We’re used to tapping or swiping a card when buying goods and services – anything from a cup of coffee to a new suitcase for our next vacation.
Mostly, paying by card seems natural and hassle-free, as it should be. There are times, however, where cash is still king. Foreign travel is often one of them.
Cash still matters
You won’t always want to pay by card abroad. You might not feel comfortable in some venues, or you may feel cautious about using a card multiple times in a day in a new city. In some cases, cards won’t be accepted, and cash is always useful for small transactions and tips.
Many a traveler has been caught out by not having enough local currency just when they need it. This and other currency exchange hazards are neatly recounted by Sebastian Powell in a recent article* on the Loyalty Lobby website.
Accessing cash abroad has its own challenges
A real concern is the cost of currency exchange when you need it at short notice. Conversion rates at exchange booths are notoriously poor and these can be magnified by additional fees. Sometimes it is possible to buy foreign currency in tourist hot spots only, where the cost of doing so is high.
Powell quotes losses from currency exchange typically in a range of 14% to 20%. In some locations costs are low (Thailand and Japan) but that’s rare. High charges are not limited to exchange bureaus – banks and hotels will often also take advantage, especially for relatively small amounts.
Stay ahead of the game
Part of the solution lies in doing your homework. You could do the research and find where it’s best to buy and sell currency in your chosen destination. However. even this strategy is imperfect: the cost is still likely to be high
It’s far better to go ready-prepared with the foreign currency cash already safely in your wallet.
This is also where US credit unions can improve their offerings to existing customers – and gain new ones too.
Get travel money before you go – with Money 4 Travel.
With Money 4 Travel, the consumer can book currency online from their smartphone, and collect it from a chosen branch. It’s easy and convenient and will be cheaper than buying currency on arrival.
For the credit union, this is cloud-based technology. It requires no expensive system upgrades, and is used easily from point of sale terminals. It’s automated, so it’s convenient for branch staff, who can be freed up for other customer-facing roles.
Money 4 Travel can play an important role in developing credit union digital infrastructure. It’s a straightforward and cost effective service that members will love – and thank you for when they’re on vacation.
By Bjorn Larsson, CEO at Essiell Ltd, the power behind Money 4 Travel. Essiell is a leading specialist in fintech solutions for retail travel money, financial control, information technology and data security, and compliance.