by Sebastian Krahe
January 06, 2019

Travel cards, also called multi-currency cards – are these still up-to-date in times of internationally widely accepted credit cards? Oh yes, and how!  Especially Travel Cards 2.0, which are connected to the smartphone, offer unprecedented levels of user-friendliness. Learn more about why multi-currency cards are becoming more and more popular, why they create value for issuers and users, why they are an excellent customer loyalty tool and last but not least also a source of revenue – not only for banks, but also for travel and tourism companies.

More and more travelers need easy-to-handle travel payment solutions

Global travel is booming and continues to do so: International tourist arrivals reached a record total of 1.32 billion in 2017, representing a remarkable 7% growth, according to the latest UNWTO World Tourism Barometer. Experts expect comparable growth to continue in the coming years at a rate of 4%-5%.

Source: Statista

As far as business travel is concerned, the Global Business Travel Association (GBTA) reports even higher growth rates for 2017, such as 9% growth for travelers from China and as many as 12.7% more business trips for Brazilians.

Because of this strong global trend, which is of course also being further driven by migrant workers, we defined cross-border payment as one of the global payment megatrends some time ago – here is the article on borderless payment. One of the major pain points that makes travel more difficult is being confronted with many different currencies – and as a result with high and non-transparent exchange rates or foreign currency fees.

How does a travel card work?

A state-of-the-art multi-currency travel card looks and works like “digital money” – users can pay with it with a quick swipe, just as they would with their credit or debit card and can use it to withdraw cash from ATMs.

Travel cards are prepaid cards which can be loaded with several currencies. They work as multiple wallets linked to the card, with each wallet being allocated to a different currency.

 

Convenient, cost-saving and secure – there are numerous reasons why users love travel cards

Travelers particularly appreciate the fact that travel cards spare them unpleasant surprises: Unlike classic credit cards, there is no transaction fee associated with any transfer, exchange, or purchase, imposed by Dynamic Currency Conversion (DCC) merchants.

Further advantages for users are also easy to identify:

Travel cards are much safer than cash or old-school traveler’s checks because, when lost or stolen, they can be deactivated in no time. They are globally accepted and enable users worldwide to withdraw local currencies from ATMs, usually for a small withdrawal fee but without foreign exchange (FX) fees.

Travel cards 2.0: Connected to the smartphone, they are as user-friendly as never before

With the latest generation of travel cards, providers can offer their customers a special level of convenience as they can be operated from a smartphone using an app. Just like the RHB Travel FX card, Singapore’s first multi-currency card issued by RHB Banking Group and Wirecard. The app gives customers total control over the FX rates that they want to buy at by setting an alert on the app at their preferred rates, also allowing them to exchange for foreign currencies anywhere, anytime – enhancing the traveling experience.


Source: RHB Banking Group

The user interface is very intuitive – with just a few clicks, currencies can be exchanged virtually in real time and there are even notifications when a particularly favorable exchange rate is available:

5 main benefits for issuers: offering existing and new customers a useful digital service pays off

Now let’s take a look why it can make great sense to offer your customers a digital travel card solution:

1. Retain your existing customers with a great offer – and win new ones

As we have seen before, more and more people who travel are looking for ways to avoid high FX fees and to profit from amenities with a smart solution. But if their own house bank or their travel operator doesn’t offer an adequate solution, they have to look elsewhere on the market. Companies should not let it get that far in the first place but use the great advantage they have through the proximity to and the trust of their customers and offer them a good solution that makes their travel life easier.

You can keep existing customers and gain new ones – with a user-friendly and flexible solution for both general and especially frequent travelers as well as for business travelers.

And not to forget: The competition is not asleep – there are more and more new players, especially in mobile banking, who offer customer-friendly solutions. But of course you shouldn’t hand your customers to them without a fight.

2. Convert users from traveler’s checks to a modern solution

In fact, there are still users of paper travel checks or withdraw cash whenever and wherever they travel or people who unsuspectingly pay with their credit card on international trips and then get a shock when they see the fees on their monthly statement.

These travelers should be encouraged to convert to a modern, transparent solution that saves them many unnecessary costs, enjoys a very high level of acceptance, and offers many other features.

3. Cross-sell other travel-related products & services

The existing customers who are satisfied users of a travel card are an excellent target group for further products and solutions that make their life on the road even safer and more enjoyable: Travel insurance, luggage insurance, foreign health insurance and much more.

4. Reward and motivate users with loyalty and couponing

Paying with the travel card is even more fun if you combine its use with loyalty points or discounts – many providers rely on this successful marketing strategy because consumers are happy about the discounts and the providers of multi-currency cards are happy about every transaction because they earn a little on every payment.

5. Travel cards as a revenue source for issuers

As mentioned above, this point must not be ignored: Travel cards are not a subsidy business! On the contrary, issuers earn a little with every transaction. Of course, end users don’t notice this. The only costs that consumers have to bear would be loading fees or an annual card fee – which is more than worthwhile as they can save a lot on exchange rates and FX fees thanks to their travel card.

Wirecard’s solution for British customers of lastminute is a good practical example of how a travel company can offer its customers a comprehensive and state-of-the-art payment method for travel – here, too, the functions of the physical card can be easily accessed via an app.

This is how to pick a good tech partner – to launch your own tech travel card in a blink!

With the right technology partner at your side, your own multi-currency card can be up and running very quickly. Here are the most important criteria that companies should consider when selecting a partner:

  • Your tech partner should provide a state-of-the-art digital solution – this is the basis for a smooth integration into daily travel life
  • Look for a partner with proven multi-currency programs around the world, just like Wirecard offering travel card solutions for customers in various countries from UK to Mexico and Australia & New Zealand – all customers benefit from this international experience.
  • In order not to have to reinvent the wheel and for fast roll-out, look for a partner who offers pre-configured payment solutions
  • If you don’t hold a financial license yourself, a partner that can provide scheme memberships, global licence coverage and personalization bureaus as part of a white label solution that you can configure and brand at will, is essential
  • For comprehensive user-friendliness, also make sure your partner offers a mobile app and in addition a configurable cardholder portal in your corporate look and feel, where end-users can also manage their card via their desktop computer.

Whether bank or travel company, no company with a travel-happy customer base should miss the opportunity to offer them a good travel card solution and thus become attractive for new customers as well.