Travel in Morocco - and the downsides of cash

Remembering what it feels like to use notes and coins again

It's rare that I ever use cash these days. In London, there's just no need. Many shops are now cashless. (In fact, the only time I've used cash in the UK in the past year was in Cardiff last August when taking a taxi, which was cash only.)

There is an ongoing discussion in many countries regarding cash - should the use of cash be protected? Should a business be able to say "card only" or "QR code only"? Card only signs can be seen at businesses in many European cities. Some companies in China only support QR code based payments. Partly, this discussion is about social inclusion, individual privacy, and the right to choose. I'm not taking sides in this debate. But it's interesting to look at the experience of travelling in a country where cash is king. How does it impact daily life?

Marrakech

When I travelled to Morocco last month, based on what I'd read, I expected to use a lot more cash than I used to. I landed in Marrakech at night and took a taxi that had been pre-ordered via the Booking.com app, so I didn't need any cash to get to my Riad.

A Moroccan Riad, but this wasn’t the one I stayed in. Mine was a bit more basic than this but still great. Photo by rigel on Unsplash

A Riad is like a hotel but with some differences. It's a distinctly Moroccan style, mostly found in Marrakech. Riads feature a central courtyard area surrounded by guest rooms. Breakfast is served in the central communal space, and it's cosy, with most Riads featuring only 10-20 rooms or even less.

The swimming pool that you'll see in most photos of Riads was added in the past couple of decades for the aesthetic of Western tourists. Originally, there was no swimming pool. Riads are large homes of wealthy Moroccan families that were converted to tourist accommodation. They became especially popular as Morocco's popularity as a holiday destination rose in the 2000s and 2010s.

The staff in my Riad confirmed that outside of paying for hotels and in large stores, Morroco is very much a cash economy. After a good night's sleep, we ventured into the streets of Marrakech. After getting to the old town area of Marrakech, it was time to find a cash machine - the British term for an ATM.

Upon finding an ATM, I experienced the first downside of a cash economy. Once you find an ATM, there will often be a long queue of people waiting. You have no choice but to join the line and hope that by the time it's your turn, the ATM will have enough cash. You might have to wait in a queue for 10 minutes, or 30 minutes, or even more. You have no choice. Sure, you can try another ATM nearby - if there is one - but the situation may be the same. 

Then there's ATM fees. Using a bank such as Monzo or Revolut can avoid ATM fees being charged by your card issuing bank (up to a specific limit). But you can't avoid an ATM machine charging a fee or giving a poor exchange rate. If you stay in a country for a long time, you can learn which ATMs offer the best rates and lowest fees. As a tourist, you often don't have time to learn these nuances.

Casablanca

After a few enjoyable days in Marrakech, we took a train to Casablanca. We spent a couple of days exploring a city, which despite being several times bigger than Marrakech, attracts far fewer tourists. It's very much a commercial hub. That said, there are a few things worth seeing, such as great food and the impressive Hassan II Mosque. A guided tour runs most days from the central office near the museum, and even for non-Muslims, it's worth a visit. Times may vary, so check beforehand if you plan to go there. The Mosque is relatively new - finished in 1993 - and has a total capacity of 105,000 (25,000 inside and another 80,000 on the Mosque's ground). It's mainly during Ramadan that the Mosque will be at peak capacity, and on a guided tour, you can learn a lot more about the history and workings of the Mosque.

A delicious lunch at Chez Michel in Casablanca - Author’s photo

One day, in one of Casablanca's modern shopping malls, I experienced a second downside of cash. No one wants large bills for a small purchase. For example, in a mall, we purchased a slice of cake at a cafe, which cost 18 Moroccan Dirhams (approx $1.80). The only bill I had on me was for 100 Dirhams (Approximately $10). The staff made it clear that they wanted to avoid receiving a 100 Dirham bill. They only wanted a 20 Dirham bill. 

This is understandable in many ways. Small bills are more useful for change, and if almost everyone is paying with cash, then small coins and notes of low value will be required for change. Paying with large bills will use up lots of small denominations in change. Not being able to give change may lead to frustrated customers and lost sales.

After checking in pockets and wallets, we confirmed we didn't have any smaller bills, and the staff kindly let us pay with the 100 Dirham note. From then on, we learned to keep various bills of different values on us at all times to make things easier. If our 100 Dirham note were rejected in Morocco Mall - the biggest shopping centre in all of Africa - then small bills would be essential for more local places.

Rabat

Hotels are one of the places where you can usually pay with card, no matter where in the world you are. Checking out my hotel in Casablanca was no exception. However, the hotel's payment terminal declined my card several times. In fact, the hotel tried two different payment terminals, both of which failed. When I tried paying with Apple Pay rather than with my physical card - it worked first time. With Apple Pay, the payment terminal just needs the NFC capability to work rather than reading the chip on the card. 

At the train station, there was a long zigzagging line of customers waiting to pay for their tickets. The line was for the three staffed desks, and additionally, there were two unattended ticket machines. We tried to buy our tickets to Rabat at the unattended ticket machine, but the machines kept crashing, or the payment process didn't initiate at all. In societies that rely on cash, cashless payment infrastructure may not be well maintained. 

A local man, having the same challenge as us, became frustrated as he would miss his train if he had to join the 30-person line for the staffed desks. We were in the same boat and made our train with just seconds to spare after waiting in the queue. We paid for our tickets in cash, of course. 

Rabat, looking very sunny in January - Author’s photo

It's worth visiting Rabat. The souks are calmer than Marrakech, and some great local restaurants are tucked away down the side streets of the old town. Away from the souks, the resting place of one of Morocco's revered Kings, the Mausoleum of Mohamed V, is interesting to see. Inside, you can find fantastic zellij covering the walls - Moroccan mosaic tiles. A craft passed down generations, and they give the place a unique ambience.

Market Structure

From my travels, it was clear that Morocco is very much a cash-based economy. Are there any structural or competitive factors key to this prevalence of cash?

For many decades, just one company provided card-acquiring services in Morocco. If a business wanted to accept card payments, they had to utilise CMI. Various banks own CMI, and the monopoly meant that fees to accept cards were consistently high, with 3-4% being the norm. In the past decade, CMI has faced new competition from providers such as Al-Barid Bank - which operates across the national Post Office network. Yet, at this time, for card payment processing, CMI is estimated to have approximately %95 market share. A report prepared for USAID noted that:

[The] lack of effective competition in the market has resulted in a risk-averse culture in this area, with a focus on currently profitable merchant categories. The new acquirers lack the scale and investments to diversify into new categories and compete for the same merchants as CMI.

The central bank of Morocco (Bank Al-Maghrib), is focused on growing cashless payments as a share of the economy. Mobile money is vital to this - more so than card payments. Many Moroccans live and work overseas and send money to family back home, but many residents lack a formal bank account. Mobile money solutions can be linked to an app or phone number for ease of use.

Some stores at the train stations allow for contactless payments. Here Carte Bancaire stands for bank card in general, as opposed to the French domestic payment method of the same name.

Mobile money solutions such as Wafacash, a subsidiary of Attijariwafa Bank, provide various money transfer solutions. Wafacash can handle international transfers, payments to businesses, as well as micro-credit transactions. Mobile money solutions are registered under Morocco's Payment Institution (PI) regime, of which circa 25 companies are now operating. The PI regime is enshrined in the 2015 Banking Law. A tiered set of KYC requirements means that only a mobile phone is needed for payment values up to $200; above this amount, ID checks are required.

It will be interesting to return to Morocco in a few years to see how the cashless payments market evolves. Actually, more than anything, I'll be happy to eat delicious authentic Couscous and drink a Moroccan mint tea once again!

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