Seesawing among different payment methods is expected, given the overwhelming variety of alternatives, the mayhem of exchanging currency into another currency at the airport, or the annoyance of having to pay colossal fees to your card’s issuer. Add the stress of activating and deactivating the NFC feature, handling different wealth-storage methods like physical or digital wallets, and opening new card accounts. You’re in for one of the most chaotic pre-travel preparations you could have.
They say that the better prepared and vigilant you are, the lower the chances of messing it up at the scene, and they couldn’t probably be more correct than this. Suppose you’ve planned to use your cryptocurrency to pay for accommodation or plane tickets since surprisingly, many services and items are actually payable in digital money in nowadays’ travel and tourism. Then, constantly monitoring the Ethereum price would work to your advantage when you want to seize the best deal, just like keeping tabs on varying prices on different services would.
So, let’s clear the air by laying our cards on the table and examining the main pros and cons of the predominant payment methods of the year, projected to maintain prevalence well into 2024.
Remittance services
Remittances rank among the primary income sources, though the amounts differ from country to country. Take the example of El Salvador, which relies heavily on money received from above. The nation’s total remittance inflow rose 3.4% from 2021 to 2022, at about $6.9 billion last year. It, thus, makes sense for those involved in transfers within or to El Salvador to seek fee-friendly money transfers. In this situation, cryptocurrency is among the best allies, given the lack of involvement from the bank or other third parties that would charge astronomical fees. Nevertheless, in the absence of digital currency or when using it is unfeasible, remittance transfers prove more advantageous than any alternative payment method.
These services work as simply as ABC. You’ll convert any amount of your money into a chosen foreign currency, regardless of how far or close overseas the recipient card is, and then send the amount to yourself or another receiver. Thus, you eliminate the need to visit a physical building to remit currency traditionally. Instead, you only set up an account with a chosen service provider on an app or online and do the job in the blink of an eye.
The disadvantage of remittance services
Like many other money transfer services, there is a downside, and with remittance banks, this is manifested in the form of fees. The two types of expenses you’ll usually incur are imposed to conduct the transaction, ranging from 1% to 5% as a rule of thumb under the remittance bank’s terms and conditions. The other fee that might be withdrawn from you serves as a margin of the exchange rate, consequently varying from 1% to 5%. The exchange rate naturally oscillates a lot, so expect to encounter an unspecific amount regardless of the number of times you conduct a similar transaction.
International debit cards
The terminology of this service is self-explanatory, emphasizing the original purpose behind the international debit cards’ creation. As indicated, these services are intended to facilitate the transport of money outside the country’s borders so you can easily make payments for whatever purchase or booking, such as shopping, transportation, or plane tickets. This card can be used in stores’ cashless payments or at the ATM for withdrawal purposes and is set to secure its high spot among the heavyweights thanks to the comfort of mind given by the lack of hefty fees such as forex charges. Relying solely on this card means you’ll strengthen your chances of remaining within your budget and avoid the burdensome foreign exchange commissions that are otherwise incurred.
The downside of international debit cards
On the other hand, as you would’ve expected, there are several drawbacks to using international debit cards. For instance, you’re bound to incur debit transaction fees from foreign exchanges unbeknownst to you.
Not every restaurant you come across processes transactions in foreign currencies, thus drawing some fees from your service provider. The fee typically falls within the 1%-3% range, and since you’re dealing with a percentage, it’s wise to calculate the total cost beforehand if you’re going to pay for a festive meal in order to reduce unwanted costs.
Cryptocurrency
There are more than 425.000 crypto investors worldwide, and the numbers are not excluded to rise, given how mainstream payments in digital currency have become. Over 15,000 businesses are registered to offer products and services in digital currency, showing a strong preference for the perks brought by this innovative payment solution. Lower fees due to the lack of bank processing of transfers, wider accessibility since all an intended payer needs are an internet connection and an easily settable digital wallet, and a slight understanding of currency conversions and crypto platform usage. Cryptocurrency is often used to enable pseudonymous transactions, meaning that even if a transfer is naturally recorded on a digital ledger and stored there forever, sensitive details of the user are unknown to the public eye. The sender’s name is represented in characters; only the IP remains accessible.
Furthermore, you’ll likely encounter a Bitcoin ATM in almost any city you visit. There are more than 39,000 Bitcoin ATMs worldwide, encompassing two types. You’ll probably meet an ATM where you can purchase and sell your digital currency and another one where you can only invest in Bitcoin.
The drawbacks of cryptocurrency
The advantages are numerous, but it’s worth mentioning the unavoidable inconveniences this payment method involves, too. The cryptocurrency market is inherently volatile, translating to valuations that fluctuate dramatically in seconds. Furthermore, it’s best to be equipped with some know-how before using digital currency and the afferent wallets. For security reasons, the best way to store virtual wealth is through private keys in physical, offline “cold wallets.” However, the online ones are just as widespread due to their intuitive and smooth CX offered by most online service providers.
Closing thoughts
These three payment methods are expected to hold sway in 2024, too, since they took over the payment stage this year. Other methods that you can resort to, should the ones presented above be anything but your piece of cake, are prepaid travel cards and traveler’s cheques. So, what payment method seems the most suitable for your trip next year?
