Despite recent geopolitical unrest and some lingering uncertainty around issues like Brexit, last year saw significant growth in the global travel sector with more than 1.4 billion people on the move internationally for the 12 months to December 2018, the highest number on record.
The numbers of people making an international departure grew by 7% exceeding expectations by some 2% (or more than 28 million people and journeys) with forecasts predicting continued growth into 2019 albeit at a slightly more conservative rate of 4%.
As the volume of people travelling internationally, for both business and pleasure, continues to increase with demand for a more tailored and sophisticated travel experience all but expected – so too does the need for safe, secure and convenient payment options.
The recent upsurge in the international use and acceptance of mobile wallets and contactless payments indicates that there are few corners of the world where electronic payment options are not growing faster than cash. Anti-corruption efforts by governments in cash-centric countries like India to move people towards a digital payments landscape (where every payment leaves a taxable trail) have also helped to bolster the uptake of electronic payments globally.
The rate of adoption of these kinds of electronic payment options, however, is not globally uniform with some key tourism destinations like Japan, still demonstrating an enduring preference for cash in order to make and receive payments.
In addition, recent outages by major credit and debit card issuers have resulted in a more measured approach being adopted by international travellers in their preparations, regularly opting to have a percentage of their currency available in cash as part of a balanced travel money portfolio.
Earlier this year, international acquirers and ATM operators, those that provide a viable alternative to the electronic payment behemoth, realised a significant victory when Visa, one of the world’s largest credit and debit card issuers rewrote its rules to facilitate Dynamic Currency Conversion or DCC at ATM’s worldwide.
Pioneered by Irish-International financial technology company Fexco, DCC allows cardholders to withdraw cash or to pay for goods or services in their home currency, a currency that is familiar to them and at a competitive exchange rate.
DCC also affords merchants, acquirers and ATM owners/operators an opportunity to realise an additional revenue stream while simultaneously providing a transparent and convenient payment option or access to foreign cash. When the cardholder accepts or selects the DCC transaction at the ATM, the ATM operator will process the transaction, replacing that usually conducted by the customer’s own bank and card issuer. The customer can withdraw the foreign currency with full visibility, in real time, of the total cost of the transaction in their home currency.
This shift by Visa, a company that connects over 2.6 million ATM locations with consumers carrying 3.2 billion Visa cards from over 11,000 financial institutions globally, will ultimately create a more competitive environment for customers shopping around for the best value on their foreign transactions. In addition, it brings the global issuing giant into line with competitors like MasterCard and Discover Diners who continue to facilitate DCC as an added-value service.
Fexco has been partnered with some of the world’s largest ATM operators, processors and IAD’s to deliver their world-class DCC@ATM solution since the launch of Fexco’s first ATM estate in Australia in 2013. Today, Fexco’s DCC@ATM solution is available across 3 continents in countries including Greece, Israel, Austria, Morocco, and the UAE with a number of new estates expected to go live across the United States, Romania, Philippines, Latvia and South Africa during 2019.
In May this year, Fexco successfully converted the first transactions based on Visa’s revised mandate and expansion of Visa international cards at ATM’s – increasing the revenue opportunity upwards of between 25 and 100%+ for our existing partners. This roll-out is set to continue during the month of June.
ATM owners, operators and acquirers wishing to leverage the increase in numbers of international travellers can seamlessly integrate Fexco’s DCC@ATM solution without any changes to their daily processes:
Fexco offers innovative payment solutions which allow your guests and customers the option to withdraw cash at the ATM while paying for it in their own currency with full disclosure of the exchange rate and margin.
For more information about our ATM solutions, please contact Shane McElroy.
Email: SMcElroy@fexco.com
