16 February 2009

Just write me a check!

THINK about the many times in your life checks have been involved... than try to imagine never ever writing or getting a check! That's the typical experience in Russia.

Cash is king. In the first few years here we had to travel to the International Moscow Bank on Fontanka to get dollars from New Jersey. Carrying large amounts of cash made me nervous, but was viewed as normal by the people around me.

In December 2000 I returned from surgery in New York City, carrying thousands of dollars, some of which was to pay off a loan owed by a Russian friend in Brooklyn. Going though Pulkovo customs, the guard asked me to show any cash and then to pocket it again. That was enough of an indicator for the thief who ran past me as we walked to the parking lot. Only when we were in our apartment did I realized that one of the envelopes had been swiped. I reimbursed more than half of the loan payment... but lost a friendship as he thought I should have reimbursed 100%.

In 2001 we purchased a second apartment for family. We brought all the money in cash to the closing... a very strange experience for me.

I have seen a gradual increase in the number of Russians who have debit cards. Since around 2005 ATM machines have appeared at banks and shopping centers. We get a good dollars to rubles exchange rate from one in our neighborhood, no longer needing to visit the money changers at kiosks near Pionerskaya metro... which was risky.

The majority still keep their savings at home. Imagine where you would hide cash... and then get more creative! Problem is, sometimes when people die their rubles are never found, except inadvertently by a stranger that now has that picture or furniture or whatever!

We never use our debit cards to pay bills in Russia because I am worried about fraud. We pay bills with cash at Sherbank, the post office, or use one of the recently introduced cash payment machines. These machines charge an extra 5% for the convenience of paying bills when at the supermarket. You scan in your rubles and indicate the amount of the bill. You can save this 5% by travelling to a special payment office such as Intel has, the internet cable company.

Cash has its risks, not just because of theft. In Russia small stores expect you to have cash ready close to what you have to pay. Otherwise, it isn't uncommon to be refused a purchase with a blank or negative look, and out the door you go... sheepishly! Forget about the value of long term customers, the profit motive, or casual pleasantness.

No checking makes Russia a difficult place to do transactions. Paying bills can use a lot of time and effort that just isn't experienced in Western countries. It's an impediment that's helpful to understand before you arrive in St. Petersburg!

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