SINGAPORE: As the year-end travel season approaches in Singapore, more and more travellers are turning to multi-currency e-wallets for convenience and better exchange rates compared to traditional banks and moneychangers.
Three popular choices in the Lion City are Revolut, Wise, and YouTrip, as reported by Channel News Asia. Each multi-currency e-wallet offers unique features and services.
Revolut, Wise, and YouTrip
Revolut, Wise, and YouTrip operate by allowing users to hold various currencies in their e-wallets. The user can exchange currencies at the app’s displayed rates, storing both currencies in the same wallet. While Wise can handle 40 currencies, Revolut and YouTrip support 33 and 10 currencies, respectively, but users can transact in over 150 currencies instantly.
All three platforms adhere to the Monetary Authority of Singapore (MAS) wallet limit of S$5,000, which is set to increase to S$20,000 by the end of the year. Users can send money to friends, withdraw cash from overseas ATMs, and, in the case of Wise and Revolut, transfer funds to a bank account.
Exchange Rates
The appeal of these e-wallets lies in their ability to offer competitive exchange rates. YouTrip CEO Caecilia Chu highlighted the improvement in their rates over the years, which is linked to higher transaction volumes.
Ashley Thomas, head of strategy and operations at Revolut Singapore, emphasised the platform’s efficiency, resulting in cost savings reflected in lower fees for users.
“They have (a) leaner setup than traditional banks. Hence, their cost of operations is lower,” said Tan Kiang Khiang, course chair of diploma in banking and finance at Singapore Polytechnic.
Dr Wang Xin, an assistant professor from Nanyang Technological University, noted that offering favourable rates is part of a marketing strategy for these apps, which earn revenue from merchants and investments rather than currency exchange fees.
Comparison to Local Banks
While local banks offer multi-currency accounts, they often fall short in providing competitive exchange rates. Even though banks can access wholesale currency markets, their higher overhead and diverse business interests may hinder their ability to negotiate rates effectively.
Lee Yen Teik, senior lecturer of finance from the National University of Singapore, stated, “While banks can also access these (wholesale currency) markets, their higher overhead and diverse business interests may hinder their ability to negotiate favourable rates as effectively.”
Experts acknowledge that banks may offer slightly more security than e-wallets, but the distinction is minimal. Cybersecurity risks are inherent in digital services, and consumers are advised to practice cyber hygiene. Mr Tan suggests, “If you were to use these money-changing apps and put money into the e-wallets, make sure that it is only enough for the purpose and do not over-commit and leave excess cash amount in the e-wallet.”
Mr Lee adds that there can be potential drawbacks with e-wallets, including reliance on technology, which could pose problems if “connectivity is bad.”
“Traditional money changers still have a role in the market, providing convenience for small cash transactions, personalised service through face-to-face interactions, and the tangible experience of exchanging physical currency notes”, according to Mr Lee.
As Singaporeans and tourists weigh their options for managing currencies during their travels, these considerations will play an important role in their choice between digital wallets and traditional services./TISG