The Note and the Three Words Subtitle: Field notes on how hawala actually moves money, from someone who went and watched it happen

You Will Not Finish Your Tea

How hawala really works, told through two transfers I saw with my own eyes

Let me start with something that will annoy a lot of people.

Hawala happens in every country. Every single one. If someone tells you “oh, hawala doesn’t happen in Denmark,” or “hawala doesn’t happen in the United States, in Japan, in Switzerland,” I would like to hand that person a plaque of innocence and gently send them on their way. Because they have no idea what they are talking about.

Informal transfers are as old as society itself. As old as money. The Templars did it. The Chinese had flying money. In the subcontinent we had Hundi and hawala. None of this is new and none of it is going anywhere. It has run in parallel to the formal banking system from the very beginning, quietly, efficiently, and mostly invisibly.

I have spent years in and around this world. And I want to share two examples with you that I have actually seen in the field. Not read about. Not theorized about from behind a desk. Seen. Because this is the part most people get wrong: you cannot understand how money really moves by sitting in an office and drawing flowcharts. You have to go out there, gain people’s trust, and watch it happen.

So here are two of the most beautiful informal transfer methods I know. The first one will make you smile. The second one made my jaw drop, and I am not an easy man to impress.

Example One: The Note That Becomes a Key

Picture this. You are sitting in Dubai, or India, or Pakistan, or the Philippines, or South Africa. Doesn’t matter where. You want to send money to someone in another country. Let’s say the sender is in South Africa, and the person who needs the money is sitting in Paris.

Here is what happens.

The sender goes to his local hawaladar, his Hundi man, whatever you want to call him. And the hawaladar gives a strange instruction. He says: “Tell your recipient in Paris to take a five Euro note. Any five Euro note. And tell them to photograph it so that the serial number is clearly showing. Then tell them to keep that exact note on them. Don’t spend it. Don’t lose it. Just keep it.”

So the recipient in Paris pulls out a five Euro note, snaps a photo on WhatsApp where you can read the serial number, and sends it back up the chain. Recipient to sender. Sender to hawaladar.

Now the hawaladar in South Africa picks up the phone and calls his payout partner in Paris. Could be a small money exchange, could be a person. He sends them the photo of that five Euro note and says, “Pay out twenty five hundred dollars to whoever shows up with this exact note.”

The recipient walks into that payout point in Paris. And here is the part I love. The payout person does not ask for a name. He does not ask for ID. He will not say “show me your passport.” He says one thing: “Show me the note.”

The recipient hands over the five Euro note. The payout man looks at the serial number. He compares it to the photo the hawaladar sent him. Same serial number? Done. He keeps the note. He makes a receipt with a photocopy of that note printed on it, has the recipient sign it confirming they received twenty five hundred dollars, and hands them the cash. Then, almost as a courtesy, he gives the recipient some other random five Euro note back, because the original one he is keeping for his records.

Now sit with what just happened, because it is genuinely clever.

That five Euro note is a unique token. There is only one note on the planet with that serial number, and the only person who could possibly be holding it is the person who was supposed to receive the money. The photo links the sender, the hawaladar, and the recipient across three countries without a single name being exchanged. The signed receipt with the photocopy protects the payout partner. And the whole thing settles on trust and a serial number.

No KYC. No KYB. No ID check. No forms. Just a note.

And here is the thing that should really land: tens of thousands of these transfers happen every single day, and there is literally nothing any government can do to stop it. Nothing. You cannot ban people from carrying a five Euro note.

This is why I keep saying we are criminalizing the wrong thing. We treat informal transfer itself as the crime. It isn’t. The crime is dirty money, money from drugs and trafficking and fraud, and that money moves through formal banks too. Most of the people using these informal channels are people exactly like you and me. Ordinary people who simply do not want to spend half a day at a bank branch filling out twenty forms and then getting interrogated about where their SWIFT payment is and why it hasn’t landed and what the purpose of the transfer was. The inconvenience of the formal system is what created the gray market. And the gray market survives because it is fast, cheap, and it just works. That efficiency is the whole point.

Example Two: You Will Not Finish Your Tea

This one happened a couple of years ago and I am still not fully over it.

It took place between Lahore and Dubai. I want to be clear that this is not a Pakistan thing or a Dubai thing. This happens everywhere. I am just telling you the version I personally witnessed.

A friend of mine was staying at a hotel in Dubai and needed cash. So he called his brother back in Lahore and said, “I need five thousand dirhams, can you get it to me?”

The brother went to a particular spot in the market that he had been told about, a place that could supposedly transfer five thousand dirhams instantly. He arrived, sat down with an old man, and the old man asked, “Where is your brother?” The brother said, “He’s at such and such hotel in Dubai.” The old man nodded. “Which hotel?” He gave the name. “Okay. Have some tea. Sit down.”

The brother asked, “How long will this take?”

And the old man just smiled. Didn’t laugh. Just gave a knowing little smile and said:

“Son, you will not finish your tea, and your brother in Dubai will already have the money.”

The brother did not believe him. Honestly, neither did the brother sitting in Dubai who needed it. So the man in Lahore does a simple internal bank transfer, rupee account to rupee account, settling his side locally. And meanwhile in Dubai, six or seven minutes later, there is a knock on the hotel room door.

A person is standing there. In his hand, five thousand dirhams. And he says, “You have been given three words. Can I please have those three words?”

Sure enough, moments earlier, his brother in Lahore had sent him three completely random words on WhatsApp. The man at the door looks at the phone, reads the three words, takes a quick photo of them on his own phone as proof, and hands over the cash. Transaction complete. Tea barely touched.

For months I could not stop thinking about it. How? How is this possible? How is it this fast, this seamless, with no app, no platform, no settlement rail that anyone can see?

So I did what I always do. I went and dug into it. And here is what I found.

Hawaladars have a network everywhere, and in Dubai that network runs straight through the hotels. In every major hotel in Dubai, and I mean every single one, there is what you might call an accountant. In Urdu we call him a munshi. Different communities have different names for him, Tamil, Hindi, Bengali, Arabic, but the role is the same. This man is responsible for providing liquidity inside that hotel. He might be carrying fifty thousand dirhams in float at any given time.

When that transfer came in from Lahore, it was the munshi attached to that specific hotel who got the call. The instruction was simple: deliver five thousand dirhams to this room.

Now the munshi himself might work at the hotel. He could be a dishwasher. A floor manager. A cleaner. Someone in the guard room. Or he might not work there at all, in which case he just calls the hotel and arranges it. The genius is in the staff. One of the cooks, one of the cleaning ladies, is already carrying the munshi’s cash on them during their shift. She might have ten thousand dirhams on her on any given day. She peels off five thousand, slips out of her uniform, walks up to the room, knocks, asks for the three words, photographs them, hands over the cash, walks back to the changing room, puts her hotel uniform back on, and returns to work like nothing happened.

And it is not just the Pakistani munshi running this. The same staff will do it for the Filipino network, the Indonesian, the Indian, the Bangladeshi, the Nepali, the Sri Lankan, the Maldivian, the Egyptian, the Jordanian. Pick a community, there is a liquidity man, and there is staff carrying his cash. The network is so deep and so embedded that even the UAE government has not been able to dismantle it. They know it exists. I genuinely believe they let it exist, because how do you even begin to pull a thread like that?

Think about why this is so brilliant from a design point of view. When do you most urgently need cash abroad? Usually when you are stuck in a hotel in a foreign country. And that is exactly where the liquidity already is. Burj Al Arab, the Hyatt, the Marriott downtown, some random three star place near the airport, it does not matter. The accountant is present everywhere, and the cash is already walking the hallways inside someone’s apron.

What This Should Teach You

I did not learn either of these things from a report. I learned them by being in the field, earning trust, asking the right people, and paying attention. That is the only way you ever understand how money actually behaves, as opposed to how the textbooks say it should behave.

And the lesson underneath both stories is the same one I keep coming back to. These systems are not primitive. They are not backward. They are elegant solutions built by people who understood a real problem long before the fintech crowd showed up with a pitch deck. A five Euro note as a cryptographic key. A hotel cleaning lady as a payout terminal. Three random words as authentication. We sell these exact ideas back to people today wrapped in apps and call them innovation.

So the next time someone confidently tells you that hawala does not happen in their clean, well regulated corner of the world, just smile. Pour them some tea. And remember that somewhere, right now, a five Euro note is changing hands and a knock is coming at a hotel room door.

About Faisal Khan

Faisal Khan is the CEO of Faisal Khan LLC and has spent years working in the cross-border payments, banking, licensing, remittance, and fintech infrastructure space. His work focuses on helping companies navigate banking access, money transmission licensing, crypto infrastructure, compliance, payout corridors, and international financial operations.

He is also the founder of DealHarbor, a marketplace focused on regulated financial services opportunities, and MoneyWiki, a growing knowledge platform covering banking, payments, licensing, and financial systems globally.

https://faisalkhan.com https://dealharbor.app