Melbourne, Australia (PRWEB) August 18, 2013
Several factors have lead to the subdued performance of the Foreign Currency Exchange Services industry over the past five years. Lower international tourism constrained revenue growth. Tourists coming to Australia exchange foreign currency for Australian dollars and generate a significant portion of transaction volume for industry participants. According to IBISWorld industry analyst Andrei Ivanov, “high global uncertainty following the economic downturn, coupled with the high Australian dollar, has caused the number of tourists visiting Australia to plummet”. Additionally, the higher dollar has made it expensive for international students to study at Australian institutions. As a result, industry revenue is forecast to decline at compound annual rate of 4.7% over the five years through 2013-14 to reach $1.3 billion.
Foreign currency exchange has traditionally been offered to retail clients via bank branches. However, banks have been losing market share to kiosks over the past five years. This can be attributed to higher innovation by kiosks. Foreign exchange makes up only a small part of the services offered to retail clients by banks. As such, kiosks were able to better adjust to consumer trends. The industry has a medium level of market share concentration. The two major players in the industry are Travelex Limited and American Express Australia Limited.
Although the past five years have been rough for the industry, its future remains bright. The Australian Foreign Currency Exchange Services industry is backed by solid fundamentals driving its growth. “Rising population and increasing net migration will support the volume of foreign exchange transactions over the next five years,” says Ivanov. Lower unemployment will drive higher wages, which is anticipated to increase migration of skilled workers into Australia. Improving conditions in the global economy and the unwinding of quantitate easing in the United States will put downward pressure on the Australian dollar, leading to an increase in the number of international tourists and students.
For more information, visit IBISWorld’s Foreign Currency Exchange Services report in Australia industry page.
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IBISWorld Industry Report Key Topics
Firms in this industry offer retail foreign currency exchange services to the public. It excludes wholesale foreign currency dealing services to institutions and investors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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