WEALTH MANAGEMENT


IBS Journal July 2018


21


A millennial match made in heaven


Millennials love travelling as much as they like fintech, and while the increasing number of lines or regulation are making it easier for people to deal in different currencies, it’s really technology that is pulling all the weight for the consumer


I


f there is one area that is ripe for the fintech sector to explore, it’s travel. Following the colossal boom of the tourism and travel industries across the world, it is of no surprise that


many fintechs are reaping the fruits of bridging the gap between currencies, regulations and payment services with more affordable and convenient services.


Neo-banks like Monzo and Starling capitalised on the millennial wanderlust by offering Mastercard rates for all customers in all European countries from the get-go. The marketplace, which has become virally popular in the aftermath of PSD2 and Open Banking, promises to add further features to enhance the customer’s financial life, including travel-related services such as travel insurance, rental options and so on. However, these banks have proven slow in the addition of these features in their marketplaces, and since these do not represent a priority in the long list of prospective features, it is doubtful we will see them in the next year.


When it comes to bridging the gap between the traveller’s domestic currency and the foreign one, Revolut is undoubtedly one of the spearheads in this area by popularity, becoming a rising star in the UK, France, Poland and Germany. The company has seen such success that it is already making its slow shift to becoming a bank. Its business model has been the opposite to the one that UK challenger banks have experienced: features first and becoming a bank second. It already offers travel insurance from £1/day, FX options and other services, long before it becomes a fully-fledged bank.


In a conversation with a Revolut spokesman, IBS Journal discovered that these features go beyond financial applications: “With our travel insurance, you can cover your back in case of delayed flights or lost baggage. But not only that. Say you go skiing – the app turns on geolocation while you’re on the piste, and turns it off once you get home.” Revolut uses both physical and virtual cards, the latter becoming increasingly useful when purchasing goods abroad, as an alternative to physical and permanent ones.


Curve and Transferwise are some other UK companies that surely


come to mind when one thinks internationally. The first one unifies all your cards in one through the app, and the second one is a digital remittance service. These names have been a long standing house by now in the UK fintech ecosystem. Just like we’re seeing in domestic markets, where interactions between apps and features are being streamlined, international payments and services are making efforts to reduce costs and enhance convenience.


Some clear examples include sites that allow customers to book travel and accommodation. Sites such as lastminute.com act as the middle point between a customer and the airline, facilitating payment in the customer’s own currency. Similarly, Payoo is an interesting platform that facilitates bill payment by acting as an intermediary. You link your bank account from back home, and Payoo allows you to access payment channels in Vienamese utility companies.


Lastly, there are many other ventures that are expanding the possibilities in which the travel industry allows customers to go through with their payments. For example, travel booking company Expedia partnered with Affirm in 2016 to allow payments in instalments. Some other companies with similar services are Uplift, Flyr and Fomotravel.


www.ibsintelligence.com


Artem Bali/Unsplash


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