By Rob Darby, head of travel sector relationship management at Tuxedo Money Solutions
Last week the Payments Council revealed that cashless payments have overtaken the use of notes and coins for the first time, with cash volumes expected to deplete by a further 30% in the next ten years.
This may come as no surprise to agents and TMCs who undoubtedly have noticed a mounting decrease in the numbers of holidaymakers taking cash abroad, as innovations in digital payments have offered favourable rates, unbeatable access and enhanced security.
What this latest trend in payments points to is that convenience has trumped cash as the new ‘king’ for consumers.
The travel industry’s ability to be agile and respond to consumer demand for convenience will be paramount to the health of agents’ revenue streams.
Not only are holidaymakers now more inclined to use plastic while abroad, they will also be more receptive to a one-stop-shop offering from travel agents.
With limited time on their hands, a business that can offer them both travel and currency solutions at the same time will tick a box for convenience and match consumer requirements.
The benefits to the agent of offering a prepaid currency card as part of the holiday transaction are three-fold; loyalty programmes can be enhanced or created, marketing intelligence is delivered on customers’ wider travel habits and customer revenue is maximised.
With margins on holidays becoming increasingly tight, agents are under pressure to maintain profitability and ancillary services such as this are the perfect way to enhance profits.
At Tuxedo Money Solutions, our partner-led solutions are developed with the distributing partner very much in mind, providing them with a tailored prepaid product, which not only provides an ancillary revenue stream but also integrates seamlessly with existing business practices or processes.
Most importantly for distributing partners, our prepaid programme provides a competitive commission model, designed to deliver significant income returns.
Offering a generous commission rate paid over the life of the card, irrespective of how the card is loaded, reflects our approach to building long term partnerships with agents and TMCs; offering them a simple and lucrative travel money solution.
So after years of being king for holidaymakers around the globe, why has cash fallen foul of the convenience of card payments?
From a holidaymaker’s point of view, security while abroad is paramount and cards simply offer more, not least because they can be cancelled with balance still intact. The option of second or companion cards means holiday funds can be transferred at the touch of a button.
Even in the face of disaster, the convenient way in which travellers can access protected funds is unbeatable when compared to the headache that lost or stolen notes can cause.
Returning back to the UK is no different. Gone are the days of exchanging small amounts of foreign currency at a steep ‘buy-back’ rate.
With prepaid currency cards, travellers can simply spend their unused money in the UK or keep their card balance as it is; a virtual piggy bank for the next trip abroad. What could be more convenient than that?
We may not be seeing a cashless revolution, but we have seen an evolution and TMCs stand to benefit should they get on board.