Securitas, the world's largest security services group, expects the use of cash to increase in Europe next year as travellers replace credit card transactions with newly issued euro notes and coins.

Santiago Galaz, head of the Swedish based company's European cash handling division says travellers currently use credit cards in other European countries to avoid having to exchange cash or pay charges to withdraw it from ATMs (automated teller machines).

"The euro will increase the use of cash in Europe," Mr Galaz says, pointing to the case of Spain, where he expects many tourists now using credit cards will simply bring cash with them from their own eurozone countries.

For Securitas, which is Europe's largest cash handling company, the introduction of the euro has created significant amounts of extra work, with the company expecting an additional SKr500m ($47m) to SKr600m in revenues. This is mainly due to the distribution of the new notes and coins and the collecting and processing of the old national currencies.

The company started delivering parcels of coins and then notes to banks in September and is now distributing them to retailers in an effort to "front-load" the system and prevent bottlenecks in January.

For security reasons, coins have been moved first, followed by the higher-value notes. Security concerns have also been behind the decision to leave retailers until last, as many have only limited secure cash storage facilities.

While the process in the run-up to the introduction is well controlled, the collection and processing of the old money is more unpredictable. "In January and February, we are going to have double currencies to count and process," Mr Galaz explains.

Things will be particularly difficult if people try to get rid of their old notes and coins in a rush in the first weeks. Despite efforts by some countries, including Germany and Belgium to collect hoarded coins in advance, there is also an expectation that piggy banks will be emptied after January 1, producing "a lot of old and low- denomination coins which are not very easy to handle", Mr Galaz says.

In the longer term Thomas Berglund, Securitas' chief executive, expects the euro to alter the flows of cash across Europe.

"In the old economy there would be a lot of D-Marks exchanged in Mallorca which would then go back to Germany. Now these are just German euros which can go to Barcelona, Madrid or perhaps parts of France," says Mr Berglund.

This does not mean that cash movement will disappear altogether, as excess dollars, pounds or Swedish krona will still have to be repatriated. Moreover, there will still be areas, such as the Spanish coast, that will have a surplus of cash in need of dispersal.

For the cash handling business, the euro is seen as creating opportunities with greater efficiency and simplified processing. Securitas says the focus on the changeover has forced banks and companies to re-examine their cash management systems and consider outsourcing a function many no longer see as belonging to their core operations.

It will also allow the industry to rationalise its own network and establish-cross border collection points. For example, cash from Austria could easily be processed in southern Germany and vice versa.

This said, though, there is still some way to go before the cash guarding business can become truly cross- border, as national laws on issues such as firearms and armoured vehicles can differ. Euros travelling from Germany in an armoured van will still have to be transferred to a French specified vehicle at the country's border.

Yet if Mr Berglund is right, the attraction of the new currency will not be limited to the eurozone's law-abiding citizens.

For example, he says that in Portugal there have traditionally been very few attacks on cash-carrying vehicles because with so many notes needed to make up a large amount the escudo was "not attractive to steal. . . it is too clumsy to handle".

"Of course, a euro produced in Portugal will be as attractive as in any other country, so we have increased our security levels there," he explains.