We had anticipated that we use a cash a lot more than credit cards in Ecuador, but we’ve still been surprised by the degree to which, 12 years later, our day to day transactions require cash. We only use our credit cards at the chain grocery store, and (rarely) at very expensive restaurants. Most hotels and lodges, except those serving international business travelers or the very rich, won’t take credit cards. Rent, utilities, school lunch fees and school bus fees are all paid in cash. It doesn’t make sense for us to have establish an Ecuadoran bank account for our short stay, but even people who have bank accounts conduct these same transactions in cash. For us this means planning cash withdrawls for big expenses a week or two in advance so that we can accumulate enough (given daily withdraw limits) to pay rent or other large quantities, like the deposit for our upcoming trip to the amazon.
Given how much people rely on cash, it is amazing how no one ever seems to have change. At first we wondered why $1 coins are preferred over bills. Now we know it is because they are THE currency to have (everything seems to cost a dollar, or un dolarito), and because coins last so much longer than bills. Note: Ecuador’s currency is the US dollar, so we don’t have to worry about converting currency – just using it! A few examples of our experiences with the cash economy:
*Taxi Drivers NEVER admit to having change… they’d rather round up, especially since the taxi meters calculate to the penny. Our change dish in the US was a way to get heavy coins out of our wallets. Now we frequently empty the dish into our wallets to be sure we’ve got appropriate taxi fare. Just as I was writing this post Doug began digging through the coin dish to get what he needed for a little excursion with the kids, and obliged with a slightly staged photo of our daily change management activity.
* I mailed a letter from the main post office in Cuenca to the US, at the cost of $2.50. I had a $5 bill. Surely the main post office has change for a 5? Nope. The one employee on duty had to go over to the guy selling snacks in the corner to get change.
* The bus fare machines don’t make change. People who don’t have exact change will pay what they have (Say 50 cents for the 25 cent fare) and then stand by the door and intercept the next person's quarter (politely) before it gets to the box. The bus drivers monitor this closely and help to make sure people get their change from the next people getting on the bus.
* The man at the copy shop (I’ll have to talk about the huge number of photocopy/computer/internet shops and our frequent use of them in another post), would rather forgive me the 13 cents I owed him than have to make change for a dollar.
The only folks who reliably seem to be able to make small change are the ladies at the market. Thank goodness for market ladies!
You are giving me your what??? Is there no identity theft in Ecuador?
Perhaps the most surprising thing about paying bills in Ecuador is that most bills are paid by making a cash deposit directly into another person’s bank account. This is how I pay our land lady, the woman who runs the lunch service at the school, and deposits for hotel reservations. I guess people are not worried about identity theft because to facilitate the transaction the payee provides their account number and their cedula, or state ID number (or passport number, in the case of foreign nationals who own hotels). Then I just walk into the bank, fill out a deposit slip, and put the money in their account. Usually the next step is making a copy of the receipt that then has to be given (or sent via email) to the person/business I just paid. Thus my 13 cent bill at the copy shop that I mentioned above. Have I mentioned that I really miss electronic banking?
Shortly after we moved into our long-term rental a shut-off notice was taped to the door of our complex. It was for one of our neighbors, and I jumped to some conclusions about his bill paying habits. But then a few weeks later we got our own immediate shut-off notice, and I began to appreciate the complexity of the situation.
The state runs the water and sewer, electric and telephone companies. Our rental house receives all of these services, but the accounts are all under different names (one for the current owner, two for the previous owner), because it is a hassle to change the name on accounts. The utility companies do not send out bills each month, but do charge a fee if the bills are not paid on time. How do you know what owe? Present in person to pay the bill….
The reason our water was threatened with shut-off is that when our landlord tried to pay our bill several weeks before we moved in, the reading had not been taken so the amount due was not known, so he could not pay it. Three weeks after we moved in, the payment was overdue, but no one knew (until the notice). Luckily our landlord was very responsive and quickly paid the bill.
To pay the utilities one can go to stand in line at one of the big service centers with the appropriate cash. Or, one can pay through other authorized locations, like the little copy/internet/banking store close to our house (see picture below). Usually they are a small room with 3 computer stations, a printer, a scanner, and a cashier. These stores have accounts with the utility company, and will make payments for you electronically. Sometimes. Other times they are out of money in their accounts. Or there is a connection problem. So on the 27th go to this little store and they use a hand-held machine that looks like a credit card scanner. They spend 5 minutes punching in numbers, obtain the amount due in the account, and then make the payment for me, for which I pay them in cash. My understanding is that it is possible to make these payments with an electronic transfer if one has internet banking and the utilities are all in the appropriate name. But judging from the amount of use the service centers get, I don’t think many people take that route.