“Don’t you have any smaller notes?”

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The topic question is what I hear too often when trying to buy something while travelling abroad. So I have only big notes for a purchase of minimal price. What I pay with cash is drinks, snacks, small meals, bus rides, tips or other minor payments. Bigger payments like flights and hotel nights are usually paid by credit cards. Paying with large notes also eats my credibility as a budget traveller. Imagine, for instance, haggling hard for a cheap taxi ride only to hand over a large note hoping he got enough change.

The problem stems from ATM’s that disperse notes. I don’t like to carry large amounts of money with me. But when drawing money from ATMs in foreign currency, fees will be relatively cheaper the bigger money is withdrawn (usually fees consist of fixed fee plus a percentage charge). Drawing large amounts of money has the drawback of unnecessary large notes being dispersed. It would be good if ATM’s asked for preferred note sizes, but I’ve never used such an ATM. However, the ATM may say which size of notes are being dispersed. If it will give out large notes then it makes sense to try another ATM. Another trick is trying to be clever when choosing the amount to be withdrawn. For example, if drawing 990 USD instead of 1000, then at least 90 USD will be given as smaller notes. But the rest may still be issued as 100 USD notes.

South African 200 rand note. It has a value of approximately 15 USD.  This may not sound much, but the seller may not accept these notes for payment less than 100 rand.
South African 200 Rand note. It has a value of approximately 15 USD. This may not sound much, but the seller may not accept these notes for payment less than 100 Rand.

In most African countries largest notes are usually valued no more than 15-20 USD, but even that’s too much in many situations, like when paying at stalls.

Cashless payment would be solution to this problem. There are diverse range mobile payments platforms already available, say Apple Pay, Google Wallet, M-PESA and numerous others. But these are all restricted to certain devices, countries or mobile operators. In addition, the number of services acceping any type of mobile payments is limited.

M-PESA, originating from Kenya, is a good example of successful mobile payment system but also of it limitations. M-PESA has proven to be very popular payment, cash transfer and mobile banking system in Kenya. Many people now receive their salaries through M-PESA, remember this is a country where most people don’t have bank accounts. M-PESA is operated by Safaricom mobile operator, so one needs a Safaricom SIM card to use M-PESA. Any Safaricom user, also tourists, can register for M-PESA. Other mobile operators in Kenya are not happy about M-PESA, as M-PESA’s popularity only fosters Safaricom’s dominant market position. M-PESA has been exported to numerous other counties, mostly within Africa. These are separate systems to each other, but cross-border transfers are available between certain countries.

In an ideal situation, there would be a universal mobile payment system, so I could use my home account anywhere, any country, with minimal extra fees. Maybe this is wishful thinking, or could it be reality within next few years?

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