Cashless Overseas Travel is on the Rise

Andrew Dawson, 35, and his wife Erin, 32, of Traverse, Michigan, ran into an unexpected problem during a recent trip to the UK. No matter how hard I tried, I couldn’t use the cash I had exchanged in the US. “I’ve traveled all over the country, including small towns, and even small pubs only accept cards,” he said. “Many of these establishments didn’t take cash at all,” said Dawson, marketing manager for Tentcraft, which makes custom tents and accessories. Towards the end of the trip, we had a nice meal at an Indian restaurant and tried to use the exchanged cash. But they said they don’t take cash anymore.” Finally, a London hotel accepts cash payments, so they don’t have to bring their money back and exchange it for dollars.

It was customary for Americans traveling abroad to exchange their local currency. Either at the bank or at the A.T.M. or money changer in that country. However, with the contactless payment trend accelerated by the pandemic, it is now possible to travel abroad without touching a physical currency or coin such as pounds, krone or euros.

Charuta Padinis, senior vice president at Focusrite, a research firm in the entertainment industry said, “The act of making payments by tapping with a card or phone will continue in the future,”.

Of course, the change to cashless travel did not start as a pandemic. Digital payment methods and mobile wallets are a long-term trend that has continued in Asia over the past decade and other regions over the past three years, said Michael Orlando, COO of Yapstone, a global payment company.

“But there’s no doubt that the pandemic has accelerated this trend,” said Matt Schultz, chief credit analyst at Lending Tree, an online lender. When the pandemic began, consumers began to order more things online and by phone. He pointed out, “I felt more comfortable handing over a card or using a QR code or mobile app rather than using cash.”

If you’re traveling abroad this summer for the first time since the pandemic, how do you know when you need cash next (tips and toilets) and when you don’t (shopping and restaurants), and how to optimize your credit and bank card and digital payment options?

Many businesses outside the US these days only accept contactless cards. “I put a chip in or swipe on a mobile card reader that the waiter brought,” Dawson said throughout the trip, “but every time I was told I had to ‘tap’.” Contactless technology has “became the de facto standard for almost a decade” outside the US, said Ben Sofitt, executive director of digital wealth management platform Unifimoney. According to Mastercard, half of its global transactions are now done contactless.

Check your card before heading overseas to ensure you have the contactless payment option.  If you are unsure, call your credit card company to find out before you travel. Make sure the card you carry doesn’t swell with foreign exchange transaction fees. Nick Iwen, director of Points Guy, a website dedicated to travel-related content, said Capital One VentureOne was a good choice.

If you’re asked if you want to pay in your national currency or in US dollars, say you want to pay in your local currency to avoid ‘heavy currency exchange fees’. Max Jones, owner of Change Travel, travel advisor and concierge agency at Virtuoso Network. has advised

You can use contactless cards to pay for bus and train fares in many places (including New York City). There is no need to pay extra or worry about how much to top up for a transit card. You also don’t have to struggle with confusing instructions at the kiosk. With the ease of contactless fares and the app’s instructions, you can use public transport as if you were a local.

Nicole Gustas, 51, marketing director for an insurance company, said while traveling to New Zealand and Australia, he was often embarrassed by merchants who refused to use his credit card because it was not a contactless card. To solve her problem, she installed her Google Pay on her own phone.

Once you scan the QR code using your phone’s camera, you can complete the payment using your digital wallet or by entering your card information.

Despite the widespread use of cashless payments, there may be cases in which cash is required. If you’re traveling in a big city like London, or if you’re on a group tour, there’s nothing wrong with relying solely on your card. However, if you are backpacking or use the small shops and small restaurants, there may be situations where you will need to spend some cash.

This situation differs slightly from country to country. Germany was the country with the most cash use before the pandemic. But even stores that previously accepted cash only are now displaying signs saying they prefer contactless payments. In contrast, Scandinavia, Australia and New Zealand have been “the most active card holders” over the past decade. Spain and France are being mixed, Jones said.

You may need cash when using your car. Some toll roads will not accept US debit or credit cards. You may also need coins for parking. Another case where cash is required is a tip. As a tip for people who clean your hotel room or lift your luggage, it’s a good idea to have around $100 in change, said Pauline Frommer, editor of the travel guide Frommer Guidebook and related websites.