A new pre-paid holiday card that claims to substantially undercut rivals sold on the high street is to launch to the trade.
MyTravelCash works as a debit and credit card in euros and dollars. It will launch on June 15 by pre-paid card provider CorporatePay, which claims it can undercut other cards’ charges because it does not have the costs of bricks-and-mortar foreign exchange bureaux and staff.
It will be a rival to existing pre-paid holiday cards, such as the one recently launched by Thomson and First Choice.
MyTravelCash will target independent agents, including dynamic packaging specialists such as Travel Republic, On The Beach and Bookable Holidays, to sell the cards to consumers online. Agents will be paid commission to direct customers from their websites to the MyTravelCash website to order the cards.
Talks will also be held with high-street agents to stock the cards in their shops, and the company hopes to sell 50,000 cards in the first year.
Steve Endacott, non-executive director for CorporatePay, said online and independent agents were missing out on a sizeable income by not selling foreign exchange. He claimed high-street multiples can earn around a third of their income from foreign exchange sales.
He estimates £1,200-£1,400 is spent per party during a seven-night holiday. With around five million passengers thought to buy a dynamic package each year, he estimates there is about £2.5 billion in turnover to be made.
He said: “Most people spend as much money on holiday as they spend buying the holiday.”
Endacott claimed changing money at the airport included a charge of as much as 8% as a result of the exchange rate between the interbank and the exchange rate, while travel retailers were charging around 5% and banks around 3%. MyTravelCash charges around 2%. It is advertising 1,000 euros for £80 less than competitors. “By cutting out the majority of the marketing costs, we can offer them at a cheaper cost to consumers,” said Endacott.
On Holiday Group’s consumer site Fresh Holidays will be among those selling the cards online, while it is looking at ways to sell it through trade site Holiday Brokers. “You can target customers by email at the right time before they go on holiday,” he added.
CorporatePay chief executive Myles Stephenson said cards were sent out to consumers between seven and 10 days of order and could be used in shops and restaurants abroad – anywhere where MasterCard is accepted – or to take money out of a cash point. To take money out of a cash point, there is a flat fee of $1.50 or €1.25, rather than a percentage of the transaction value. Money loaded on to the card can be topped up and balances accessed by sending an SMS text message from resort.
The company has also developed a similar card in partnership with VisitBritain, to sell to consumers coming to the UK.