Wednesday, 19 May 2010

Useful and useless in my wallet

Last week I picked up my ZTM Karta Miejska (urban transport authority City Card). I was amazed at the fact that a) I could choose whatever pictorial design I wanted - regular readers will recognise the illustration by Jan Lenica from Julian Tuwim's Lokomotywa - and b) it was ready for collection within two days of me applying for it online (which you can do here).

I uploaded a month's worth of Zone 1 travel (78 zlotys or a mere sixteen quid). Zone 1 is nine miles (give or take) from the city centre - the same radius as Zone 3 in London. A monthly TfL travelcard for London (Zone 3) costs one hundred and sixteen quid. If I want to get even more value for money, I'd be buying a quarterly (90-day) Karta Miejska contract for 196 zlotys or 41 quid - or 2.10 zlotys (40p) a day. The Karta Miejska is a great institution.

Unlike the two hundred zloty note (below), Poland's largest denomination banknote. The cash machines at PKO BP have of late started producing these. On Monday morning, I withdrew 400 zlotys and unwontedly got two 200 złoty notes. Since then, I've been wandering around Warsaw unable to do anything with them. I can buy neither food nor coffee nor newspapers. Kiosk vendors laugh at me when I show them the money. Today Mariola bought me a paper and Matthew bought me lunch. I'm a trained journalist reduced to the status of a bum.

The BBC this week ran a story about the €500 note being a problem. This is a sum of money worth ten times more than the 200 zł note. Yet Poles are only three-and-half times poorer than the citizens of the eurozone. So why the 200 zł note's pariah status?

It's to do with the Polish banking system's inability to circulate sufficient loose change into the economy, something I wrote about here. A kiosk owner, looking at a 200 zł note sees his entire morning's cash float disappearing in one single small-value transaction.

I should have ordered 350 zł from the cash machine - one stoover and three fifties. No problem with fifties. Stoovers are more problematic, but nowhere near as difficult to get shot of as 200 zł notes.

The whole business has prompted me to consider what the purpose of high-value banknotes is in any economy other than an instrument to avoid the taxman. Whenever I pay more than 50 złotys (11 quid or so) for anything, I use a debit or credit card. What's the sense of holding the cash? What is the point of any central banker printing large denomination notes?

Roll on the payment revolution. Mobile banking and mobile payment. I upload money from my bank account to my mobile phone account, and via a proximity chip in my phone (using NFC - near field communication technology), I can make small value transactions such as a newspaper or cup of coffee without having to reach for coins or notes or worry about change.


jan said...

I must confess I'm an ***hole when it comes to changing money. Even though most of the time I'm unsuccessful in forcing these people to change large denominations, I still hope a repeated nuisance of dealing with me will have some educational value. No remorse really - running a "business" takes more than just having some stuff for sale.

Last week's dialogue in a cafeteria - where I tried to purchase tea worth 2pln with a 100pln note - went as follows:
- Mister, I'm unable to change a 100 zloty note.
- That's your own problem.
- But I just don't have enough change !
- There's a post office next door, go get some, I'll wait.
- I can't just shut this place in the middle of the day.
- Do you accept card payments ?
- No.
- Well, I'm not going to change my mind.
- [Pretends to be desperate] So what I'm supposed to do ?!
- I don't know. How about me taking the tea and you calling the police ? But be advised it's illegal to refuse a transaction with a valid note.
- ???
- The fine is 500 pln.
- [With clear disgust] Oh well, just take your tea and come pay later when I collect more change.

So, fight for your right not to be a bum.

Anonymous said...

Wow! Jan, I hope the tea was worth the trouble, while the 2 zlotys was burning a hole in your pocket. I never had any issues with changing 100 zloty bills or spending them for that matter, when in Poland. You can’t be Polish Jan.

jan said...

It could be you frequent better cafes, Anon. In the neigbourhood of Plac Trzech Krzyży they surely change all posible notes.

Anonymous said...

Perhaps. Café Latte Grande most anywhere is my favorite. But seriously, prepaid Café cards are the solution, cards that can be loaded online, advertising any business.

pinolona said...

Oh this was my pet peeve in Kraków! And I was a poor graduate with usually nothing bigger than a 50 PLN note!
I wrote about it too ( scuse the shameless self-advertising!

student SGH said...

1. The useful...

Don't they have Polish diacribes? I don't know if they should, I use my student card (legitka) as travelcard. One can harp on about the quality of Warsaw public transport, but it has one undeniable advantage - it's dirt cheap. With my student concession travelling within the borders of capital sets me back mere 98 PLN per 3 months.

Warsaw public transport in the centre is quite reliable, and though not very comfortable, much more convenient than a car. But sometimes the ride may be rough. Today I had an interview somewhere around the corner of Al. Jerozolimskie and ul. Popularna. I got there from my school within 30 minutes and the service was brilliant. I left the office at 15:09 and the spate of misfortunes began.

15:09 - 15:38 waiting for any of 3 buses which run towards the centre. Each runs once ia quarter, none came.

15:38 - boarded a packed 517. Up to the junction of ul. Kopinska and ul. Grojecka the driver put his foot down

15:50 - the bus got stuck in a traffic jam on ul. Grojecka, I was an idiot not to change it to a tram

16:10 - got off on Pl. Zawiszy, trams were packed to the limits so I covered the distance between Pl. Zawiszy and Al. Niepodlegosci on foot.

16:24 - got into a tram next to Dworzec Centralny

16:35 - changed the tram into underground train on Pole Mokotowskie

16:45 - jumped into departing 709 bus

17:20 - got out of the accursed vehicle in Mysiadło

17:33 - back home.

That made two hours twenty eight minutes for a door-to-door journey. The distance (not along the route I covered) is around 18 kilometres). Average speed - 7 kilometres per hour. Around one hour by bike, the same time on foot...

2. The useless...

If you use cash machines of Pocoś K***a Oszczędzał?, does it mean you have an account in that bank? You've been ranting about badly-run state companies and now what comes out? I can't agree with the ones who gripe about Polish banks being bought up by foreign capital. At least the quality of services is higher and prices are lower than at PKO BP.

Back to the core topic, I'd take 190 PLN. That's my trick for outwitting malicious cash machines. I hardly ever use them. Credit card is what I use for payments - the most convenient cause I don't have to care about liquidity on my current account, I just I pay it off at the end of each month.

My first bank (Citi Handlowy) has recently introduced a pay-pass debit card but I'm somehow not convinced to this new invention. Plus in small shops, in vending machines and in many other points loose change is and will be indispensable.

And 200 PLN note - use it in Auchan or just go to any bank branch and ask to change it.