Despite the digitization of retail banking, cash will not be disappearing anytime soon.
That’s the opinion of Richard Wazacz, Global CEO at foreign exchange company Travelex, who told PYMNTS that the future of cash in retail foreign exchange is secure despite its declining usage across 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 an interview.
In fact, he pointed to the amount of cash that’s required to support people’s travel needs, whether to pay tips or cover taxi fares, as a reason why cash volumes won’t be peaking for many years to come.
Moreover, travel is the time when people are most nervous about relying on their digital payment solutions, Wazacz added, further supporting his stance that cash for travel has a long way to go before it disappears.
“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.
He, however, argued for a balance between digital and cash payments, noting that while the foreign exchange company has been very much dominated by cash, they intend to increase efforts to promote their digital solutions, such as the prepaid currency card on which customers can load a currency of their choice for their travel expenses abroad.
“Our role now [is] to provide [customers with the right] mix of cash and digital so that they have the security but also the convenience of both forms of payment,” he said.
In some ways, companies like Travelex that were founded decades ago are considered legacy technology now. But while the firm is proud to be a “heritage brand,” changes are underway to modernize its digital infrastructure, procedures and products.
This includes investing in new tech-driven products such as ATM click and collect, self-serve kiosks, as well as promoting a more entrepreneurial, nimble mentality to develop and pilot more products.
This strategy to embrace digital innovation comes back to Travelex’s unique selling point, the convenience factor, which according to Wazacz, is even more crucial today, given how customers engage with money. “Money is still a very sensitive matter. It’s still something that a lot of customers in general are very nervous about.”
To help calm their nerves, the foreign exchange brand recently announced a partnership with U.S. online travel agency Kayak this month to offer customers a one-stop proposition as part of efforts to streamline digital-first travel.
As part of the deal, “customers can now search for flights, stays and rental cars within the refreshed Travelex Money app, enabling them to plan their trip and manage their funds for it, all in one place,” the company said in a statement.
Kayak will also leverage the Travelex’s distribution footprint — 1,300 stores servicing 38 million customers in 2019, per Wazacz — to help customers access travel services around the world.
And working with “partners [like Kayak] who value our product and we can push products and our services down their distribution” are the type of win-win deals that he said will be a key focus moving forward.
In the end, Wazacz opined that technology is all about adopting an omnichannel approach and giving customers more choices to interact with providers of services on their own terms.
This means having counters with agents who can deal with complex questions around obscure or less-used currencies or installing self-serve kiosks and multicurrency ATMs that allow customers to access more common or frequently used currencies.
As he said, “You have to be flexible and use technology to empathize with how different consumers and customers want to engage with us.”
Looking ahead, he expressed optimism for the future of travel despite the inflationary pressures, geopolitical issues and the cost-of-living crises in certain markets.
In fact, he said the company is already benchmarking itself against 2019 levels less than a year out of the pandemic, a strong indication of better days ahead.
And when asked about his industry predictions a year from now, he said, “We will see the whole travel industry and all the areas that support travel feeling much more confident [after] having had two good peak seasons behind them. I think that will start to encourage more investment back into the sector.”
For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More