Revolut entered the travel space as a low-cost FX provider for consumers in 2015 and is now trying to become an OTA, initially offering accommodation only via Revolut “Stays”, with a £70m “war chest” to fund 10% discounts off-market rates. Future plans include offering flights and car hire driven by google PPC advertising to build upon its “in App” cross-referral opportunities.

So, in essence, Revolut is declaring “War” on the travel trade, trying to muscle into the sector as a new B2C player, rather than working with the trade, as my own CannyApp “3% Cashback Mastercard” does.

Good news, as far as CannyApp is concerned, but who has the right strategy?

Obviously, only time will tell, but Revolut is still massively loss-making, having lost a further £126m in 2020, with the key reason being its high customer acquisition costs.

CannyApp has taken the opposite approach to Revolut, guarantying never to sell competitive products to its travel industry partners and paying a 1% referral commission, on the total spend on the card for its lifetime e.g., 3 years on Average.

This allows us to access the travel Industries “Data Lake” and to advertise to holidaymakers in a highly focused way for just the 28 days before they depart for holiday, which is the period in which holidaymakers consider their Holiday FX needs. This is clearly cheaperthan Revolut’s scattergun advertising across 365 days of the year.

By providing partners with templated “Mastercard Approved” emails, CannyApp avoids any GDPR or database sharing issues, allowing the activity to be bolted into partners existing email activities with minimal effort or cost.

The net effect is that CannyApp has a 10 times lower acquisition cost compared to Revolut, which makes scarifying commissions from selling competing travel products a very small price to pay.

Personally, I think Revolut is putting the proverbial “cart” before the horse. Customers only use their Revolut cards when travelling overseas, so it’s likely to be months if not a year before they take their next trip. Are customers going to remember to check Revolut’s travel deals? I’m not convinced, however with a £70m “war chest”, the trade needs to be aware that they may indeed become a new competitor.

The Foreign Exchange market in 2019 was worth £62.5 Billion in the UK, with 60% of this market controlled by the major bank’s debit/credit cards, so there is plenty of markets to share between Revolut and CannyApp. However, I think Revolut may have just shut the door on potential trade partnerships.

CannyApp refers to Foreign Exchange (FX) as the “forgotten” income steam for OTA’s and homeworkers, with virtually none of the major players pre CannyApp having an income stream from FX.

Given that it’s by far the largest travel “ancillary”, at first it seems amazing that OTA’s have not focused on this space, but it’s only been during Covid-19 that the opportunity has truly crystallised.

With high street branches shutting, great swaths of the UK population suddenly had to embrace “App-based Banking”, which has made it much easier for CannyApp adoption amongst its target market of “Females” booking mass-market holidays.

Combine this will a massive explosion in “Contactless” payment, replacing “paper money” and you can see how the market has moved in favour of a “pre-paid” Mastercard, which is accepted globally and can be topped up instantly by just connecting a debit/credit card.

In a travel market where customer volumes are likely to remain below 2019 levels until 2023 due to a lack of flying capacity, it’s imperative that travel companies maximise revenues per customer.

Ignoring the FX opportunity is now simply inexcusable.