Prepaid travel cards are adding to the business traveller’s ever-increasing arsenal of conveniences.
Offered in Asia-Pacific by Visa, the item is based on a simple concept: it is today’s electronic version of the Traveller’s Cheque. But unlike paper, plastic is more versatile.
Customers can pre-load the card with the local currency, using it in merchant establishments that accept Visa cards or to withdraw money overseas. It was introduced to Asia in 2003, via India, and has since found its way to Hongkong, New Zealand, Australia and Japan.
The number of currencies that can be loaded onto a card varies between countries. In India, Axis bank allows only one currency to be loaded onto a card at a time, which can be re-used and pre-loaded with the local currency of the next country in the traveller’s itinerary. On the other hand, KiwiBank in New Zealand enables travellers to load upto five currencies onto one card all organised into ‘wallets’
Speaking to US-based Scott Salmon head of Visa’s global market development, prepaid products, said that the cards were steadily gaining popularity with large corporations across Asia-Pacific, and will be introduced progressively in more countries. “Companies are turning to Visa’s prepaid travel cards as a more convenient and safe way to provide travel payments for employees around Asia-Pacific,” he said.
“Its popularity is growing in the more mature markets as well as emerging markets around the world. I fully expect prepaid travel cards in the next 12 months offered in more places across Asia.”
Salmon added that the product was experiencing double-digit growth rates in the region. Issuing banks include the Bank of East Asia in Hongkong, Kiwibank in New Zealand, ANZ bank in Australia and Travel Bank in Japan.
But it is in India where prepaid travel cards have generated the most adoption. Eight local banks offer the card in about nine different currencies. The institutions are Axis, State Bank of India, ICICI, HDFC, Corporation, IDBD, UTI and JP Chase. Money exchange centres also offer them.
Earlier this month, Axis Bank revealed that customers had loaded US$1 billion between April and May of this year alone. Currency conversion fees only apply when loading or reloading the card, rather than on a point-of-use basis (as the card already carries the local currency),allowing customers to “lock in” favourable exchange rates. The minimum and maximum amount that can be loaded onto a card depends on various market regulatory requirements.
For example, in New Zealand the minimum load is NZ$100 (US$70.39) and the maximum is NZ$9,500 (US$6,687) per day, but for India’s Axis Bank, the minimum and maximum amounts depend on the currency that is being loaded. Customers can also check their statements online or receive text and email alerts about usage. Since the card is not directly linked to a bank account, if lost or stolen, it can easily be replaced for a small fee.
Helpful as prepaid travel cards may be, these won’t be dislodging the traditional credit cards any time soon. Last year’s Visa research indicated that 80 percent of travellers still preferred the credit card because they perceived the prepaid travel card to have limitations such as capping the maximum amount they could load onto the card each day.
Furthermore, there are extra charges for purchasing and reloading the card and withdrawing money overseas. Fees differ from bank to bank.
For more details, visit www.visa-asia.com/ap/sea/cardholders/tips/travel_money.shtml