Is the world of travel now cashless or should I withdraw foreign currency before travelling?

Has anybody ever seen a traveller’s cheque this side of the millennium?

Perhaps as a travel writer I should give a knowing nod of nostalgia to these relics of tours past, but I couldn’t really tell you what one looks like.

Any benefit they gave has been replicated and improved by plastic cards and digitisation. RIP.

The way we travel and handle foreign currency has changed dramatically and I’ve begun to think that – post-Covid – the bureau de change kiosks, that tourist town mainstay where you always get terrible exchange rates for local currency, could be going the same way of the traveller’s cheque.

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They’re an endangered species confined to fewer and fewer locations surviving off a diet of mainly uninformed or lazy holidaymakers.

Obviously sorting your foreign spending money is still worth planning, but Covid has accelerated changes in this area that were already underway.

The push to not only be cashless, but also contactless is well underway in many countries and gained momentum as a form of hygienic shopping.

My mother-in-law made a mad escape from New Zealand ahead of the Delta lockdowns, and on her way passed by a string of empty foreign exchange terminals and struggled to get hold of a prepaid currency card. She ended up at an ATM in central London withdrawing pound sterling notes that many masked-up cashiers (particularly restaurants, cafés and street vendors) wouldn’t take.

As I mentioned last week, airlines were some of the first to insist on switching to contactless card payments for any purchases onboard. Now, unable to get hold of a prepaid currency card, had Sharlene Christensen been feeling peckish or wanted duty-free goodies onboard and busted out a standard paywave-enabled eftpos card, the bank would have slapped on either a small fee as well as a not-great exchange rate on each and every transaction.

Although Kiwibank and Qantas withdrew their products from the New Zealand market when international travel dried up, other products from Air New Zealand, Westpac, and Mastercard are still in use. These will still ping you with fees and below market rate foreign currency conversions, only at a different stage of the transactions, so you can lock in relatively favourable exchange rates in the lead-up to your vacation.

The UK financial tech company Wise (formerly Transfer Wise) had launched a multi-currency account for Kiwis in 2019 and its card did survive the pandemic. It offers – in my experience – better exchange rates when moving currencies into different ‘pots’ which you can withdraw or spend by debit card in other countries.

Hopefully other fintech companies join the party Down Under and inject more competition into this area.

So, assuming you can use card payments for everything from your morning coffee, to site entrance tickets, to taxis and market stalls, which countries are the most embracing of the cash-free contactless traveller?

Data from the World Bank and the payment transaction companies from earlier this year named Canada, Singapore, Hong Kong, New Zealand and Japan as the top five ‘most cashless’ economies (in a good way).

Next were Australia, Norway, the UAE, Switzerland and Finland. The Swedes, Danes and Dutch are also embracing the move to cash-free, while fast-developing countries like China have recently again increased the spending limit per purchase.

Security of contactless remains a concern and a traveller’s ability to be internet-connected in order to block missing cards or lost phones is perhaps a reason why sole reliance on apps like Apple Pay or Google Pay is foolhardy.

A lost card could rack up dozens of swipes of not-insignificant amounts before it is blocked. And although the uptake of contactless is huge and growing in parts of Europe, North America and East Asia and closer to home, huge swathes of the world still live by the “Cash Is King” mantra.

Cards and contactless add an extra layer of hazard when tipping and bartering abroad and remain a non-starter at many a souk or must-visit local island taverna.

Yes you could have a week-long holiday in Europe without ever touching cold hard cash as a collection of apps and prepayment methods slowly encroach the travel industry.

However, an arsenal of payment methods remains the best method for now – there’s nothing like having cold hard notes to sort a local taxi in an Uber-less foreign airport at 2am.

What do you do when travelling overseas? Let us know in the comments