Demand strong for multi-currency cards, foreign currencies, as holiday fever rages

UNDETERRED by rising inflation and sky-high airline ticket prices, leisure travellers have taken to the skies with a vengeance – but not without making ample preparations for their foreign currency expenditure needs.

Highlighting an uptick in card orders in recent months, multi-currency card provider Wise, formerly known as TransferWise, observed a 60 per cent increase in per-user transactions for the period from late April to May 2022 versus pre-Covid levels in February 2020.

“This shows us that Singapore users are becoming more comfortable with contactless and digital payment methods when travelling abroad, as well as the rise in travel around the world picking up again,” Surendra Chaplot, Wise’s global head of product (cards and Wise platform), told The Business Times (BT).

The Wise multi-currency card enables users to convert local currency into more than 50 different currencies at mid-market rates. The card functions as a debit card, to pay for goods and services, as well as an ATM card to withdraw funds overseas.

“Consumers in Singapore and Asia are increasingly on the lookout for better, cheaper and more convenient solutions when they travel. After all, exchange rate markups and foreign transaction fees can add up significantly when paying with traditional cards,” Chaplot added.

While the company estimates it takes 3 to 5 business days to acquire a physical Wise card, consumers may also apply for a digital card through the Wise mobile app with the option to add the card to Apple or Google Pay for digital contactless payments.  

Another multi-currency payments provider, YouTrip, said the latest surge in demand for its physical cards has resulted in a longer estimated waiting time for its customers to anywhere from between 2 and 4 weeks over June this year, versus the typical 1-week waiting time.

Issued by EZ-link, YouTrip’s mobile wallet comes linked with a prepaid Mastercard and allows travellers to pay in some 150 currencies at wholesale exchange rates with no transaction fees or foreign exchange markup. The mobile app also allows for the exchange and storage of 10 selected currencies.

Kelvin Lam, YouTrip chief operating officer, also flagged supply chain issues. This comes amid the global microchip shortage, which has affected the production of NFC (near field communication) chips used in credit and debit cards.

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“We have ramped up our resources to accelerate the card creation process, and aim to have the cards delivered to our users (more promptly) starting July,” said Lam.

Digital banking platform Revolut claims to have seen a twofold increase in active Revolut card users within Singapore since the city state’s borders reopened in April, with travel-related spending amounts exceeding pre-Covid levels.

Speaking to BT, a Revolut spokesperson said the surge in applications and usage was driven by the addition of new users, as well as existing users spending more on travel. 

Despite the rising popularity of digital and multi-currency payment options, brick-and-mortar forex dealers in Singapore are also seeing especially brisk business.  

An on-site visit by The Business Times to The Arcade at Raffles Place found several currencies marked as “no stock” by various money changers by the end of the lunch hour – the Thai baht, Cambodian riel, Myanmar kyat, Malaysian ringgit and South Korean won, among them.

Mohd Sikkandar of money-changing services company Crescent Exchange told BT that it has become commonplace for at least 1 currency at the Raffles Place store to be sold out by 2pm on a daily basis, ahead of the store’s 6pm closing time.

While Sikkandar said the ringgit, baht and won were among the most in-demand, the employee also underscored the Japanese yen’s popularity due to its “good rate” and the re-opening of Japan’s borders to travellers.   

Jeremiah Wong, senior marketing communications manager at Chan Brothers Travel, told BT: “Leisure travel is recovering steadily ever since VTLs (vaccinated travel lanes) started and countries reopened around the world, with the removal of most, if not all travel or border restrictions.”

Wong noted an “exponential surge” in queries for the travel agency’s tour packages of late, but believes demand has yet to outstrip that of pre-pandemic times as destinations such as China and Taiwan remain off-limits to tourists.

European countries have regained their popularity among tourists with the reopening of international borders, said Wong, and Turkey has emerged as an attractive holiday option for its “unique east-meets-west charms and value-for-money appeal”.

He also highlighted Australia as a choice destination for families due to its relatively short distance from Singapore.

Other travel-related retail businesses have also reported a steady rise in sales figures as the global tourism industry begins to recover.

For Q1 ended March 31, 2022, Hong Kong-listed luggage company Samsonite International posted a 61.7 per cent increase in net sales – to US$573.6 million from US$354.7 million the year before – bringing its operating profit back into the black from the loss recorded the previous year.

Satish Peerubandi, vice president of Samsonite Southeast Asia, told BT the company had anticipated the recent months’ spike in demand for its luggage goods with the onset of post-Covid “revenge travel”.

“Our teams worked relentlessly and closely with our suppliers and factories to ensure we have ample inventories… As we had expected, the surge (in demand) was more significant than the market had forecasted and we were prepared for this,” said Peerubandi.