Businesses still not making the most of multicurrency products

The summer holidays have finished for most - and may have been more costly than anticipated thanks to Brexit. Still, fortunately, there are methods that holidaymakers can utilise to make savings while they enjoy a bit of sun, sea and sand, with many opting for prepaid cards, which are more secure than cash, have preferential FX rates, and help to budget as the funds are pre-loaded.

Prepaid travel card usage is increasing amongst consumers, but many businesses are still unaware of the many benefits that they can offer.

Reduced cost

FX rates on debit and credit cards are typically very poor. Prepaid travel cards can offer lower FX fees, saving around 1% on average, with some programmes offering even better rates. In addition to this, businesses can save money by using a multi-currency product to make payments across borders, eliminating the need to maintain banking relationships in multiple countries. With international bank transfers costing up to £35 a pop, the savings can be huge.

Employees can also pre-book hotels and transport in their destinations local currency, further streamlining payment processing and reducing cost.

Convenience

Previously, prepaid cards were only available in specific currencies. Now, a single multicurrency travel card can be linked to multiple currency wallets. This means an employee can hold a number of different currencies in different wallets and when a transaction takes place, the currency of the transaction will be debited from the matching currency wallet. No bank is currently able to offer a multi-currency product to their corporate clients which allows this.

Employees have the option to move funds from one wallet to another; often at significantly better FX rates than would be offered if making these transactions via a credit or debit card, or bank transfer.

A more efficient way of managing and controlling expenses

The vast majority of businesses do not have an efficient process in place for claiming back expenses. For frequent travellers, this process can become even more complicated, particularly if they are not often in the office, limiting when they are able to provide expense forms and receipts directly to the finance team.

Consolidating receipts and checking them against statements that arrive a month later takes time and resources, not to mention cash flow being impacted when a significant, and unexpected, transaction crops up.

Prepaid cards provide a quick distribution method for company expenses no matter where in the world the staff are based at any given time, in multiple currencies. By loading the cards in real-time, businesses can dramatically streamline their expense process and remove a lot of time-consuming and cumbersome paperwork.

Using a prepaid card for managing travel expenses allows employers to have an increased element of control over their employee's spend. Spend can be monitored at all times, which eliminates the risk of fraud, and significantly reduces the resources required to check the accuracy of expense claims. This can also help to prevent employees from abusing their expenses; and like most corporate cards, specific merchant category codes can be excluded and ATM withdrawals can also be blocked.

Triggers and alerts can also be set up within the platform, so if an employee is meant to be at a seminar in Miami, but you see a huge bill being racked up for cocktails at a beach bar all afternoon, you can query these transactions immediately rather than having to pull them up on it a month or more later!

Generating new revenue streams and adding value

As well as reducing costs, prepaid travel cards can be used as a way of generating revenue by enabling member associations to offer a great service to their membership while encouraging brand loyalty.

Examples of this could be a company that offers European breakdown cover. Customers who are using this product will be very likely to want to buy euros, making a prepaid travel card an added bonus as it prevents them from being charged 3% by their credit/debit card provider and saves them the trouble of having to carry cash. Therefore, a membership organisation can provide added value, as well as a better financial offering to their members than using the FX rates charged by banks/credit card providers.

Another example where this could be applied is an airline. Prepaid cards could be offered to members of its frequent flyers programme, with increased loyalty points every time they spend on the card in airports or during flights.

It’s clear that prepaid cards can offer benefits that businesses may have never of considered. Prepaid is no longer a sub-prime product and is becoming a more popular choice for consumers and businesses alike.