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Modulr has launched a foreign exchange product for travel intermediaries, alongside new research showing widespread difficulty managing FX costs across the sector.
A survey of 400 finance, treasury and operations decision-makers at travel intermediaries across the UK and Western Europe found many businesses still rely on manual processes and disconnected systems for cross-border payments.
The research found 85% of respondents see FX cost management as a challenge, yet only 26% track those costs precisely. A further 88% estimated their annual FX bill exceeds €300,000.
It also highlighted inefficiencies in international payments. Some 93% of respondents said their business had paid to convert the same money twice, while only 5% had processes in place to prevent double conversion.
Just 32% described their FX arrangements as fully integrated or automatically handled within the platform they use to pay suppliers, suggesting most treasury teams still work across separate providers and reconciliation processes.
Hidden costs
The research focused on travel intermediaries, a part of the market that routinely manages supplier payments across multiple currencies. This can leave finance teams exposed to exchange-rate costs, operational delays and extra reconciliation work when payment systems and FX services are separate.
Modulr's new product is built into its existing payments platform and covers account-to-account and virtual card currency exchange. Businesses can convert balances within the same system they use for payments, accounts and cards, rather than through a separate FX provider.
Customers can also issue virtual cards in a supplier's currency while funding them from a primary balance. Businesses pay an exchange-rate margin on each conversion, with no fixed or monthly fees.
"For businesses scaling across currencies, FX can often mean friction, with a separate provider, a separate reconciliation process, and costs that are hard to predict. The research we have launched today highlights this, with just one quarter of businesses tracking the cost of FX despite 85% citing it as a challenge. That is one of the key problems we are removing with our FX solution, built directly into the same platform our customers already use for automating payments. This means transparent and competitive rates as well as a full audit trail with no new system or stakeholders to manage. I'm excited to see how we build this offering out in the coming months, including offering booking-linked FX protection to ease the FX cost of booking margins for our customers," Melek Pirgon, Chief Product Officer at Modulr, said.
Operational pressure
The figures suggest travel intermediaries face both direct currency costs and operational strain. Treasury and finance teams are dealing not only with exchange-rate exposure, but also with the burden of moving money through multiple systems and matching transactions afterwards.
This can be particularly acute in travel, where intermediaries often collect funds in one currency and pay suppliers in another. Double conversion can increase costs, while limited visibility into the full FX bill can make it harder to understand booking and supplier payment margins.
The new service is designed to bring those processes together in one platform, giving customers a single place to manage conversions, fund cross-currency card payments and oversee multi-currency operations.
Modulr processes more than 200 million transactions a year on an annualised basis and more than £195 billion in payment value. It serves more than 6,000 companies, from smaller businesses to larger international groups.
The findings underline how FX remains a largely unresolved cost for many travel intermediaries despite the volume of cross-border payments they handle, with 93% saying their business has paid to convert the same money twice and only 5% saying they have processes to stop it.