Forex

It's more about service than commission 

EVER-tightening
commission structures
and growing competition
from the online arena
have left travel agencies
seeking ways to earn more.
Buying and selling foreign
currency to travelling clients
is an avenue of additional
commission but all the more
valuable as a service extra.
Jaco Brits, sales executive
for Inter Africa Bureau De
Change, says: “Obviously
the travel agent gets
commission, which means
extra money for them at the
end of the month.” But it’s
not all about money, in his
view.
He says on small orders
the commission percentage
is not that high – bigger
transactions are more
profitable. However, the
value of offering forex
solutions to the client should
not be underestimated as
a value-add. “The client
can get all their travel
needs at one place, tickets,
accommodation vouchers,
insurance and their forex,”
he says.
Lydia Norval, travel
director for SA Reynolds
Travel Centre, sees selling
forex as advantageous from
a service perspective, as
the commission on forex
is usually not more than
0,5%. Corporate clients, in
particular, appreciate having
their order delivered to their
offices, doing away with
queuing at the bank. Leisure
clients usually collect their
forex in the travel agency
at the same time as their
documentation.
Selling forex, however,
can be tricky, and requires
some expertise. Over the
past few years, currencies
have been on a rollercoaster
ride with record-breaking
highs and lows. The value
of currencies goes up and
down every day, making it
hard to please customers
with correct quotes. Jaco
advises: “Forex changes the
whole time, so don't give
your client an exact quote
until you have the invoice.”
Inter Africa recently launched
an online system for travel
agents, enabling them to
order forex online, with
quotes remaining valid for
three hours.
Although formal training is
not a prerequisite for selling
forex, travel agents need to
be clued up on the different
options. Jaco recommends
inviting a representative from
a forex provider to come into
agencies to familiarise travel
agents with the products
and the procedures. He says
customers rely on travel
agents to advise on the
best products for different
countries. He advises agents
to know their products
well and phone their forex
providers if in doubt.
Lydia concurs that training
on forex procedures will go
a long way to help the travel
agent offer this service.
Travel agents need to know
about currency cards and
the procedures for taking
cash in order to give the
client the best guidance.
Points that need to be made
to clients, for example,
include that using a credit
card to purchase currency
attracts interest rates if
the funds are not in that
account; and that when
selling currency back, the
rate used will be different
to that when the forex was
bought.
Agencies also need to
make sure they have the
right documentation. Jaco
says FICA rules dictate that
agents must obtain the
client’s e-ticket, the copy
of passport and proof of
address.
Safety can represent an
issue when dealing with
large amounts of forex. Jaco
says: “If the travel agency
wants the client’s money
delivered to their offices
and not to the client directly,
they need to be very careful
about who knows that they
will be receiving forex. It’s
always a safety risk when
there is hard cash involved.”

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Did you know! 

Bitcoin are gaining ground in the travel world 

THE digital Bitcoin currency
is steadily gaining ground
in the travel industry
worldwide, with an
increasing number of travel
agencies and airlines
accepting the digital
currency as payment.
The use of Bitcoins
enables transactions
without the need for a
central bank or authority.
The currency’s value
depends on people’s
confidence; at the time of
going to print, one Bitcoin
was worth R5 044. From a
user perspective, Bitcoins
are pretty much like cash for
the Internet.
Expedia has begun
accepting Bitcoins for hotel
reservations, becoming the
first major travel company
to accept payments in
cryptocurrency. “Bitcoin is
a great example of how
Expedia is investing early in
an array of payment options
to give our customers and
partners more choice in
the ways they interact with
us,” the company said in a
press release announcing
the move.
Latvian airline airBaltic
and Lithuanian airline Air
Lituanica also now accept
Bitcoin payments.