Traveling is a uniquely enriching experience. Few other endeavours can force you through multiple highs and lows every day. On the downside, managing money on the road can be a hassle. Many travelers experience high fees, fraud, theft and locked out accounts. Thankfully there is an alternative form of money that can alleviate some of these problems.
We don’t know its creator, it doesn’t “physically” exist and no one controls it. You may not be aware of it, but it is growing by the minute. It is the native currency of the internet. It goes by the name . I decided to conduct an experiment to find out if can improve the traveling experience.
The test was simple. I would go to Colombia for two weeks. While doing all the fun things possible, I’d test using against some common payment methods. This experiment will be posted in two sections. Part 1 is an analysis of the different payment methods. The goal here is to help other consumers make informed decisions with their money. Part 2 is a story of the adventure. This will explain the why behind the objective conclusions in my analysis.
Payment methods under the microscope:
- bitcoin
- Debit card at Point of Sale (POS)
- Credit card at POS or Online
- Cash – ATMs
- Cash – Foreign Exchange
- And a last-minute surprise
Evaluation Metrics
- Fees: How much did it cost to use this service? % and/or $ amount.
- Convenience: How many sellers accepted this payment? Did I have to travel far? Research before?
- Experience: How did I feel when performing transactions? After they were complete? Would I do it again? How do you interact with the services or products?
Each payment method reviewed includes a brief description and evaluation metrics. Payment methods are listed in the order used throughout my trip. Results are then compiled for a weighted comparison. Finally, the winners are ranked and I make comments on my findings. Supporting calculations are contained in the references. Do enjoy!
Foreign Exchange: Canadian Dollars for Colombia Pesos, in Canada
Always have cash before you leave as being prepared will allow you to fully enjoy the first experiences of your trip. I would recommend getting foreign cash at least 7 days before traveling. My bank wasn’t able to provide Colombian Pesos in under 4 business days. At the banks recommendation I had to use a foreign exchange desk instead.
Evaluation
Credit card at POS or Online
Credit cards are incredibly convenient, easy to use and reliable. They eliminate your exposure to simple cash robberies, provides buyer protection and saves time from visiting banks or ATMs. I typically prefer using credit cards to travel. These numerous benefits, not to mention travel points, add up.
I found that Colombia was not credit card friendly. Hostels will often surprise visitors who booked online with an extra fee (2% to 5%) upon arrival. Restaurants and shops generally didn’t accept this form of payment. Flights, buses and tour operators are the few places accepting credit cards.
These hurdles encouraged me to switch to cash. This resulted in a small sample size which was limited to early in the journey.
Evaluation
Debit card at Point of Sale (POS)
This was not a great test on my part. I made no attempts to use a debit card. Any data from this method will be redacted from the final results.
For comparisons sake, I checked with my bank to see what fees I would’ve incurred. I learned my VISA Debit card could make purchases in the USA but not internationally. The only options available were to withdraw cash from an ATM or visit a financial institution partnered with my home bank.
Evaluation
bitcoin
is still a relatively new offering for money and payments. The penetration of services varies widely. Doing preliminary research is a necessity if you want to use it while traveling. Browsing and can provide a good snapshot of usage wherever the travel bug is pulling you. It is important to be on the lookout for ways to save on exchange fees. You’ll thank yourself later.
Using in Colombia was a great experience. The transaction went through quickly; I made a new connection and it turned into a fun afternoon. Using wasn’t without its flaws, however. It was the most expensive option so far. Also, converting to cash was not as available as competitive financial services.
is a great financial alternative that can provide you with control of your funds, borderless convenience and relative anonymity. Traveling provides a great use-case as it is the same anywhere in the world. Usability is heavily reliant on local business development and demand for coins. is blossoming around the globe and is worth exploring if you frequently cross borders.
Evaluation
Withdrawing from an ATM in Colombia to receive COP
Before I was able to experience the thrill of using a Colombian ATM machine, things took an unexpected turn. My was pickpocketed. For this analysis, withdrawing from an ATM could no longer be included. The Table below only for estimation or comparison based upon post and pre-trip research.
Evaluation
It Gets More Interesting…
The worst part about having my stolen wasn’t losing the cash. The sum total I lost was only around $100,000.00 Pesos or $40 Canadian, unfortunately, I kept my driver’s license, insurance card, 2 credit cards, and 3 debit cards together in my . Every easy connection to my money: gone. Ironically the only thing I typically keep in my that I didn’t lose was my bus pass. It was functioning happily as a bookmark at the time!
My first instinct was to switch to . It would’ve been the easiest, quickest way to get cash as I could easily sell coins without needing an institution. Unfortunately, the town I was in was too small to have any options.
Trying to get money out of my bank was next to impossible. I called customer service numerous times to no avail. 6 hours and an $800 phone bill later, I was still locked out of my accounts. Without a peso to my name, I was down to one option. Getting bailed out by my parents using .
Surprise: Western Union Money Transfer
Western Union (WU) saved me in an emergency. Sending money was simple. On the sender (or parents) , the amount to send, the local currency and if the recipient would like to receive cash or a bank transfer. This produces a (MTCN). After 1 hour, the receiver goes to a WU provides their ID and MTCN and collects their cash.
Knowing how to use Western Union is a handy tool for traveling but it isn’t be my first choice.
The fees were high. They also requested taking fingerprint scans and passport copies, which I do not support. If you choose to use WU ensure the information on the transfer exactly matches your ID. No nicknames or short-hand.
However, the service is quick, straight forward and prevalent around the world. Keep Western Union in mind if you are ever in a pinch.
Evaluation
Foreign Exchange (FX) Colombia Pesos (COP) for Canadian Dollars (CAD) in Colombia
If you don’t want to keep local money as a souvenir, airport foreign exchanges can help for that last-minute swap. Make sure to pay attention to fees and spreads as they can be high. Ask what the service’s identification policies are before you begin a transaction. The Bogota airport required fingerprint stamps and passport copies to exchange money, similar to Western Union.
I assumed the airport would be the most expensive place possible to exchange money but, to my surprise, it was one of the cheapest payment methods I used. I’d suggest using the foreign exchange desk if you are ever leaving Colombia through Bogota airport as they have competitive rates!
Evaluation
Summary of Results
Included in Final Scoring:
Method for calculating total
Fee rank = 1–5. Lower fees equate to higher score relative to other payment methods.
Fee rank (X) + (qualitative scores / 2) = total score
Example: Credit card
- Fee rank = #2 overall. X=4.
- Qualitative score = (7/10) / 2 = 3.5
- 4 + 3.5 = 7.5/10
Final Results:
Not Included in Final Results:
Winner:
If Included in Results, Overall Winner:
- Withdrawing from ATM of partner bank of your home institution
Lowest Fees:
- Withdrawing from ATM or partner bank of your home institution
Highest Fees:
Most Convenient:
Best Experience:
The Ultimate Control or Backup:
Ending Comments
Remember when I said traveling takes you through highs and lows? This trip was no exception. This journey taught me new lessons and reinforced some old.
First, always have a plan B! Keep your cards, money and coins separate and inaccessible from each other and be prepared for everything.
Second, traditional payment methods currently offer some of the lowest fees and are the most convenient way to pay. Crypto still needs to improve in order to provide a service that significantly outweighs the benefits of being with a bank.
Third, after reviewing the numbers I realized that my rankings are heavily skewed towards fees. This is an oversight on my part as the real world isn’t as simple as that. Messy things can happen. Convenience, access, privacy and other measures can suddenly outweigh the relevance of cost. Humans quickly become price inelastic when something as critical as money becomes scarce.
Fourth, I felt what it was like to be without any options. The feeling of helplessness was scary and frustrating. I only had to struggle for a few days while millions of people go a lifetime in the same circumstances.
Finally, has achieved at least one goal that Satoshi set out for. It is continuing to prove itself as a well-designed, peer to peer cash system and an insurance policy against banks. My lifelong institution, Scotiabank, failed me. would’ve been the best work around to my problem. My circumstance just happened too early in history.
hasn’t reached all corners of the globe yet but I believe is getting a little closer every day. One by one, we all have to carry the , illuminating the path towards a bright financial future.
If you enjoyed this article, please share in whatever way you choose.
Published at Mon, 29 Apr 2019 00:51:42 +0000
