Deliverable FX and currency exchange at prominent travel hubs such as major international airports is a vast and high volume business.
This week, the repercussions of a firm leaving a physical location with large customer throughflow has become apparent as Moneycorp, a direct foreign exchange provider which is backed by private equity firm Bridgepoint, is to leave Heathrow Airport.
The entirety of its 28 outlets and its complete payroll will be transferred to Travelex, the firm’s larger rival, which will have exclusivity in providing deliverable FX services at Heathrow Airport following Moneycorp’s exit.
Deliverable FX has become a highly lucrative business recently. A major indicator of this was Australian deliverable FX firm OzForex having issued an IPO in 2013 valued at $439 million, with shares in the firm accelerating by 28% in value on the day of public issuance.
Travelex has also recently been the subject of a high value IPO, embarking on a $1 billion plan in March last year.
In a statement which was provided to British news source Sky News on Wednesday afternoon this week, a spokesperson at Heathrow Airport stated “”Moneycorp signed a contract in April 2014 to provide currency exchange services to passengers at Heathrow.
“After eight months they informed us that they could not honour the financial terms of the contract and served notice that they will cease trading at the airport in June of this year. Travelex will now be the currency exchange provider at Heathrow.”
“Travelex comes with a wealth of experience in the foreign exchange market and we will work with them to offer our passengers good value for money, competitive rates and an excellent online pre-order service” concluded the spokesperson.
According to a report by Sky News which followed the issuance of the statement by Heathrow Airport, just a few hours later, Heathrow Airport said it was “rescinding” that statement, and issued a replacement which omitted any mention of Moneycorp being unable to honour the financial terms of its contract.
In a separate statement, Mark Horgan, Moneycorp’s chief executive said the company had “resigned its contract with Heathrow Airport and will fully exit operations at each terminal by the summer”.
He said: “The commercial opportunities at Heathrow did not materialise as expected and therefore the decision was made to refocus the growth of our retail business elsewhere.”