The increase in corporate travel to international destinations and the rise in currency fluctuations seem to have given a fillip to multiple currency forex cards. The demand for such cards is on the rise, senior bank officials said.
A forex or travel card is a prepaid card which can be loaded with foreign currency. It can be used like a debit/credit card while travelling overseas.
“Multicurrency card enables customers to manage transactions across various currencies in one single card and helps them to lock in the currency exchange rates,” said Mr Uday Sareen, Country Head, Retail Banking, ING Vysya.
While most banks have separate cards for the different currencies, some banks such as ING Vysya, State Bank of India and Axis Bank have multicurrency cards offering 5-6 currencies on a single card.
HDFC Bank plans to launch a card offering 10 currencies, which include the US Dollar, Euro, Sterling Pound, Singapore and Canadian Dollars, Yen and Dirhams loaded onto it. The card would be primarily targeted at corporate customers, said a senior bank official.
Growing usage
The usage of forex cards by the corporate segment has been growing at over 25 per cent on a year-on-year basis. HDFC Bank holds about 30 per cent of the total forex card market with a usage volume pegged at about $1.5 billion (around Rs 8,400 crore at current exchange rate).
Close to 90 per cent of the total spends made by the corporate segment is on forex cards while currency and travellers' cheques account for just about 10 per cent.
According to Mr Sareen, the travellers' cheque as a segment has been de-growing annually at 7 per cent. “This gives an opportunity for muti-currency cards to grow and slowly replace the cash market, when it comes to overseas travel.”
Retail or leisure travellers still account for just about 15 per cent of the total travel cards usage market. The rise in foreign travel and growing awareness about the convenience, safety and security of travel cards has helped the segment post growth of over 50 per cent.