Travel wallets morph into major hit

New foreign currency travel wallets have become a major hit with banks and clients as the chip and pin-protected cards are safe, convenient and easy to use.

A travel wallet can usually simultaneously carry value in four currencies while a person is abroad.

Anthony Grant, CEO of FNB Foreign Exchange, said new card volumes grew by 110% from 2015 to date. Absa and Standard Bank reported steady growth, with the former issuing thousands of new cards and reloads on a monthly basis.

The rise of travel wallets co- incides with a fall in demand for travellers cheques. “Demand for foreign notes is still high because people seem to prefer to have more than one payment option while abroad,” Grant said.

According to Arno von Helden, Shyft product manager and head of trade and forex for personal, business and commercial banking at Standard Bank, travel wallets’ lower costs beat those of foreign notes for banks.

Card activation fees are R145 at Absa, R75 to R200 at FNB and R125 at Standard.

Absa and FNB can carry four currencies simultaneously; Standard can carry one only. Load commissions are 1.95% at Absa, 1.8 to 2% at FNB and 1.98% at Standard. Currency conversion fees are 4% at Absa, 4% at FNB and 2.5% at Standard.

ATM withdrawal fees are identical at Absa and FNB. Standard’s are all higher. Absa’s currency conversion fee is based on switching between travel wallets.

FNB card activation and commission fees vary based on the use of online, call centre or branch channels. FNB’s 4% conversion fee is applicable when using currencies that aren’t loaded onto the travel wallet.

By buying foreign exchange upfront, travel wallets can “hedge” against exchange rate fluctuations. Travel wallets are not linked to traveller’s bank accounts, Grant said.