The modern-day pocket guides

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Frequent travellers now enjoy on-the-spot information and payment methods

Smartphones have transformed the travel planning process by breaking down borders, but banks have been slow to catch up.

The arrival of the smartphone and global connectivity has transformed the way Australians plan travel – and when they plan it. Just as rolls of film gave way to Instagram and paper tickets to digital boarding passes, guidebooks have ceded space to websites, and maps to apps. Rather than research from books before departure, Australians reserve restaurants, tours and even hotels or Airbnbs on the fly – sometimes within minutes of arrival.

Yet, when it comes to finances, many Australians still travel the way they did decades ago. 91% change cash into local currency in advance; [1]87% have encountered issues using a credit card overseas[2]; and almost half don’t know the exchange rate that will be applied when they spend on their credit card abroad[3]. Savvy planning skills, it appears, do not necessarily translate into money management IQ.

"Now phones enable you to access the internet at your destination, and in theory some of those sources may have been updated just 30 minutes before you visit.”

Stuart McDonald runs Asia travel planning website Travelfish.org and has watched the planning process transform over the last few years. “Before the internet and before smartphones, you’d buy a traditional guidebook, and that would be a snapshot of the destination taken however many years previously: now phones enable you to access the internet at your destination, and in theory some of those sources may have been updated just 30 minutes before you visit,” he says.

Today, apps such as Hitlist help travellers define and share their bucket list, and deliver notifications when airfares drop to a level they won’t want to miss, helping shape when and where they travel. Organised travellers can fine-tune their holiday to the very last second with apps such as TripIt. Those who hate to plan can use Hotel Tonight to find last-minute discounted hotel deals in selected cities, or HeyLets to discover nearby events, festivals or restaurants.

Social media, McDonald noted, has not only shaped the way we experience travel but the way we plan it. “Previously, people would take a traditional guidebook and leave their phone at home, but this whole selfie thing means you’ve got to keep up with the Joneses,” he said. “Once you’re using Instagram, you start to use it as a discovery tool as well: you’re going to Lombok, you don’t know much about Lombok, so you look at what other people are doing on Lombok.”

Ground transport apps, from global titans such as Uber to local favourites such as South East Asia’s Go-Jek motorcycle taxi service or Europe’s mytaxi black cab app, vastly reduce friction for the traveller by eliminating both hailing and haggling, although their impacts on the local economy are often much less positive. Coupled with translation tools from Google Translate to Waygo, which reads menus and signage in Chinese, Japanese and Korean, international travel is easier and, often, cheaper than ever before.

Yet a few industry sectors still appear determined to extort the maximum possible profit from the traveller, such as traditional telecom companies, which bill hefty roaming charges and, often, daily usage fees as well. “I was talking to a friend who was using a plan by Google that was charging him $10 per gigabyte for data, which he thought was a very good deal,” McDonald says, noting that data would cost a fraction of that on a SIM in Indonesia, where his friend was visiting. “He said, ‘Yeah, but my US company would be charging me $10 per DAY.’”

Financial services companies, too, have historically treated travel as though it’s an egregious act to be punished with charges rather than a regular feature of people’s lives. For almost 20 years, PayPal has made moving money across borders close to frictionless, although, like conventional banks, it charges transactions fees and profits on the exchange rate. More recently, international banking and money transfer services from Payoneer and CurrencyFair to Transferwise and Xendpay have added to the competition in the sector. Bitcoin and other cryptocurrencies offer a much riskier and more complicated alternative, while a range of travel money cards cater to the traveller.

“But one thing you come back and you don’t like is seeing your bank statement, which has a whole line of fees that you paid for overseas transactions.”

Banks are far from unaware of the borderless trend. HSBC Australia recently launched the HSBC Everyday Global Account, which, like PayPal, enables Australians to receive, hold and spend money in multiple currencies, as well as converting between currencies. Unlike PayPal, the account comes with a card and functions just like a conventional bank account – but with no fees for overseas ATM transactions, or online or offline purchases.

“When you travel, whether it be on a short-term holiday overseas, or a longer-term journey, you come back with a lot of good memories,” says Paul Rossiter, the Head of Insights Marketing, Planning and Governance at HSBC Australia. “But one thing you come back and you don’t like is seeing your bank statement, which has a whole line of fees that you paid for overseas transactions.”

For Rossiter, the appeal of the product extends beyond the obvious audience of entrepreneurs, expats, freelancers and nomads who earn and spend money in multiple currencies. He cites the absence of overseas transactions fees, and the opportunity to change money into the desired currency before departure at a preferred exchange rate, as a big part of the appeal.

“Finally, the banking sector is catching up to the rest of the travel world,” Rossiter notes. “This is an account that allows customers to carry up to 10 different currencies around in their pocket, at no charge, in the form of a normal Visa debit card. It allows travellers to withdraw money at foreign ATMs and avoid being hit with a fee. It allows them to make foreign transactions for no extra cost. That’s a change people have been waiting for.”

Like tap-and-go in finance, or Instagram in travel, it seems a natural evolution. Perhaps, like paper tickets, fold-out maps and rolls of film, overseas transactions charges will soon become a thing of the past.

[1] YouGov Galaxy Research p. 5

[2] YouGov Galaxy Research p. 6

[3] 47% - YouGov Galaxy Research p. 6

This article was first published as a commercial feature on bbc.com (http://www.bbc.com/storyworks/capital/borderless-banking/smart-travel-planning) and was created by BBC StoryWorks, BBC Advertising’s commercial content division, on behalf of HSBC Bank Australia Limited.