Money Services for Travelers

In October 2022, Prosegur CashMoney in physical form such as banknotes and coins. More acquired a majority stake in ChangeGroup, the third-largest foreign exchangeThe Eurosystem comprises the European Central Bank and the national central banks of those countries that have adopted the euro. More retailer in the world. Founded in 1991, ChangeGroup has served over 50 million customers and operates over 100 bureaux de changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More and 300 ATMs in 37 cities worldwide.

• The deal was “a significant milestone in the transformation of our operations and in the constant diversification of our services. With this takeover we want to contribute our know-how in a new segment that is recovering quickly after the pandemic,” said Ignacio Cea, Global Director of New Business at Prosegur Cash.
• “From now on, our customers –especially airport customers – will have a strong and financially stable partner, with the necessary resources to offer first-class services in the long-term and on a global scale,” said Sacha Zackariya, CEO and co-founder of ChangeGroup.

What Is the Role of Cash in International Tourism?

Sacha Zackariya, CEO of ChangeGroup and author of Leading Travel and Tourism Retail. How Businesses Can Sustainably Capture New Profits in Shopping Tourists (London: Kogan Page, 2023) argues that cash is vital in international tourism.

The demand for cash as travel moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More has increased after the Covid-19 pandemic despite the growth in digital payments since “no one wants to be stranded without some cash in their wallet. No one wants to fall victim to cyber theft and online viruses when they have just managed to dodge real viruses” (Zackariya 2023: 2).

Why Do International Tourists and Retailers Prefer Cash?

In February 2022, most Britons reported preferring to use cash on their last vacation abroad and plan to use cash on their next international vacation, according to an online survey for the Mintel 2022 Travel Money Report (see Graph 1). In his book, Zackariya says that tourists like to carry and pay with cash due to

“poor paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More infrastructure in their home or destination country, or they may prefer the anonymity of cash. Using cash also lessens the chances of credit cards being  cloned, and the danger of identity theft. Many also prefer to hold cash to make quick purchases and for tipping […] Cash provides a degree of certainty in unsettling times; it works even if there is a power cut or cyber hack, which is reassuring for travellers”  (Zackariya 2023: 87).

Graph 1. United Kingdom: Outbound Tourists’ Payment Preferences, February 2022

Note: Poll respondents = 857 internet users aged 18+ who have taken an overseas holiday in the past three years (blue) and 1,010 who plan to travel abroad within the next three years (orange). Source: CashEssentials, based on Kantar Profiles/Mintel, February 2022, for Mintel 2022 Travel Money Report in Zackariya (2023: 87). Used with permission.

In addition, service providers such as restaurants and shops prefer accepting cash “so that they don’t have to pay expensive card-processing fees and wait several days to be paid.” (Zackariya 2023: 87).

Service workers worldwide appreciate cash tips. Employees accrue taxes and card fees when customers pay gratuities with cards and often receive funds with substantial delays.

• “There might be some places where tips are very much appreciated, where you can only do it in cash, so it’s important to have small bills for the maid in your hotel room or somebody who helps you with your luggage,” said Pauline Frommer, the editorial director for Frommer guidebooks.

Can I Still Carry Cash Abroad?

Last summer, the New York Times reported that some U.S. vacationers had difficulties paying with cash in Europe as service providers embraced digital payments.

• “We traveled all around [England], including many small towns […], and even the tiniest of pubs took cards. Many wouldn’t even accept cash,” said Andrew Dodson, 35, who ended up paying his London hotel bill with cash.
• “I’ve had the same 10 euroThe name of the European single currency adopted by the European Council at the meeting held in Madrid on 15-16 December 1995. See ECU. More in my purse for weeks,” said Julene English, 62, a retiree traveling with her husband in Italy, France, and Great Britain.

Many customers, fed up with debit and credit cards’ foreign transaction fees, have signed up for multicurrency accounts offered by newcomers such as Revolut and Wise. However, users must remember that these services charge fees for currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More exchange and ATM withdrawals beyond certain limits.

Businesses: Refuse Cash at Your Peril

“So make sure you accept cash! Don’t be fooled into thinking cashless payments will make you richer. All you are doing is denying yourself the ability to make a sale!” (Zackariya 2023: 3).

Zackariya recommends retailers accept cash and digital payments, as most foreign tourists carry cash and are more willing to spend these funds abroad: “Having cash in their wallet encourages customers to spend it in surrounding shops immediately” (Zackariya 2023: 53).

To restore London’s place as an attractive international destination, Zackariya hopes that the U.K. government reinstates tax-free shopping for foreign visitors to get cash refunds for their value-added tax (VAT) on their shopping.

Cash Helps Retailers Sell More

To encourage tourists to spend money, retailers should

• Accept cash “no matter what the banks or card-processing companies want you to do” (Zackariya 2023: 92).
• Promote “ATMs and currency exchange companies to open near your locations, so you benefit from having customers with disposable cash in their pockets to use on impulse purchases” (Zackariya 2023: 92).
• Accept cards from several payment networks, including Visa, Mastercard, Japan’s JCB, China’s AliPay, and Union Pay (Zackariya 2023: 91).
• Accept and pay cash “if and when banking or payment systems go down next” (Zackariya 2023: 217).

Tourism and Cash Industry Voices

The book includes conversations with leaders in tourism and cash managementManagement and control of cash in circulation. More services to illustrate the importance of cash in the sector and contemporary societies at large:

• “We refund the tourist either in cash or to their credit/debit card or mobile wallet, either in town with our partners […] or at the airport after validation,” said Jacques Stern, CEO of Global Blue, the world’s largest tax refund company (Zackariya 2023: 43).
• “Travellers prefer to carry cash for […] better control on spending, […] credit card fees […] and the rising fraud happening in digital payments systems, mainly in international trips,” said José Antonio Lasanta Luri, CEO of Prosegur Cash (Zackariya 2023: 89).

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