New research from the DCC Forum highlights UK consumers’ ignorance around foreign currency exchange rates.
The research, released today to mark the launch of the DCC Forum, was conducted with YouGov across more than 2,000 UK consumers and asked Britons to convert £1 into its equivalent value in euros.
Only one in ten respondents provided an accurate estimation, identifying that £1 converts to roughly €1.4.
Almost a quarter (23 per cent) stated outright that they did not know.
British consumers were similarly unsure about the exchange rate between British sterling and US dollars.
Only 14 per cent of those surveyed were aware that £1 is equivalent to around $1.5, with 32 per cent stating outright that they did not know.
Asked to rate their own understanding of foreign currency exchange rates, more than half of UK consumers admitted to being ‘not knowledgeable’, and just six per cent claimed to be ‘very knowledgeable’.
When responses were split by gender, a clear divide emerged, with men far more confident in their grasp of foreign exchange rates than women.
More than half (56 per cent) of men claim to be ‘knowledgeable’, compared to just over a third (35 per cent) of women.
Men are twice as likely to rate themselves as ‘very knowledgeable’ about foreign exchange rates compared to women (nine verses four per cent).
DCC Forum’s research confirms that for the majority (62 per cent) of consumers, cash is the most popular payment method when abroad, followed by credit/debit card (27 per cent) and pre-loaded money cards (ten per cent).
On average, Britons expect to spend £736 abroad over the next twelve months, excluding flights and accommodation.
Some 21 per cent of respondents expect to shell-out between £1,000 or more.
Gino Ravaioli, chairperson of The DCC Forum, commented: “We know that Britons collectively make around 60 million trips abroad every year, and a strong grasp of foreign currency exchange rates allows travellers to be more financially astute when making overseas purchases.
“Consumers paying in a foreign currency can quite often lose track of their spending when abroad, and having a clear understanding of exchange rates helps to mitigate this.
“For travellers who don’t have time to research and understand exchange rates, dynamic currency conversion - a process in which consumers can pay in pound sterling at point of sale - offers transparency and peace-of-mind when it comes to budgeting.”
The DCC Forum commissioned the research with YouGov to coincide with its launch as a new industry body designed to help consumers understand the choices available to them when making overseas debit/credit card payments.