An easy guide to foreign exchange

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Cash? Credit card? Travellers cheques? Choosing the method of payment when making a purchase in Africa is not as easy as it seems. Business Traveller provides a few tips for those travelling to African destinations.

*Nigeria:

Local currency: Naira

Other currencies accepted: US Dollars

Exchange rate: 1Rand = 20,67 Naira

Cash or card? Andrew Stainforth, FX Africa’s Regional Manager for Africa, advises against using credit cards in Nigeria. He says the best option is to take cash. He explains that South African Rands should be converted into US Dollars while in South Africa, travellers can then exchange the Dollars for Naira on arrival in Nigeria. Some hotels and street vendors do accept Dollars.

Tips: Andrew McDonic, Managing Director at American Express Foreign Exchange, says: “It is now possible to pay in major hotels by credit card, but until this beds itself down, I would not recommend this payment method and would suggest paying in cash”. According to Stainforth, it is best to take small Dollar notes to exchange into local currency so that travellers are not left with Nigerian currency at the end of their trip. He also says that while local currency is sold on the black market and at hotels, the exchange rates charged by these are usually higher so it is advisable to use a reputable commercial bank.

*Democratic Republic of Congo

Local currency: Congolese Franc

Other currencies accepted: US Dollars, Euros, South African Rands

Exchange rate: 1 Rand = 122.29 Francs

Cash or card? Again it is advised to use cash when travelling to the DRC. Stainforth says credit cards are, however, slowly being used at various outlets. He adds that the cash passport card is also an option, but that there is a very limited number of ATMs. Travellers can buy foreign exchange up to 60 days before departure. Stainforth says travellers taking over large amounts often prefer to divide their money up and buy the dollars at different times to try and get the best exchange rate.

Tips: One of the things travellers need to be aware of is pickpocketing. Stainforth says it is a good idea to split money into different wallets, so that if they are pick-pocketed they won’t be left stranded with no money. He adds that a copy of the traveller’s passport, credit card and e-ticket should also be carried separately from the originals. The second wallet should be left in the safe of the hotel where the traveller is staying.

*Angola

Local currency: New Kwanza

Other currencies accepted: US Dollars and travellers cheques in British Pounds and Euros

Exchange rate: 1 Rand = 13 New Kwanza

Cash or card? Credit Cards are not widely accepted in Angola, but there are limited facilities in the country where it is possible to pay by card. Cash is the best option, but travellers cheques are accepted at some outlets.

Tips: McDonic says business travellers should shop around for the best rates and charges from either their banks or a reputable bureau de change. He adds: “It is important to understand the total cost of the transaction, as certain of these institutions have hidden costs which you only find out about once the transaction has been completed.”

*Egypt

Local currency: Egyptian Pound

Other currencies accepted: US Dollars, Euros, British Pounds

Exchange rate: 1 Rand = 0.75 Pounds

Cash or card? McDonic says credit cards work reasonably well in Egypt. There are a number of outlets and hotels which are able to take credit cards and cash cards. Egypt’s banking industry is also reasonably established, so there are a number of ATMs available to draw cash. There also many foreign exchange outlets in the busier parts of the country where travellers can convert their money into local currency, but certain vendors, hotels, tourist attractions and even taxis will accept Euros, Dollars and British Pounds.

Tips: Egyptian banks don’t accept Rands, and South African banks don’t stock Egyptian Pounds, so travellers should buy US Dollars or British Pounds while in South Africa and convert these to Egyptian Pounds on arrival in Egypt. Michael Daniels, Head of Transactional Products at Nedbank, says travellers should be vigilant when using an ATM as some ATMs may not be as straight forward as those in South Africa. “If you need to withdraw any cash rather try to withdraw from a bank, it may be more expensive than the use of the ATM, but it will remove the worry of having your credit or ATM card swallowed by the ATM,” he says. Daniels adds that in some instances the system may be offline in the foreign country, so it is useful to have another form of payment available.

*All exchange rates correct at time of going to print

 Advice from the experts

*Carrying cash:

Daniels recommends that travellers take at least a small quantity of cash when travelling. “Cash also has the advantage of locking in the exchange rate on purchase of the foreign bank notes,” he adds. Daniels warns that large denominations are sometimes not accepted by some merchants. “In Africa, the US Dollar is king,” says Craig McFarlane, Head Retail Operations for Bidvest Bank’s Johannesburg Corporate Office. But he warns that with the rise of counterfeit notes in circulation, it’s advisable to travel with the latest US Dollar notes which feature anti-counterfeiting measures.

Tips:

  • Foreign coins are not repurchased as they cannot easily be resold to other travellers.
  • SA Reserve Bank regulation requires travellers to change back any unused currency within 30 days of returning from a trip.
  • When departing from your hotel for a day trip, try and leave the bulk of your cash in a safe place, e.g. safe in the hotel room.
  • Refrain from flashing your money around as this could lead to being targeted. Keep wallets and purses out of plain sight. Don’t leave it in your back pocket or anywhere else where a pickpocket could get their hands on it.

*Swipe it

Cards are not only convenient because they reduce the amount of cash that needs to be carried, but Daniels points out that for business travel the statements provide a useful audit trail of expenditure. He adds: “For unused cash and travellers cheques, when the client exchanges these back into Rands they will pay for the exchange conversion. With cards there is no “unused currency” on return to South Africa.” The down side of using credit cards, explains MacFarlane, is that credit card skimming is becoming more and more of a problem in Africa and that when using a credit card, the traveller has no control over the rate of exchange applied by the banks to the transactions.

Tips provided by MasterCard:

  • Before you leave, check the expiry date and credit limit of the card.
  • Contact the bank that issued the card and let them know where and when you’ll be travelling so the bank is aware that overseas transactions will be made.
  • Ask the bank if you need to change your PIN number so that it will work in the country you’re visiting.
  • When making purchases ask whether your card will be charged in the foreign currency or in your country’s currency. An increasing number of merchants are equipped to convert the cost of a transaction to the cardholder’s own currency.
  • If the card is lost or stolen, cancel it so that the money remains in your account.
  • If you use a credit card to book a hotel or hire a car, the company may put a hold on your account for the total amount of the expected bill. This could be an inconvenience if it ties up your entire credit card limit.

*The Travellers Cheque

Daniels says travellers cheques are safer than cash as the traveller has to sign when using them, and they can be replaced within 24 hours if lost or stolen. They also allow travellers to lock in the exchange rate on purchase of the travellers cheques. MacFarlane says while traveller’s cheques are still accepted in Africa, it may be difficult to exchange except at larger branches of banks in major cities.

Tips:

  • Store traveller’s cheques separately from a wallet, so if the traveller’s wallet is lost or stolen they still have access to money.

Nedbank, says Daniels, recommends that customers consider taking all three forms of payment when travelling. The proportion of each, however, will depend on the reason for travel and the destination. “When travelling to countries in Africa, cash should make up a much larger portion.”