Table of Contents
Executive Summary
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- The market
- Value of overseas spending expected to increase
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- Figure 1: Forecast for annual spending abroad by UK residents, 2008-18
- Market factors
- Overseas visits increased in 2013
- Companies, brands and innovations
- Brand promotion
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- Figure 2: Top 4 advertisers of travel money services (including foreign currency pre-paid cards), 2013/14
- Who’s innovating?
- The consumer
- Travel and holiday trends
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- Figure 3: Holiday and travel trends, March 2014
- Methods of spending abroad
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- Figure 4: Methods of spending while abroad, March 2014
- Ways of arranging and collecting foreign currency
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- Figure 5: Ways of arranging foreign currency, March 2014
- Attitudes towards using payment cards abroad
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- Figure 6: Attitudes towards using payment cards abroad, March 2014
- Attitudes towards pre-paid cards
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- Figure 7: Attitudes towards pre-paid cards, March 2014
- Attitudes towards travel money and spending abroad
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- Figure 8: Attitudes towards travel money and spending abroad, March 2014
- What we think
Issues and Insights
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- Pre-paid card providers need to re-educate consumers to dispel the myths
- The facts
- The implications
- A strong brand is important to travel money success
- The facts
- The implications
- Mobile and tablet apps have the potential for growth
- The facts
- The implications
Trend Application
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- Offering flexible rewards and taking the hassle out of purchasing pre-paid card
- Promoting the security of using a pre-paid cards over taking cash
- Pre-paid cards could become popular amongst the youngest generation of travellers
Market Drivers
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- Key points
- Trips abroad are yet to recover from the recession
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- Figure 9: The number of overseas visits by UK residents, by purpose of visit, 2006-13
- Europe remains the most popular destination for consumers
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- Figure 10: Number of overseas visits by UK residents, by region visited, 2006-12
- Increased consumer confidence will drive growth in the holiday market
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- Figure 11: GfK NOP Consumer Confidence Index -UK, January 2007-December 2013
- The Pound strengthens against the Dollar and euro
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- Figure 12: Spot exchange rates, US Dollar, and euro into Pounds Sterling, March 2009-March 2014
- All-inclusive holidays present a challenge to travel money providers
- The long-term shifts toward independent holidays restarts
- MEPs have voted to scrap mobile roaming fees in the EU
Who’s Innovating?
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- Key points
- AmEx links up with TripAdvisor
- Thomas Cook launches interactive Holiday Budget Calculator
- TUI launches Digital Assistant to help customers plan their trip
Market Size and Forecast
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- Key points
- Consumers are beginning to spend more whilst on holiday
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- Figure 13: Annual expenditure on overseas trips by UK residents, at current prices, 2007-13
- Holiday spending increases for the second successive year
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- Figure 14: Annual expenditure on overseas trips by UK residents, by purpose of visit, 2006-13
- Visits to Europe generate the largest amount of spending
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- Figure 15: Annual expenditure on overseas trips by UK residents, by region of visit, 2006-13
- Value of debit card expenditure abroad exceeds credit cards for the first time
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- Figure 16: Volume and value of credit and debit cards purchases outside the UK, by type, 2004-12
- Value of overseas spending expect to continue to rise
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- Figure 17: Forecast for Annual expenditure on overseas trips by UK residents, 2008-18
- Figure 18: Annual expenditure on overseas trips by UK residents, at current and constant prices, 2008-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Post Office leads the way for foreign currency exchange
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- Figure 19: Ways of arranging foreign currency, March 2014
- Largest retail banks promote currency exchange over debit card use
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- Figure 20: Main current account provider, June 2013
- Credit cards look to beat the completion from debit cards
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- Figure 21: Top six credit card and charge card providers in the UK, by share of customers, July 2013
Companies and Products
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- American Express
- Company description
- Product range
- Key data
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- Figure 22: Key financial data for American Express Payment Services Ltd, 2011-12
- Recent activity
- Marketing and promotion
- Barclays/Barclaycard
- Company description
- Product range
- Key data
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- Figure 23: Key financial data for Barclays Group, 2012-13
- Recent activity
- Marketing and promotion
- Caxton FX
- Company description
- Product range
- Key data
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- Figure 24: Key financial data for Caxton FX, 2011-12
- Recent activity
- Marketing and promotion
- FairFX
- Company description
- Product range
- Key data
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- Figure 25: Key financial data for FairFX, 2012-13
- Recent activity
- Marketing and promotion
- M&S Bank
- Company description
- Product range
- Key data
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- Figure 26: Key financial data for Marks & Spencer UK, 2012-13
- Recent activity
- Marketing and promotion
- Post Office
- Company description
- Product range
- Key data
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- Figure 27: Key financial data for Post Office Ltd, 2012-13
- Recent activity
- Marketing and promotion
- Thomas Cook
- Company description
- Product range
- Key data
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- Figure 28: Key financial data for Thomas Cook Group Plc 2012-13
- Recent activity
- Marketing and promotion
- Travelex
- Company description
- Product range
- Key data
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- Figure 29: Key financial data for Travelex UK Ltd, 2011-12
- Recent activity
- Marketing and promotion
- TUI Travel
- Company description
- Product range
- Key data
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- Figure 30: Financial performance of TUI Travel Plc, 2012-13
- Recent activity
- Marketing and promotion
Brand Communication and Promotion
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- Key points
- Adspend on travel money services increases in line with trips abroad
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- Figure 31: Adspend on travel money services (including foreign currency pre-paid cards), 2011/12-2013/14
- The Post Office’s travel money expenditure pays off with high usage
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- Figure 32: Top 10 advertisers of travel money services (including foreign currency pre-paid cards), 2011/12-2013/14
- Press leads the way in travel money adspend
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- Figure 33: Adspend on travel money services (including foreign currency pre-paid cards), by media type, 2011/12-2013/14
- A note about adspend
Travel and Holiday Trends
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- Key points
- The majority of consumers have taken a holiday abroad in the past year
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- Figure 34: Holiday and travel trends, March 2014
- European destinations continue to lead the way
- Financial situation affects travel habits
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- Figure 35: Holiday and travel trends, by financial situation, March 2014
- Under-35s are more likely to travel abroad
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- Figure 36: Holiday and travel trends, by age, March 2014
- Cosmopolitan Londoners are more likely to have travelled to Europe
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- Figure 37: Holiday and travel trends, by region, March 2014
Methods of Spending Abroad
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- Key points
- Almost three quarters of travellers used payment cards abroad in the last year
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- Figure 38: Types of travel money used, March 2014
- Travellers cheques decrease in popularity could benefit pre-paid cards
- Under-35s are more comfortable using debit cards abroad
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- Figure 39: Types of travel money used, by demographics, March 2014
- There is no relationship between age and use of pre-paid cards
- Travellers to Europe are more likely to have used foreign currency
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- Figure 40: Types of travel money used, by Holiday and travel trends, March 2014
Ways of Arranging and Collecting Foreign Currency
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- Key points
- The Post Office remains the most popular way for consumers to arrange foreign currency
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- Figure 41: Ways of arranging foreign currency, March 2014
- Few consumers exchange their money at airports
- Most consumers arranged their currency in the UK
- Most people prefer to order and collect currency in person
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- Figure 42: Ways of collecting foreign currency, March 2014
- Retail presence helps to improve use of in branch foreign currency services
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- Figure 43: Ways of collecting foreign currency, by ways of arranging foreign currency, March 2014
- Almost half of consumers used an ATM to arrange travel money at their holiday destination
- Travellers outside Europe more likely to use online ordering methods
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- Figure 44: Ways of collecting foreign currency, by holiday and travel trends, March 2014
Attitudes towards Using Payment Cards Abroad
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- Key points
- Payment cards give 55% of consumers a feeling of security
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- Figure 45: Attitudes towards using payment cards abroad, March 2014
- Older consumers are more likely to monitor their spending using a payment card
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- Figure 46: Attitudes towards using payment cards abroad, by age and working status, March 2014
- A fear of running out of money could be holding back use of pre-paid cards
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- Figure 47: Attitudes towards using payment cards abroad, by types of payment card used, March 2014
- Three out of ten consumers who have used payment cards abroad feel the charges are too high
Attitudes towards Pre-paid Cards
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- Key points
- A recognisable brand is important to encourage consumers to use pre-paid cards
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- Figure 48: Attitudes towards pre-paid cards, March 2014
- Providers need to change consumers’ perceptions of pre-paid cards
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- Figure 49: Attitudes towards pre-paid cards, by age, March 2014
- Security and budgeting are the main attractions of using pre-paid cards
- Younger consumers are most worried that pre-paid cards will not be accepted
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- Figure 50: Attitudes towards pre-paid cards, by age, March 2014
- The potential demand for pre-paid cards is high
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- Figure 51: Attitudes towards pre-paid cards, by age, March 2014
General Attitudes towards Travel Money and Spending Abroad
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- Key points
- A third of consumers prefer to be more relaxed when spending abroad
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- Figure 52: Attitudes towards travel money and spending abroad, March 2014
- Almost half of consumers save up before going on holiday
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- Figure 53: Responses to the statement: ‘I tend to save up my spending money before I travel on holiday abroad’, by methods of spending abroad, March 2014
- Online tools likely to help consumers to keep track of what they are spending
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- Figure 54: Attitudes towards spending abroad, by age, March 2014
- Only 15% of consumers who use cards are surprised by charges
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- Figure 55: Travel money attitudes of consumers who have used specific payment methods, March 2014
- A third use a price comparison site to find the best rates for foreign currency
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- Figure 56: Responses to the statement: ‘I look for the best exchange rate for my cash by using an online comparison site’, by ways of arranging foreign currency, March 2014
Appendix – Market Size and Forecast
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- Figure 57: Best and worst case forecast for total value of annual spending abroad by UK residents, 2013-2018
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Appendix – Travel and Holiday Trends
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- Figure 58: Holiday and travel trends, by demographics, March 2014
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Appendix – Methods of Spending Abroad
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- Figure 59: Types of travel money used, by demographics, March 2014
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Appendix – Ways of Arranging and Collecting Foreign Currency
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- Figure 60: Most popular ways of arranging foreign currency, by demographics, March 2014
- Figure 61: Next most popular ways of arranging foreign currency, by demographics, March 2014
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- Figure 62: Ways of arranging foreign currency, by demographics, March 2014
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Appendix – Attitudes towards Using Payment Cards Abroad
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- Figure 63: Most popular attitudes towards using payment cards abroad, by demographics, March 2014
- Figure 64: Next most popular attitudes towards using payment cards abroad, by demographics, March 2014
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Appendix – Attitudes towards Pre-paid Cards
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- Figure 65: Agreement with the statement ‘I would only take out a pre-paid travel card from a well-known brand’, by demographics, March 2014
- Figure 66: Agreement with the statement ‘I’m concerned about the charges incurred on these cards’, by demographics, March 2014
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- Figure 67: Agreement with the statement ‘Using a pre-paid travel card would give me a feeling of security when spending abroad’, by demographics, March 2014
- Figure 68: Agreement with the statement ‘A pre-paid travel card would help me to stay on budget whilst abroad’, by demographics, March 2014
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- Figure 69: Agreement with the statement ‘I would be worried that the card would not be accepted when paying for goods and services abroad’, by demographics, March 2014
- Figure 70: Agreement with the statement ‘I am interested in using a pre-paid travel card in the future’, by demographics, March 2014
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- Figure 71: Agreement with the statement ‘I think arranging a pre-paid travel card would be a lot of hassle’, by demographics, March 2014
- Figure 72: Agreement with the statement ‘I have never heard of a pre-paid travel card before now’, by demographics, March 2014
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Appendix – Attitudes towards Travel Money
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- Figure 73: Attitudes towards travel money and spending abroad, by demographics, March 2014
- Figure 74: Attitudes towards travel money and spending abroad (continued), by demographics, March 2014
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