Foreign exchange company Travelex has launched a wholesale banknote business in the Middle East.
The new operation, announced Tuesday (Feb. 28), comes amid continued consumer demand for travel, which is in turn driving continued use of cash.
According to a news release provided to PYMNTS, Travelex has already “onboarded a wide range of retail bank and non-bank customers across the region,” with plans to expand its client base across Europe, the Middle East/North Africa region, and Asia this year.
“Underpinning this growth is Travelex’s ability to leverage its international vault network and distribute banknotes across the globe, with the Middle East WBN business already undertaking shipments to and from Malaysia, Hong Kong, the UK and the Gulf region,” the release said.
Speaking to PYMNTS last month, Travelex CEO Richard Wazacz asserted that cash use is not going away, despite the digitization of retail banking and its declining use in developing markets.
“The existential threat that DVDs faced from Netflix and Kodak [from digital cameras] isn’t going to happen to cash anywhere in the same way or anytime soon,” Wazacz said.
In fact, he cited the amount of cash that’s needed to support people’s travel needs, whether to tip their waitresses or bellhops or cover taxi fares, as a reason why cash volumes won’t reach their peak for many years to come.
In addition, travel is the time when people are most uneasy about having to rely on digital payment solutions, Wazacz added, further backing up his belief that cash for travel has a long way to go before it vanishes.
“Cross-border international travel is the place where cash usage will decline last, because whilst you might be confident in [the digital payment solutions in] your own country, you can’t be sure yet whether [those] systems and methods will work elsewhere,” he explained.
Meanwhile, PYMNTS noted last week that travel remains one of the few bright spots in an ocean of bad economic news.
Granted, the term “travel” is rather broad here, covering both the type of trips that would require the types of services Travelex provides, as well as a Sunday drive with a trip to a drive-thru.
Evidence for this trend can be found in recent earnings reports from online travel agencies (OTAs) Booking Holdings and Expedia Group — which together command a huge segment of travel booking activity.
Booking Holdings CEO Glenn Fogel said last week that “for the first time, we saw room nights across all of our major regions above 2019 levels for the quarter,” adding that the company’s fourth-quarter activity led to “an all-time high” of nearly 900 million room nights booked on its platforms for during 2022, a 52% increase from a year ago.
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