Multi-currency travel cards are gaining popularity among Indian travellers, prompting private sector banks to make a dash to launch this product.
For instance, HDFC Bank’s new travel card, which will be launched towards the end of this month, will have the option to load 10 currencies in one card. ING Vysya Bank has introduced a travel card that allows customers to carry as many as four currencies — US dollar, pound sterling, euro and Australian dollar — in one card. A couple of other private-sector lenders are also firming up plans to launch similar cards for their customers.
“Multi-currency travel cards are particularly suited for the corporate segment when employees are posted abroad or are travelling to multiple countries on a regular basis,” notes a senior official of Axis Bank. “Additionally, the card will also be preferred by business travellers.”
Industry players estimate that Indian travellers annually spend close to $1.2 billion through travel currency cards.
Axis Bank, which is also the largest issuer of travel currency cards in India with close to 48 per cent market share, will soon launch a multi-currency travel card. “At present, our travel currency cards are offered in 11 currencies. We plan to add Thai bhat soon,” the official adds. “Axis Bank also plans to launch a multi-currency travel card. Ideally, the four major currencies — US dollar, pound sterling, euro and Swiss franc — should be sufficient.”
HDFC Bank’s new travel card, which will be launched towards the end of this month, will have the option to load as many as 10 currencies in one card.
The spate of multi-currency card launches has raised doubts if the lenders would continue to offer single-currency cards. While bankers claim they are not in a hurry to phase out single-currency cards, they admit that customers now prefer multi-currency cards as they don’t have to carry more than one card during foreign travel.
“It is a much better and stronger product than any single-currency travel card currently available in the market,” says a senior official with HDFC Bank. “A multi-currency card will be popular among corporates, as their executives often have to travel from one country to another. But, over a period of time we expect even retail customers to shift to this product.”
According to bankers, a multi-currency travel card not only saves customers from the burden of carrying several cards; it also offers them protection from exchange rate fluctuations.
For instance, if a person has euro card and he travels to Australia, the amount he spends will depend on the foreign exchange rate between euro and the Australian dollar. This is because he has to convert the euro balance in his card into Australian dollar before making payments. But if he has a multi-currency card that allows him to load both euro and the Australian dollar, he does not have to convert euro into the dollar while making payments in the island-continent.
“There is a growing need for multi-currency cards as people are travelling abroad more frequently than before,” says a senior executive of ING Vysya Bank. “We expect that single-currency cards will be phased out over a period of time. Probably, there will be a single-currency card for those currencies that will not be available on multi-currency travel cards.”
ING Vysya Bank will continue to add new currencies to its multi-currency travel cards, he adds.
Some bankers, however, are of the opinion that leisure travellers will prefer single-currency cards, as they are simple to use. “Leisure travellers and students will still prefer a single-currency travel card based on the country of travel or education considering the convenience and simple usage,” adds the official with Axis Bank.