Cash on Demand: Online Currency Delivery Services Gain Popularity

Strategic Insights -

Travelers are increasingly relying on online services to purchase foreign currency for their trips abroad. Two major companies, Oanda and Chase Manhattan Bank, have launched online currency delivery services, allowing customers to order foreign currency in various denominations on the basis of orders placed through their websites. According to a study by American Express, people on the road in the United States carry an average of $500 in cash.

Key Takeaways:

  • Oanda, in partnership with Thomas Cook Global and Financial Services, offers overnight or second-day delivery of 100 foreign currencies on the basis of orders placed through www.oanda.com.
  • Chase Manhattan Bank's Currency to Go service allows holders of any MasterCard or Visa card to request delivery of currencies of 75 countries through www.currencytogo.com.
  • The average request for currency delivery through Oanda is $400, while Chase's average request is $600 to $650.
  • American Express study found that 42% of spending by vacationers not involving advance purchases was charged to a credit or debit card, 40% was in cash, and 18% in money taken from A.T.M.'s.
  • Sales of traveler's checks are shrinking, with worldwide sales dropping to $35 billion to $40 billion in 1999 from $50 billion in 1998.
  • Oanda's FXDelivery service requires a Visa or MasterCard credit or debit card, with a minimum purchase of $200 and a maximum of $1,500.
  • Chase's Currency to Go service also requires a Visa or MasterCard or a Chase checking or savings account, with a minimum purchase of $100 and a maximum of $1,000.
  • The delivery charge for Oanda's FXDelivery service is $12 for next-day delivery, $8 for second-day delivery, while Chase's delivery is free if more than $500 is requested, $10 otherwise.
  • A.T.M.'s can be avoided, eliminating the need to find one at the airport or stand in line at the bank.

Statistics:

  • Average cash carried by travelers in the United States: $500 (American Express study)
  • Average currency delivery request through Oanda: $400 (Timothy Kelly, Oanda chairman)
  • Average currency delivery request through Chase: $600 to $650 (Amy Friedlander, Chase Currency to Go product manager)
  • Worldwide sales of traveler's checks: $35 billion to $40 billion in 1999 (Robert A. Fader, Citicorp)
  • Sales of traveler's checks in 1998: $50 billion (Robert A. Fader, Citicorp)
  • Minimum purchase for Oanda's FXDelivery: $200
  • Maximum purchase for Oanda's FXDelivery: $1,500
  • Minimum purchase for Chase's Currency to Go: $100
  • Maximum purchase for Chase's Currency to Go: $1,000
  • Delivery charge for Oanda's FXDelivery: $12 (next-day delivery), $8 (second-day delivery)
  • Delivery charge for Chase's Currency to Go: free if more than $500 is requested, $10 otherwise

Sources:

  • American Express study
  • Oanda-Thomas Cook partnership announcement
  • Chase Manhattan Bank Currency to Go service launch announcement
  • American Express company website
  • Oanda company website
  • Chase Manhattan Bank company website