Our biannual Travel Money Survey gives us a snapshot of an industry where change is happening, but many customers are still wedded to more traditional ways of taking money abroad.
In an era of apps, mobile banking and cross border cryptocurrencies, the travel money market remains a bastion of tradition. Customers who might otherwise shop and bank online still go into a branch to buy their travel money, and consequently brands with a high street presence dominate the travel currency market.
However, the market is changing, with more people choosing to use their debit and credit cards when spending money abroad, and increased use of payment methods such as prepaid cards. Younger people are particularly likely to use these new methods, suggesting that the market as a whole may be due a major shake up.
Despite the obvious security issues when travelling with cash, 94 per cent of respondents took cash abroad for their last trip, while six per cent still relied on traveller’s cheques. The prepaid card market is growing however with 14 per cent of people used prepaid cards this year, against eight per cent in last year’s survey.
The Post Office still tops the tables for customers buying travel money. It has the highest brand awareness for travel money, and was the most popular choice for buying currency and prepaid cards amongst respondents.
Sainsbury’s Bank, Tesco Bank and M&S Bank are the next most popular providers, while none of the new ‘challenger’ brands such as Monzo and Revolut make it into the top ten for brand awareness or use.
Six banks appear in the top ten brands that customers know provide travel money, but only two (Tesco Bank and M&S Bank) managed over 10% spontaneous awareness as a cash provider. Only three banks appear in the list of the top ten providers used, with the ‘traditional’ banks notably absent. Closure of high street branches, perception of expense or mistrust of banks post the credit crisis could all be reasons why banks are not widely used for buying travel money, or it could be that consumers just see travel money as a retail purchase rather than a banking transaction.
While respondents to our survey believe that the rate they get when exchanging money is important, their choices reveal that convenience is the prime motivation. The convenient location of branches from which to pick up travel money was rated the most important reason to choose a provider, though many said the rate was important too. Only 18 per cent of people use a price comparison site to check they are getting a good deal.
Most holiday currency is bought face-to-face or ordered online and then collected, rather than delivered, suggesting that many people still see buying currency as part of the holiday preparations, rather like buying sun tan lotion.
While newer entrants to the travel money market are still far below older players in terms of both awareness and use, they are showing signs of moving up the charts. Both WeSwap and Revolut, for example, achieved one per cent spontaneous awareness for providing prepaid currency cards, ahead of Moneycorp and on a par with Asda.
Consumer Intelligence’s biannual travel money survey reveals a detailed picture of the UK travel money market. Our last survey involved 1,096 online interviews in October 2017. Here are some highlights.
75% of travel money transactions are conducted between April and September. Over 80% of consumers buy their currency in advance but 43% of consumers will buy it in last few weeks before they travel. And when they do buy, 54% of consumers accept the first deal they are offered.
So given these market dynamics, how can you best protect and grow your market share during this crucial trading period?
Andy has over 20 years’ experience within the financial services sector and has worked predominantly within the FX, Wholesale bank notes and pre-paid industries.
In previous roles Andy has managed key relationships with many of the leading Financial institutions including Commerzbank, Credit Suisse, American Express, RBS and Travelex.
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