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But is it…Is it Completely Crazy to Wire Money to Local Guides?


Behind the Scenes: Okay, so my trip to Russia that I write about in the below article was a complete bust. I wanted to do a repeat of Lost in Moscow and lead a group of Canadian youths to the former USSR to go to summer camp. It never got off the ground. Orlyonok (oh, look, there I am in Wiki) the camp I went to in 1977 still exists, but is expensive, especially as they don’t allow short stays but want to trap their victims for a month or more. I contacted guide after guide in Russia and was told nobody would want to lead my group in the summer because guides wouldn’t want to leave Moscow – huh? I finally found the Russian travel company mentioned in the article. And their managing guide arranged a great trip. But then a problem happened when it came down to transferring money. He wanted me to collect the money from my Canadian trip partners (the parents of the students). I reminded him that I’m a writer, not a tour operator. So finally he said they could wire money individually, but it wasn’t to a Russian bank, and was to be sent to a money trading business in the UK. I put on my spy glasses and did a Google Earth search. The business was in a house in a shabby (by my standards) residential area. It might have been fine – but when I was told that there would be NO wiring fees or fees of any kind – it made me nervous. I hit my big red imaginary abort button. If it had been just me, I’d have gone for it. But risking other people’s money was out of the question. Plus my imagination lead me to all sorts of crazy scenarios, including the Russian mob and money laundering, and an Interpol investigation. Am I allowed to say that – I did qualify it by using the words “my imagination”?

Published in winter of 2009 in Kirsten’s column in Leap Local’s Travel News Publication, (UK print edition and International digital version) But is it… Completely Crazy to Wire Money to Local Guides? By Kirsten Koza 

Here I go again – it goes against common sense – am I seriously going to wire money from my Canadian bank account to guides in Russia?
My brother has been considering joining me on my trip. I told Shawn we had to wire our payment because www.ecotours-russia.com can’t take credit cards. Shawn asked, “How do you know the guides will show up?” I babbled and closed my argument by saying I’d done this before, and the guides always showed. Shawn said ominously, “You’re just lucky.”
Paying local guides is problematic. They usually can’t accept plastic. If you require them to arrange a long trip, they need advance finances. You might have to SWIFT money to a personal bank account.
I’m also in an awkward situation because I invite strangers and friends on my travels – it isn’t just my money I’m risking. Then there are the seemingly arbitrary, exorbitant bank fees. Russia brings back the unease of my first wiring experience.
I went to Scotiabank in my hometown and paid a $60 fee to SWIFT a deposit to the personal bank account of my Romanian mountain bike guide, Horia. For two weeks Horia emailed to say my 300 Euro had not arrived.

Daily, for two weeks, I stood in line at Scotiabank to find out why. It was the Canadian bank’s fault. Finally the slow SWIFT deposited in Horia’s account, but was short funds – that was the Romanian bank. Horia graciously ate the loss. This happened again with my Peruvian guide.

I went to the Bank of Montreal and it only cost me $25 to SWIFT $708 to Saul’s personal bank account. He received $660. His bank skimmed 6.8%. Saul graciously swallowed the loss. Both Horia and Saul now use PayPal.

I visited PayPal’s website to see if it might be a solution for guides worldwide. On PayPal’s site there are flags from around the world showing what countries they do business in – lots of flags can send money, not so many can receive. It won’t work for Russia. However, customers get to use their credit cards at their own computers and PayPal’s fee is only 1.9-2.9%, but which? And who pays – customer, merchant or both? PayPal’s website didn’t answer my questions. I contacted customer service. Leo, their jolly rep responded next-day with website directions on how to find the flags. He didn’t answer my questions. Then Leo sent me a survey to see if I loved his service.
So I contacted some PayPal merchant-users, Hamish MacDonald, a Scottish writer, and Horia my Romanian guide. Hamish isn’t sure when 1.9-2.9% applies and Horia is always charged the max. They both pay this fee, not their clients. Even though Horia says it has been great – I note some pretty serious drawbacks. Horia is only allowed to withdraw a maximum of 500 Euro a day, and it costs him $2 each time. If Horia has ten people coming for a tour, it could take him a month to retrieve his money.
There are other payment services. Moneybookers is available in fewer countries than PayPal. EmerchantPay has a 10% catch, maybe because they cater to gambling and porn. My bank suggested posting a certified cheque. That’s cheaper for the tourist, but will it even get where it’s going? Not all postal systems are created equal.
Leap Local is currently working on solutions for paying local guides. I’ve only scratched the surface of the issue because some local guides don’t even have bank accounts. I’ve never had a problem with the guides that I’ve wired money to, but I do lots of research beforehand.