With many of us still experiencing cold and rainy winter weather, let’s look to warmer climates as Glenbrook’s Chris Uriarte walks us through his payments journey in French Polynesia.
If you’ve attended a Payments Boot Camp, you’ve heard us say that payment systems are domestic by nature. The experience Chris has in the islands of French Polynesia really brings that point home. Listen in to hear his observations and key takeaways on local payment methods.
Yvette Bohanan
Welcome to Payments on Fire, a podcast from Glenbrook Partners about the payments industry, how it works, and trends in its evolution. I’m Yvette Bohanan, a partner at Glenbrook, and co-host of Payments on Fire.
Yvette Bohanan
We are ringing in 2023 with a Fanning the Flames travel log series to talk with our team members who racked up lots of miles around the world in 2022 to hear firsthand about their experiences and observations with local payment networks across the globe. Joining me on this podcast today is Chris Uriarte, one of our partners.
Chris Uriarte
Good to be back here, Yvette.
Yvette Bohanan
Welcome, welcome. It’s always wonderful to connect with you. And I’ve got to ask, what’s on our docket today? Where have we landed?
Chris Uriarte
So we’re talking about going to French, Polynesia.
Yvette Bohanan
Oh, well, that’s good to hear. So you land in what city? Where were you?
Chris Uriarte
Yeah, it’s a collective of many, many islands. But the famous island of Tahiti is the largest island and also the home to French Polynesia capital. So all the international flights come into Papeete which is where the airport is.
Chris Uriarte
It’s the closest thing to a city that you’ll find in French Polynesia. There’s a lot of energy there, a lot of cars moving around, lots of traffic in a very small space. But it doesn’t take much to get outside of the city. Just in a few minutes, you’re there, and then you’re sort of in a beautiful tropical heaven through the rest of the main island of Tahiti so obviously a beautiful place. But there’s a lot to be explored. Many, many islands.
Chris Uriarte
And travelers typically move off the larger island of Tahiti and move to a smaller island, such as Mo’orea and Raiatea. And Bora Bora, of course, is a dream destination for a lot of folks. So not too uncommon to travel as I did to a number of different islands. And you get a lot of different experiences as you move throughout these different places.
Yvette Bohanan
That’s very cool. That’s very cool. And you’re a diver. So you’re obviously you’re in the water.
Chris Uriarte
I am, and in the water, whether you’re diving or swimming, or wading, or whatever, the water is as crystal clear as you could find anywhere in the world. So it’s quite incredible.
Yvette Bohanan
Fantastic. Okay. So that’s our setting. You get off the plane. You’re in Tahiti. And you need to pay for stuff, right? So tell me, how hard was it to start to adapt to local, did you adapt to local payment methods, and how hard or difficult was it to do that?
Chris Uriarte
Well, I think the challenge here when you’re in French Polynesia is a challenge that a lot of us face in different scenarios these days. Whether you’re an American citizen like myself, or coming from Europe. And that’s the fact that we live in a very card centric economy, of course. We’re used to using our cards, we’re used to using our digital wallets now from an everyday perspective in every setting. Large supermarkets, small merchants. It’s just ubiquity when it comes to card acceptance and digital wallets.
Chris Uriarte
But that’s really the difference in the French Polynesia. We see that cash is very, very widely used throughout the country, and cards are rarely accepted by smaller merchants. And the technology and the services that’s enabled so many small merchants in the US to accept cards just hasn’t been adopted there. And the small merchants who I spoke to tell me that they don’t really want to deal with the cost and the complexity associated with accepting cards. And I think it’s also important context to say that French Polynesia is really in no way a developing nation. It has excellent infrastructure, it has very good Internet and mobile connectivity. It’s got a strong inflow of money from its very hardy tourist economy, and it’s well funded from its home country back in France.
Chris Uriarte
So this isn’t an issue of not having technology or not having connectivity. I think, just at the end of the day, small merchants there – they still very much love cash.
Yvette Bohanan
Interesting, interesting. So when you were paying with cash and, we heard this, too, when we were talking with Nikhat on another episode, she was in Turkey, right? Istanbul, Cappadocia. She was mentioning that getting cash – did you just go to an ATM and pull some out?
Chris Uriarte
Yeah. So the banking network is strong there. You’ve got a presence of international banks that are there on the island. Local banks as well that are well connected. As I said, it’s a well connected country most definitely. So I just went to an ATM, pulled out French Polynesian francs, and was able to have some of those in in my wallet.
Chris Uriarte
But I think what is a bit surprising, maybe it’s not a huge surprise to those of us who have traveled to a lot of different Caribbean nations or other places, is that merchants of all sizes are really very happy to take most of anything that you have in your wallet especially if it’s French Polynesian francs, Euros, or US dollars. So while you can certainly go to an ATM and take out French Polynesian francs, they will very happily take US dollars or Euros in really any setting.
Chris Uriarte
So if you did happen to step off the plane from Los Angeles or San Francisco, and you had a lot of $20 bills in your pocket, you’re definitely not going to find any difficulty spending it. And most importantly, when you’re at the airport and you’re ready to jump in a taxi, the taxi drivers are more than happy to quote you a price in dollars and take American dollars, and I think that makes people a little nervous in most countries. Very often, you get told not to take flat fees from taxi drivers around the world. It’s usually a scary proposition where you think you’re going to get ripped off.
Chris Uriarte
But I think, to follow French Polynesia’s reputation for warmth and hospitality, I found that the rates that they were quoting me were pretty much right on with what the exchange rate was. So everybody was very happy to accommodate the dollars that I had in my pocket.
Yvette Bohanan
Right. Excellent. Okay, okay, Very good to know and so when you think about your interactions during your travels around the islands, and that, like you’re saying, they have a robust infrastructure, they have a robust economy, heavy on tourism, obviously. But then that’s going up and up. So we look across the payments landscape, and we see travelers all over the world expecting to do certain things in certain countries. Expecting to be able to use their digital wallet, expecting to be able to do whatever.
Yvette Bohanan
So where do you think this is headed when you look at this area of the world? What are one or two things that you’re going to be watching as you go into 2023, besides the next best place to go dive?
Chris Uriarte
There’s a few things to look at. And I think you make a very important point here. We are continuing to shift into more of a cashless society in our parts of the world, right? So it’s important for people who are traveling to these far off places to make sure that they’re acclimated with how people are paying so you’re not in for a surprise when you get there. And you know, maybe 10 years ago, we looked at having cash in your wallet as maybe even just a little inconvenience, right, of sometimes I’d have to go to the ATM, and I’d have to keep some cash around for those sort of edge cases where I would need to use cash.
Chris Uriarte
But these days, I think we are increasingly digitalized, and you can go weeks or months sometimes without using cash, whether it’s at home in the United States in big cities like I live in, or I travel often to London, and I don’t think I’ve taken cash out of an ATM in London in probably 2 or 3 years. I can easily go a week in London without ever using cash. So we get very used to that, right. So we need to make sure that if we are going to these different places around the world, we really understand how people are paying. So that’s the first thing that I would say.
Chris Uriarte
The other thing I would say is certainly the economy is shifting. We don’t know what’s going to happen over the course of the next year. We don’t know what’s happening in 2023. Are we going to hit a true global recession? What else is going on with interest rates and currency fluctuations and stuff?
Chris Uriarte
And as the economy continues to evolve, and we continue to see some of these major currency fluctuations globally, I think you’re going to see a lot more of these resort nations pricing more consistently in dollars and euros rather than their local currency, particularly when you’re looking at higher end resorts and restaurants and travel companies and activities and things along those lines.
Chris Uriarte
And this is good from an American and European tourist perspective when you’re looking from a price transparency point of view. But it also means that you’re not necessarily going to be getting any great deals when you go somewhere that has a weaker local currency.
Chris Uriarte
And a couple of hotels that I went to even had euro-denominated merchant accounts with separate credit card terminals. So this isn’t necessarily a new practice, I think we’ll be seeing more of this as the economy starts to shift. And euros and dollars are always relatively strong currencies, and small island nations, who really depend heavily on imports, certainly don’t mind bolstering up their US dollar and euro reserves.
Yvette Bohanan
Yeah. That’s fascinating. And that’s a pretty old practice to still see, it isn’t a new thing. It is pretty old to have separate terminals for merchant accounts, I’ve been in places where there’s 14 different terminals behind there, and they look at the card and decide which one they’re going to use.
Chris Uriarte
Well that’s absolutely the case and when you’re a payments geek like me, you pay attention to things like this. And I looked at one hotel and they had one terminal for Visa and Mastercard cards that were local cards that were going to be processed in in French Polynesian francs. They had a separate terminal for American Express cards. They had a separate terminal for Visa and Mastercard cards that would be processed in euros.
Chris Uriarte
So I guess the poor the poor lady behind the desk needs to be updated on sort of what their payment policy is there, and try to figure out how to do some manual routing, if you call it between, based on what they’re seeing
Yvette Bohanan
Human routing right there. So much for interoperability and single gateway APIs.
Yvette Bohanan
Oh, my goodness! Well, it’s good to hear that things are busy in French Polynesia and the economy is going strong.
Yvette Bohanan
Yeah, it’s kind of cool, especially coming out of the pandemic. And interesting that we hear so much about the jump in digital transactions in different locations, and here we see it’s not every location, right? There are exceptions in every generalization you read about in this industry. So it’s always good to know what’s really going on.
Chris Uriarte
Yeah, for sure.
Yvette Bohanan
Cool. Well, Chris, thank you so much for joining me on this episode of Fanning the Flames on Payments on Fire.
Yvette Bohanan
And to all of our listeners, thank you for listening in, and we look forward to next time. Until then stay safe, travel well, and do good work. Take care.
