAM Colors.
Virtually simultaneously in September
2016, on the other side of the world, the
Reserve Bank of Australia launched its
new polymer series, starting with the
A$5 banknote, followed a year later by
the new A$10, which feature a wide top-
to-bottom stripe containing a DOVID.
Not to be outdone, the Russian company
Krypten unveiled a suite of new thread
innovations in 2016 that included two
volume holographic threads: 3D-Gram-
M, available in green and red, and 3D-
Gram-C (C standing for colour), where
the colours have been increased from
two to three – green, red and blue.
More Innovation and Endorsements in
2017
Having enjoyed success with its
®
RollingStar micro-mirror technology
incorporated into banknote threads,
Louisenthal evolved its technology into
an eye-catching transfer foil called
®
RollingStar LEAD.
The transfer foil combines holographic,
micro-mirrors and colour shift
technologies into a single product and it
made its debut in the Armenian 500
dram commemorative note in 2017.
Louisenthal has long been an innovator
of secure windows in paper banknotes
and, even more recently, launchedan
®
enhanced feature called varifeye
ColourChange, which works in
combination with the properties of the
RollingStar LEAD transfer foil for
translucent and transparent windows
and also on its own as a patch.
In another world first in 2017, the
National Bank of Kyrgyzstan issued a
The image of the DID Wave and DID Virtual features that
portrays a part of a relief of the Gniezno Cathedral doors on the
commemorative 20 zloty banknote.
®
The CHF 50 banknote printed on Landquarts Durasafe
substrate and featuring the two colour Kinegram Volume stripe
incorporating partially metallised Kinegram.
The front of the Bank of England's new £5 note, incorporating
showing a KINEGRAM Colors stripe in the window area.
The front of the new $5 Australian banknote
An example of Krypten's 3D-Gram-C thread that can
incorporate three colours.
An example of varifeye ColourChange Patch in a window. Left:
Gold coloured in reflected light. Right: Blue colour in
transmitted light.
Issue 35
The NZ$5 banknote introduced in 2015 incorporating a
demetallised diffractive foil window patch.
16
TECHNOLOGY
OVERVIEW

17.
new 2,000 som commemorative paper
banknote featuring KINEGRAM Colors
from Kurz applied for the first time as a
patch. It comprised three distinct metal
colours – gold, green and blue – taking
the form of a traditional Kyrgyz yurt. In
this instance, the distinction is in the
variety of colours and not the
combination of the feature with a
window.
That same year, De La Rue introduced
TrueImage™, a DOVID feature for
polymer banknotes based on advanced
plane (classical) holography that was a
development of its Depth Image
technology. The result is 3D
photorealistic imagery with
cinematographic animation effects
which is ideal for polymer since the
smooth surface does not disrupt the
replay of the image sequence.
Resurgence of Patches
In another major endorsement of the
use of DOVIDs, in 2017 the Reserve Bank
of India sent out a Global Pre-
Qualification Bid Notice (PQBN) for the
supply of up to 8 billion foil patches per
year. As the largest banknote issuer
after China, this will increase the
volumes of DOVIDs produced for
banknotes each year exponentially.
At the end of 2017, the number of
banknotes with DOVIDs stood at 293.
The DOVID has come a long way since its
earliest application in the window of the
A$10 and as a patch on the Austrian 500
schilling. From a simple patch format
added, some would say, as an
'afterthought', the DOVID is now a fully-
integrated security feature, applied in
register with complex effects, more
often than not combined with
complementary optical features, and
producing a whole new range of effects
due to its combination in windows in
paper as well as polymer banknotes.
The preponderance of threads versus
patches versus stripes has changed over
the years, with the use of diffractive
threads declining markedly, and stripes
overtaking patches. A clear trend in
recent years, and one of the drivers for
the ascendancy of the stripe, has been
the combination of the window with
DOVIDs.
In the case of paper, this has – until now
–been confined to stripes. But in 2018,
®
Kurz launched KINEGRAM APL , which
enables printers to create windows with
DOVID features applied as patches.
Examples of Kinegram APL with
Kinegram zero.zero, Kinegram Colors,
Flux effect, Kinegram Volume, Kinegram
HDM and Kinegram Review on the The
Essential Element house note series.
With this latest development, patches
are likely to make a resurgence. But
whether as a stripe or a patch (or even,
in some cases, still a thread), the
opportunities for DOVIDs in banknotes
going forward are stronger than ever.
Europa series completes
More recently the European Central
Bank launched the new €100 and €200
banknotes incorporated portrait
windows and a new satellite hologram.
The new notes have the same integrated
design as the €5, €10, €20 and 50 with
the printed features and the watermark
being repeated in a foil stripe. And, like
the €20 and €50 – the new €100 and
€200 also incorporate a stripe with a
'portrait window'/foil combination.
However, these latest denominations
also include a new 'satellite hologram.'
The new satellite
feature is
located in the
top section of
the stripe (above
the portrait
window) for both
denominations
and shows small € symbols which move
around the denomination number and
become clearer under direct light.
What do the numbers say?
1988 was a watershed year for DOVIDs –
being the year that saw its launch on two
banknotes on opposite sides of the
world. The growth thereafter was slow –
another six years were to pass before a
holographic thread made its debut in
Finland, and eight years before it was
used on Kuwait's banknotes and as a
stripe for the Bulgarian lev.
During the 1990s there was nevertheless
a steady increase, and by 2000, 49
denominations from 27 issuers featured
DOVIDs.
The real shot in the arm for DOVIDS
came with the launch of the euro. This
was launched in 2002, but the
preparation and production started in
the late 1990s, at which time it was
known that all denominations would
feature a DOVID.
Not only was this a ringing endorsement
for the technology, but the suppliers –
printers, papermakers and DOVID
Examples of Kinegram APL with Kinegram zero.zero,
Kinegram Colors, Flux effect, Kinegram Volume, Kinegram
HDM and Kinegram Review on the The Essential Element
house note series.
Europa €100
An example of the new 'satellite
hologram' feature on the €100
banknote
Issue 35
17
TECHNOLOGY
OVERVIEW

18.
producers themselves – had all invested
heavily in technology and capacity to
produce the 14 billion or so banknotes
required for the launch. They therefore
had the means – and also, as became
apparent following the launch – the
incentive since, in the immediate years
following the launch, volumes fell
dramatically, resulting in huge over-
capacity.
By 2003, DOVIDS were being used on
105 denominations from 47 issuing
authorities. Four years later, the number
had jumped to 176 denominations from
69 authorities (a 67% increase).
For the rest of the decade, these
numbers continued to climb but more
slowly. By 2012, the corresponding
figures were 247 denominations from 83
issuers (a more modest 40% increase).
By the end of 2017, the number of
denomination had increased by 20% to
293 from 92 issuers.
During this period, and the latter half of
the last decade in particular, a number
of other optically variable technologies
were making their debut – notably
® ®
MOTION from Crane and SPARK from
SICPA, along with a host of new colour-
shifting effects
Would these end up displacing DOVIDs?
And is the DOVID running out of steam?
Far from it. One of the factors in the
success of the DOVID industry is its
ability to innovate and reinvent itself. Its
continuing growth in the face of a
panoply of alternatives continued.
The article was taken from the
Diffractive Features on Banknotes 2018
special report published by Currency
®
News .
Dr Mark Deakes, Director of Optical &
Authentication Technologies
(Reconnaissance International), General
Secretary of the International Hologram
Manufacturers Association (IHMA) and
®
Editor of Holography News and
®
Authentication News
350
300
250
200
150
100
50
0
Year
Noofbanknotes/Issuers
2000
Thread,Patch&Stripe
2003 2007 2012 2017
140
120
100
80
60
40
20
0
Number of Banknotes with DOVIDs
Number of Banknotes
No of issuers
Thread
Patch
Stripe
Issue 35
18
TECHNOLOGY
OVERVIEW

19.
Issue 35 GUEST ARTICLE
Decoding three factors behind
the growth of anti-counterfeit
market in India
By Ankit Gupta, Director Holostik Group
BIthe top-notch U.S agency has
Flabelled counterfeiting as the
'Crime of 21st Century' and it's
not a surprise. No doubt, counterfeiting
or duplication is a menace which has
jolted economies across the world and
India is no exception.
According to IMF (International Monetary
Fund), “Indian economy is witnessing a
steady growth due to the
implementation of several noteworthy
policies. Economic growth is expected to
pick up to about 7.3 % for the fiscal year
2018-19.” The growth is commendable,
but what about the growing market of
counterfeits? The implications of
counterfeiting are many, from revenue
loss of exchequer to undermining
foreign investment, loss of jobs to rise of
criminal activities and much more. A
FICCI CASCADE report states that the
total loss to the government due to illicit
markets in just seven manufacturing
sectors was Rs. 39,239 crores in 2014.
However, India is witnessing winds of
change and anti-counterfeiting
measures are being taken on many
fronts. Moreover, with new innovations in
anti-counterfeiting technology,
implementation of new regulations and a
rise of social awareness, days of
counterfeiting seem to be numbered. In
order to understand why this is the
perfect time for anti-counterfeit market
in India let's discuss three factors
directly favouring its growth.
Socio-Economic Stature
India got independence in the year 1947
and in the following years, for nearly five
to six decades, a large part of population
was struggling for the basic necessities
of roti (food), kapda (clothes) and
makan(house). It was only in the past
decade that a common Indian could
think of buying a branded product and
worry over its genuineness.
Of late, there has been a rise in the
spending capacity of an average Indian.
The luxuries of the past have become the
necessities of today. Despite the shadow
of economic uncertainties, rising
inflation, unemployment and other such
issues the socio-economic stature of
common men has improved. Consumers
are spending money on new innovative
products and services.
Along with this, there has been a
considerable increase in brand
awareness. Consumers of today are
living in an information age. They
instantly come to know about any small
or big news related to counterfeiting.
Countries with high socio-economic
stature also have forums and NGOs
which helps to raise awareness about
the problem of counterfeiting.
A high socio-economic stature makes
the consumer aware about the latest
anti-counterfeiting technologies which
can be efficiently used to differentiate
between fake and original products. It
also creates health awareness among
consumers due to which manufacturing
companies have to adopt anti-
counterfeiting measures so that any fake
or spurious product may not reach in the
market.
Regulations
In India, there is no law which
specifically governs counterfeiting. The
problem is largely dealt under
Intellectual Property laws as it violates
the IPR (Intellectual Property Rights) of
the victim. One of its examples is the
Trademarks Act 1999 which provides
measures against offenders who falsely
apply trademarks. The act allows the
19

20.
Issue 35
owner of a trademark to file a suit
against infringement. The Copyright Act
1957 provides the authority to police
officers to go ahead with the
investigation by seizing all fake items.
Some other acts which provide legal
remedies against counterfeiting are The
Patents Act 1970, Indian Penal Code
1860, The Customs Act, 1962, The Drugs
and Cosmetics Act 1940 and the
Consumer Protection Act 1986.
Due to the change in economic situation
of the country and to curtail illegal
practices, old laws and regulations are
being replaced or modified to suit the
present times. A case in point is the
Consumer Protection Bill 2018 which
will soon replace the Consumer
Protection Act. The bill empowers the
Central government to take steps
against unfair trade practices in e-
commerce.The bill also introduces the
provision of product liability through
which a consumer can take product
liability action against the manufacturer
for the harm caused to him or her due to
the defective product or any deficiency.
This will indeed bring down the number
of spurious/fake/adulterated products
which are being sold online.
To strengthen anti-counterfeiting in the
Indian pharmaceutical industry, the
Health Ministry had launched a reward
program. According to a news published
in Washington post the Indian Health
Ministry had launched a program in
which it offered a whopping amount of
Rs 4047175 ($55000)to those who
provided information about fake drug
syndicates. Besides this, CDSCO
(Central Drugs Standard Control
Organization) is on the verge of
implementing a track and trace
mechanism for prominent drug
manufacturing companies which are
most susceptible to counterfeiting.
The implementation of such regulatory
measures has created a cohesive
environment where anti-counterfeiting
technology can be implemented
efficiently with the support of all
stakeholders. Demand for anti-
counterfeiting technology is bound to
grow due to forthcoming laws and
regulations related to counterfeiting.
Technology
Technology plays a decisive role in anti-
counterfeiting. Perhaps, the most
revolutionary change in anti-
counterfeiting technology is due to the
evolution of smart phones. Smart mobile
phones have empowered the consumer
to instantly authenticate a product, in a
grocery store or a super market, with
much convenience. Today's smart
phones can read optical data, scan QR
codes, sendSMS & WhatsApp message
for determining the genuineness of a
product. It would be right to say that the
power of instant authentication has
reached in the hands of common man,
which was far from reality some years
ago.
It is due to constant evolution of anti-
counterfeiting technology that products
and brands have become much more
secure against duplication. In the
current scenario easy availability of
cheap forgery technology has forced
manufacturing companies to adopt
advanced authentication measures
which safeguard against monetary
losses and protect brand value in the
long run.
Anti-counterfeithas become a big
industry globally. According to a report
published by MarketsandMarkets, “The
anti-counterfeit packaging market size is
projected to grow from USD 107.26
Billion in 2016 to reach USD 206.57
Billion by 2021, at a CAGR of 14.0%”. In
India alone, the anti-counterfeit
solutions market is worth Rs 2000
crores and is growing at a rate of 15-20
% every year as claimed by the New
Indian Express.
According to ISO 12931, there are various
authentication technologies available in
the market which can be classified as
overt, covert, forensic and digital.
However, the holographic authentication
technology still rules the roost in anti-
counterfeit market and is witnessing
many new innovations. Security
holograms have recently incorporated
the power of Nano-Optics. Nano optic
material is one thousand times smaller
than a human hair. It manipulates light
on the nanoscale to produce 3D-
holographic effects. The feature is
impossible to replicate even with the use
of most advanced technology.
There is a high demand for anti-
counterfeiting packaging technology in
the food and beverages segment.There
is also a rise in the use of track and
trace technology for securing entire
supply chains. Authentication
technologies utilizing QR codes and bar
codes are also witnessing a wide spread
use in many industries.
Conclusion
From the above-mentioned points, it can
be concluded that the present scenario
is ideal for the implementation of anti-
counterfeiting products and solutions.
Due to rapid urbanization and
industrialization there is a high potential
for the growth of anti-counterfeit
industry.
Moreover, the entry of block-chain and
artificial intelligence technologies in
anti-counterfeit market will be
revolutionary. But, this does not mean
that they will replace the prevalent
holographic authentication solutions
instead, they will amalgamate to provide
a multi-layered security approach. In the
coming years, the two entirely different
technologies will not compete but will
complement each other. With enough
support of the government, market
players and the consumers anti-
counterfeit market is going to witness a
humungous growth in the coming years.
GUEST ARTICLE
20

21.
Trends and Drivers in
Tax Stamp Design and
Security
By Nicola Sudan, General Secretary, International Tax Stamp Association
hat does an excise tax stamp
Wlook like today, compared to
what it used to look like… and
what it may look like tomorrow? What
are the drivers that have shaped the
modern tax stamp and what are the
individual parts of that stamp that make
up the whole?
These are the questions addressed in
this special feature, devoted to the
evolution in the design, as well as in the
security features and functionality of tax
stamps – since all these elements are
inextricably linked.
Fifty years ago, tax stamps were nothing
more than simple pieces of printed
paper, with little or no security and no
serialisation. They served as tax
collection tools as well as physical proof
that the correct tax had been paid on the
product the stamps were affixed to.
Today, however, as a result of various
fiscal, regulatory, normative and socio-
economic developments –combined with
technological innovations in security
printing, serialised coding, data
processing and mobile communications
– tax stamps have transformed into
sophisticated devices with additional
roles relating to product authentication
and supply chain security.
To put the evolution of tax stamps into
perspective, let's quickly go back to how
the first tax stamps looked, all those
hundreds of years ago.
The origin of tax stamps dates back to
1637, when Spain was the first country to
introduce stamped paper. These early
documents were too large to affix to the
taxable item itself, but evolved into easily
attachable adhesive labels that
resembled postage stamps, as well as
long, thin banderoles for wrapping over
alcohol bottlenecks.
Even at an early stage in their existence,
tax stamps took on additional roles –
albeit unintentionally – just by the fact of
being attached to a product. As well as
providing visible proof of tax payment,
their very presence acted, to some
extent, as a guarantee that the product
was genuine. Furthermore, by being
positioned over the opening of a tobacco
package or alcohol bottle, they acted as
an anti-tampering/anti-reuse seal.
Tax stamps were originally used on a
wide range of products, but became
progressively less common in the latter
half of the 20th century, with the
exception of tobacco and alcohol.
In these sectors their use has grown,
particularly in more recent times where
technological developments have made
both the identification of individual items,
and the recording and monitoring of
revenues collected on them, much
easier to manage.
Evolutionary drivers
So what has driven the tax stamp to
become the sophisticated security device
it is today?
One of the earliest developments related
to the progressive, and sometimes
dramatic, increases in tobacco excise
taxes, implemented by many
A few 'old timer' tobacco and alcohol stamps.
Issue 35 TRENDS
21

22.
governments in a bid to reduce national
consumption and raise revenues.
As excise taxes grew, so did the value of
the stamps representing them. This, in
turn, made it more worthwhile for
criminals to produce counterfeit
stamps for the purpose of disguising
illicit, untaxed product. This
phenomenon led to the need for
stamps to carry robust, visible security
features – much like those on a
banknote – to distinguish them from
fake stamps.
But what had been considered robust
before the digitalisation era (which
began in the 1980s) was not necessarily
considered so there after. The digital
age saw the advent of low-cost, mass-
marketdigital reproduction technology
which, while revolutionising the modern
printing industry, had the negative
effect of providing counterfeiters with
affordable tools for producing high-
quality counterfeits.
Tax stamps, banknotes and other
security documents had to counter
these new threats by adopting security
features that could not be copied or in
any way simulated by conventional
reprographic methods (including
scanners and desktop printers).
The most notable of such features were
the hologram and optically variable
inks, which today feature on a vast
number of tax stamps.
Another technological driver that
changed the face of tax stamps related
to track and trace systems. The
development of digital reproduction
technology was accompanied by major
breakthroughs in both data processing
capability and mobile communications.
As a result, products can today be
marked in-line during production with
their own unique identifiers that are
recorded in a database. These
identifying codes may then be used to
verify the product in remote locations
and provide key data on source,
destination and authenticity.
The ability of tax stamp issuers and
others involved in tax stamp
programmes to monitor and record
complex supply chain data in real time
is something that could only have been
dreamt of a few decades ago.
Other drivers that are influencing the
design and construction of tax stamps –
at least those for tobacco – are
international regulations, the most
extensive of which is the WHO's global
Framework Convention on Tobacco
Control (FCTC) and its Protocol to
Eliminate Illicit Trade in Tobacco
Products.
The FCTC is not concerned with tax
collection and tax stamps as such, but
it does require its parties to implement,
by 2023, aglobal tracking and tracing
regime, using 'unique, secure and non-
removable identification markings such
as codes or stamps', that are applied to
each cigarette pack.
Another regulation is the EU Tobacco
Products Directive (TPD), passed in
early 2014 for implementation in May
2019, which has authentication and
supply chain control as its primary
objectives – and not tax recovery.
Like the WHO treaty, the EU TPD
requires all cigarette packs to be
marked with a printed or affixed unique
identifier. Unlike the treaty, it requires
packs to include a tamper-proof
printed or affixed security feature
composed of no less than five
authentication elements, at least one of
which must be overt, one semi-covert,
and one covert.
Given that both the WHO FCTC and the
EU TPD are not concerned with tax
collection as a primary objective, it
comes as no surprise that neither one
of them has mandated the use of tax
stamps as a carrier for the unique
identifier and security features. But
given that a significant number of
countries use excise stamps anyway,
there is no reason why the stamp could
not be used for all three functions: tax
collection, authenticity and track and
trace.
Indeed, some EU member states have
already decided to use their existing tax
stamps to meet the security feature
requirements of the TPD – and
eventually the FCTC Protocol – even
though some stamps may need to be
updated in order to comply with these
requirements. It remains to be seen,
however, how many member states will
also use the stamps as a carrier of the
unique identifier required for track and
trace, or whether they will opt for the
less secure method of having the
manufacturer apply it directly on the
cigarette pack, separately to the
security features.
A new driver in town
And now there is a new driver 'in town',
in the shape of the soon-to-be-
published ISO 22382 standard for the
content, security, issuance and
examination of excise tax stamps.
Among other roles, this standard has
been created (with the support of the
International Tax Stamp Association) to
guide tax authorities on the design,
construction, security and serialisation
of tax stamps, and should therefore
prove to be influential in shaping tax
stamps of the future.
Specifically, the standard advises tax
authorities to consider all components
of the stamp– and not just what's going
to be printed on it – when deciding on
its construction. This includes the
substrate, ink, adhesive, security
features and unique identifier.
Furthermore, authorities are advised to
use a combination of layered
authentication features – at overt and
covert level – when designing the
stamps. Several disciplines contribute
Issue 35 TRENDS
22

23.
to this combination, advises the
standard, including:
 Graphical security designs that are
difficult to replicate;
 Chemistry in the choice of inks,
lacquers and adhesives;
 Material science in the substrate and
adhesive;
 Optics in the optically variable devices;
 Encoding for the unique identifier
(UID).
The standard also advises the tax
authority to bear in mind that a printed
UID that is not associated with one or
more authentication features or not
protected against replication cannot
provide authentication.
The standard then goes on to highlight
the following best-practice techniques
that raise the barrier to fraud and
recommends that authorities
incorporate at least some of these in
their tax stamp design:
 Graphical security designs;
 Complexity in the design and
processes required to print the stamp;
 A combination of printing tools and
methods, especially in the small
space usually available on a tax
stamp;
 The registration of different parts of a
design, including graphic and security
features, within tight tolerances;
 The use of specialist techniques and
expertise that are difficult for
criminals to source.
Then with regard to the type of UID used,
the standard advises authorities to
decide at an early stage in the stamp
specification process: how the UID will
be used, what it will contain, how it will
be generated and how it will be
integrated in the stamp. Once this is
clear, the authorities will be able to
decide, for instance, whether they want
to use a plain-text human-readable UID
only, or a machine-readable barcode –
or both.
Examples of stamps that fit with the
norms and laws
So how does all this advice and all these
regulations translate into concrete
examples of tax stamps?
Below are some samples that
incorporate both the recommended
components of ISO 22382 and the TPD's
required security features and UID for
track and trace.
It is important to note, however that, as
far as the TPD is concerned, the below
samples represent optimum levels of
security and independence from the
tobacco industry (in that the security
features and UID are produced by third-
party suppliers),and that the TPD is
actually flawed in the sense that it allows
the tobacco industry to mostly produce
its own security features and control the
encoding and application of the UID onto
the product.
Such control by the tobacco industry is in
severe contravention of the FCTC
Protocol, which allows only a strict
minimum of tasks to be delegated to the
industry. Therefore, the below examples
serve to reflect both the spirit and letter
of the Protocol and should be especially
borne in mind by all countries that are
party to it.
Example 1: This example includes:
At least five authentication elements for
product authentication, composed of
printed and material-based security:
 Overt – 3D holographic effect;
 Overt – metallic aspect with colour-
change;
 Semi-covert – polarisation effect;
 Semi-covert – high-definition micro-
image and authentication of the
hologram with a smartphone;
 Covert – nano-images;
 Other – deliberate faults;
Tamper-evidence: frangible substrate
that is destroyed upon attempting to
remove the stamp;
UID in the form of a visible alphanumeric
sequence which is also encoded into the
QR code. Apart from the UI, the QR code
contains (or links to) the product's date
of manufacture, tax level, order
reference and product details.
Example 2: This example includes:
At least five authentication elements for
product authentication, composed of
printed and material-based security:
 Overt – colour-shifting ink in two
places: the 'SRI' logo and within the
QR code;
 Overt – fine-line definition;
 Overt – latent image;
 Semi-covert – double polarisation
properties of colour-shifting ink,
authenticated with a low-cost credit
card-sized polarisation filter;
 Semi-covert – UV ink;
 Covert – forensic marker that can be
authenticated using specialised
laboratory equipment;
Tamper-evidence: frangible substrate
that is destroyed upon attempting to
remove the stamp;
UID in the form of a visible alphanumeric
sequence. The UID is also encoded into
a QR code which casual inspectors,
including consumers, can verify with
their smart phone, as well as into an
encrypted DataMatrix code for use by
officials with dedicated devices.
Example 3 (based on the EU eIDAS
regulation):
This sample is based on an EU
regulation called eIDAS (Electronic
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Identity Authentication and eSignature)
which came into force in January 2018.
eIDAS provides a common foundation for
the use of electronic signatures and
seals, thereby improving trust in cross-
border electronic transactions in the EU
internal market. Although this sample
refers to an EU situation, its principles
could be applied to other geographical
regions faced with similar challenges.
As far its use on a tax stamp is
concerned, the electronic signature of
the independent UID issuer would be
incorporated into a large DataMatrix
code (as shown on the right side of the
above images), to provide proof that the
UID is valid.
The code (which is called a Visible Digital
Seal)can also carry the UID itself, which
is then matched against the UID in the
alphanumeric sequence and second
barcode on the left side of the above
images (obviously it should be the same
UID in each case).
Something else that the Visible Digital
Seal (VDS) can carry is a trusted link to
descriptions of the physical security
features carried on the stamp, which
inspectors can access without
connecting to a database. This is
especially useful in regions where no
two countries use the same stamps with
the same features in the same position
(which is basically every region in the
world).
Access to the information in the barcode
is made via a Trusted Entry Point, in the
form of a smart phone app, which scans
the code, checks the integrity of the data
and links to the description of the
security features, thus making the
inspector's job so much easier.
Although a solution of this kind has not
yet been implemented in the EU, the
principles of such a solution have been
recognised in some quarters and are
currently being assessed.
What else is out there?
The above examples represent what the
International Tax Stamp Association,
standards authorities and other
stakeholders consider to be among the
best combination of features to assure a
high level of security, independence and
interoperability, as well as an effective
system for track and trace.
By comparison, other examples which
are currently in use but which don't
necessarily tick all the boxes (or which,
on the other hand, add new boxes that
are not necessarily needed) include the
following:
Tracking labels for cannabis plants in
Colorado. These are not your traditional
tax stamp in that they don't denote any
tax value paid. Furthermore, their
apparent lack of physical security
features puts them at risk of being
counterfeited. However what they do use
is a very effective RFID technology which
allows a fast and labour-efficient system
for scanning and tracking a roomful of
plants;
Another tax stamp that uses RFID is the
fur label used to protect and track fur
garments in Russia and the rest of the
Eurasian Economic Union. This label has
it all: the electronic and digital features
of the label have been combined with
physical security features that include
microtext, metallic paint, a security
thread with a central window and latent
image, and an invisible, UV-luminescing
feature.
Apart from an RFID tag, the label also
carries a linear barcode (with
corresponding alphanumeric string for
human readability), as well as a QR
code. Together, these various elements
provide the label with three different,
open standard carriers for unique
identification.
RFID has often been touted as a track
and trace technology for tobacco and
spirits, through application to either the
packs/labels, or the tax stamps… and
just as quickly dismissed, due to the cost
and bulk of microchips, which render
them unsuitable for high-volume
products. Although developments in
printed micro-circuitry may eventually
lead to the use of RFID on tobacco and
spirits, this is yet to happen on a
widespread scale, and may even be
considered unnecessary – unlike the
above situation in Colorado where
roomfuls of densely stacked little plants
needed individual scanning.
And then we have the winner of the
award for the least secure tax stamp -
which goes to New Delhi.
The label used by Delhi Excise
Department is a very plain, purely digital
affair that seems to go to the opposite
extreme of its full-face hologram
predecessor. It is devoid of colour, as
well as of any printed or material-based
overt or covert security features for
physical authentication. There is no way
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of telling, just by looking at the label,
whether it is a fake, unless it happens to
be sitting next to a label with an identical
code.
This lack of visible security is one reason
why duplicates have been able to slip
into the market so easily, and the label
therefore provides an excellent example
of how not to produce a fraud-proof tax
stamp.
Is the future all-digital?
Looking now to the future, what kind of
tax stamps will we be using in five, ten,
even 50 years time? For instance, will
we eventually only use stamps that are
applied directly to the product in the
form of a code, and without any physical
security?
Although directly printed tax stamps, in
the form of human-readable
alphanumeric sequences and machine-
readable 2D barcodes, are already in
use (such as on beer products, for
instance), these stamps are generally
printed with anti-copy or other security
inks. If they weren't, the stamps would
be vulnerable to cloning, with the result
that it would be almost impossible to
distinguish genuine codes from clones.
Indeed, ISO 22382 advises: 'As direct
marking does not offer the variety of
authentication features that can be built
into a separate tax stamp, the tax
authority should require the use of
security methods, including inks and
other consumables, that incorporate
overt and covert components.’
So for now it seems that the most
secure way of producing tax stamps is to
combine digital and multi-level physical
features into a coherent whole on a label
substrate.
Maybe the day when smartphones are
able to do the job of the human senses
by recognising and validating
authentication features to a very high
degree of speed and accuracy, we will be
able to do away with overt features
completely and put all our faith in
electronic devices to tell us what's real
and what isn't.
But we're not there yet.
And at the end of the day, we'll never be
100% digital, will we, unless excise
products themselves also become
digital – or virtual?
And what does 100% digital even mean?
Because even a computer-generated
code applied by a digital printing
method, still has a physical, material
element to it, in that it is applied by toner
or ink to the product.
As far as purely digital technologies are
concerned, one could say that
blockchain (yes, that buzzword, again) is
a digital technology that could be used
for secure track and trace by providing
an immutable audit trail of supply chain
transactions for a particular item.
But what blockchain currently can't do is
bridge the gap – or 'last mile' – between
the digital record pertaining to a physical
item, and the item itself.
In other words, blockchain cannot help
us ensure that the digital record,
however immutable and verifiable it may
be, is linked to the right object. In order
to create that link, a secure unique
identifier still needs to be attached to
that object – in the form of a physical
tag, such as a tax stamp, or even an
embedded microchip.
'And this is where blockchain falls
down,' claims a Harvard Business
Review article (see TSN July 2018),
because 'at the interface between the
offline world and its digital
representation, the usefulness of the
technology still critically depends on
trusted intermediaries to effectively
bridge the last mile.'
In other words, it depends on 'flesh-and-
blood' human beings to accurately and
honestly match the object to its digital
record. And what it also depends on are
physical security features – verified by
human beings – to distinguish genuine
unique identifers from clones.
The article concludes by saying: 'as the
ecosystem around blockchain
technology develops, new types of
intermediaries will emerge that turn the
last-mile problem of keeping digital
records in sync with their offline
counterparts, into actual business
opportunities. While the technology is
early stage, as these key complements
mature, blockchain has the potential to
fundamentally reshape ownership over
digital data, and the digital platforms we
use every day'.
Interesting times!
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