Prepaid Cards Find A Niche In The Travel Market
Around USD 250 million worth in travel-specific prepaid cards were sold during 2003, and card industry newsletter, The Nilson Report, predicts sales to increase by 50 per cent in 2004. Conversely, less than USD 32 billion in travelersÆ checks were sold last year, versus USD 58 billion twelve years ago, and in time, prepaid cards may even replace travelersÆ checks, according to insiders. American Express, which holds almost 70 per cent of the travelersÆ check market, has moved to offer a prepaid TravelFunds card that can be loaded with up to USD 2,750 in funds, for use at Amex-accepting retailers and ATMs.Prepaid cards are attractive to travelers in being secured with a PIN that is tied to a virtual account which exists solely for the purpose of the card, and is not linked to a userÆs bank account. To this end, prepaid cards are believed to be less of a target for criminals or identity thieves seeking to steal a cardholderÆs personal data. In the event that a prepaid card for travel is lost or stolen, the issuer typically undertakes to replace the remaining funds if the cardholder makes immediate contact. The fact that prepaid cards can be used at ATMs, unlike travelersÆ checks, is also a bonus to cardholders seeking easy access to cash.
The American Automobile Association (AAA) offers a prepaid travel card which is accepted at most of its 77 clubs in North America, and can be loaded with up to USD 10,000 in cash for use at Visa ATMs and on the Interlink system, according to the Providence Journal. Fees for prepaid travel cards vary widely, with Amex charging USD 14.95 for its TravelFunds card, and USD 5 per reload, and the AAA offering its card free to members who load more than USD 300 onto it. Prepaid cards have been available in the US for over a decade, and by all accounts, travel-ready cards will comprise a good slice of the overall market. Related Links:
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