Travelex Extends Prepaid Travel Currency Cards To Budget-Conscious Corporations To Help Curb Expenses

IMGCAP(1)]

By Will Hernandez

As more companies outside the payments space develop specialized prepaid cards for niche markets, London-based Travelex Currency Services Inc. is about to launch corporate prepaid currency cards at a time when companies are curbing travel expenses.

By the end of this month, Travelex plans to launch corporate prepaid currency cards in the United States designed to eliminate the process of advancing employees cash for international business travel, the company announced last week at the Prepaid Card Expo in Orlando.

Travelex believes the timing is right to jump into prepaid corporate expenses, Christopher Russell, Travelex executive vice president of outsourcing, Americas, said during a roundtable discussion about the product.

Besides streamlining travel reporting, the card would relieve employees from having to use their own credit lines in case a cash advance is inadequate, Russell said. Some corporations' employees are refusing to travel because of that possible scenario, Russell added.

"It's amazing how many more people are not able to afford to finance business travel using their own credit," Russell said. "Credit lines are drying up."

Some analysts believe corporations will be drawn to this kind of product.
Controlling travel expenses is "real problem," says Dennis Moroney, research director of bankcards at Needham, Mass.-based TowerGroup, an independent research firm owned by MasterCard Advisors. International travel is especially difficult to account for because of how the U.S. dollar compares with British pounds and euros, he says.

"You're talking about thousands of dollars that get tied up into that," Moroney says.
The prepaid currency cards first will be available in U.S. dollars, and Travelex plans to release cards in British pounds and euros by the end of the year, according to Russell, who says Storm Lake, Iowa-based MetaBank will issue the cards.

The cards are similar to the company's foreign-currency travel cards. They will carry no fees other than the exchange-rate margin negotiated between Travelex and participating corporations, says Russell, who adds that Travelex will charge a service fee if the card is used for domestic travel.

"We already have three pretty firm commitments from some really good-sized corporations in the U.S.," Russell says.

Travelex believes airlines especially will find the card convenient, Russell said. Airline crews receive per diem cash allowances before each flight from the captain to cover hotel accommodations and food expenses. Russell said he once saw a flight crew at an airport load the funds into Travelex travel card accounts.
The corporate prepaid cards are not person-specific, and MetaBank would issue them in the company's name. "When one person is finished with it, they can pass it off to the next person," Russell said.

Companies can load the card accounts with funds using software provided by Travelex.
"There is no need for an expense report because every single transaction is recorded and tracked," Russell said.

Companies can download the transaction data into an Excel spreadsheet or similar software. If an employee needs more funds, the company can load the card accounts, and funds would be available in about 15 minutes, Russell said.

Corporations also can set daily ATM-withdrawal limits, a feature that helps eliminate the risk of unauthorized transactions, says Megan Bramlette, managing associate with Westbury, N.Y.-based Auriemma Consulting Group.

"From the perspective of the corporation, it lessens the risk because you don't have people running around with [corporate credit cards]," she says.