TD Bank Study Finds Travelers Setting Budgets, Could Use Mobile Payments

We all know that travel depends very heavily on having sufficient disposable cash to actually go places and support yourself once you get to these places. In fact, according to a study that TD Bank recently sent our way, the typical budget for a family of three traveling is $5,800. That study also illustrated one key point that mobile payments could address, and in some cases already has.

The issue in question: currency conversion. While most Americans make and stick to a budget—95 percent make one, 81 percent mean it—a lot of travelers find unexpected hiccups in that budget. For instance, 37 percent of travelers aren’t factoring in foreign currency transaction fees, while 35 percent left no consideration for credit and debit fees.

The exchanges aren’t done in advance all that much, either; 40 percent wait until they’re actually in the destination country to do their exchanges, and 73 percent will convert that currency back to US dollars upon their return home. This isn’t universal, however; young travelers in particular—75 percent—will monitor foreign exchange rates before traveling to try and get the best deal. Indeed, 51 percent of younger travelers also noted that they select destinations based on currency exchange rates.

Easily one of the biggest take-aways from this study is how much value mobile payments can deliver when it comes to traveling, especially in other countries. We’ve already seen Alipay and WeChat Pay take extensive advantage of this notion, offering the growing Chinese tourist class a way to access their mobile payments systems while traveling in other countries and cutting out the need to do a lot of currency exchanges. We’ve also seen the potential that cryptocurrencies can offer in a case like this; cross-border payments—which is a good way of saying “payments you make in a completely different country from your own—are perhaps the leading use case of cryptocurrency right now, with market speculation and criminal enterprise facilitation not far behind.

If consumers were using mobile payments systems to travel, it could be a comparatively simple matter to stage automatic, on-the-fly currency exchanges without consumers having to get their hands dirty in the exchange rate shuffle. Still, it’s clear that these rates and these practices are a part of consumers’ travel decisions.