Tuxedo recently launched a new Escape Travel Card, what does that entail?
The Escape Travel Card is a prepaid MasterCard® currency card. Easily adaptable to our clients’ requirements, the card is underpinned by a programme that enables a quick and seamless set up process. This enables distributing partners to earn attractive commission payments instantly, while offering their customers a simple, safe and cost effective way to manage overseas spending.
We developed the card to provide partners with a prepaid product that not only provides an ancillary revenue stream, but also integrates seamlessly with existing business practices and processes. We are working with a number of clients who are successfully utilising the card within their marketing/sales promotions – preloading the cards for customers instead of offering more traditional pricing discounts or holiday upgrades.
Our solution allows clients to co-brand or fully white label the card and customer communications.
What else is new at Tuxedo Money Solutions?
We are expanding our range of payment solutions into new sectors, such as low cost cross-border payments, as well as expanding internationally. We now have an operational centre in Chester, as well as offices in London and Melbourne, Australia. Early next year will see further expansion into Dubai and America.
We have also continued to invest substantially in our market leading technology, the eccount® platform, which was developed in-house and underpins all of our payment solutions in the UK and abroad. It is an incredibly versatile and flexible platform that provides Tuxedo with a real competitive edge.
Are travel agents and other travel companies aware of the types of products that are available and/or making use of this?
We believe that a growing number of travel companies are seeing the benefits in a tailored prepaid product that can benefit them financially, as well as improving brand engagement among their customers.
We are also seeing clients using the cards as an enhancement to their existing marketing and sales promotions; offering preloaded cards to customers instead of discounting holidays or adding free packages. This approach not only reduces costs of promotions as income is earned once the cards are used, but also provides a simple and cost effective way to increase distribution quickly.
Travel cards are perhaps the most well-known and accepted form of prepaid cards. Whilst most people working with the travel sector are aware of these, there is still work to be done in helping the industry to understand the commercial and brand opportunities associated with offering cards to their customers, particularly where these can be tied into wider marketing and loyalty initiatives.
The sector has also shown its willingness to look to the future with its rapid adoption of new payment technologies such as virtual cards. This mentality bodes well as payment solution providers develop new, enhanced solutions that continue to control and drive down costs and increase revenue. We envisage there being a lot more noise in 2015 around opportunities open to travel businesses in regard in cross boarder payments, expense management and international payroll.
How has the FX/currency arena changed in the last few years? What trends are you spotting?
In terms of prepaid products, the market trend has been for multi-currency cards, although very few people in the UK ‘hedge’ their holiday money, typically leaving it close to their departure before purchasing currency.
As such, we believe that an alternative solution offers cardholders much greater flexibility and reduced costs. Loading the card with GBP and currency conversion done at point of use, no matter where the cardholder is in the world, gives the cardholder a much more flexible solution as the card can be used in multiple destinations, on the same trip or future holidays, without the need to pay to re-convert currencies.
What could be ahead for the industry moving forward?
Holiday providers are beginning to recognise this income potential and the value of branded cards, which keep their brand ‘front of wallet, front of mind’ for customers. As the popularity of prepaid cards shows no sign of abating, consumers’ awareness of FX rates and where to get the best deals will also continue to rise. Value-added programmes that offer additional benefits will become crucial if providers are to stay front of mind.
With travel providers’ sales margins continuing to tighten, operators are increasingly seeking new ways to boost the bottom line with the introduction of new ancillary revenue generators.
For prepaid cards, it has been common across the market for travel operators to earn commission only on the initial load, and there are often challenges around branding the product and integrating it into existing company systems. To combat this, we specifically developed the Escape Travel Card so it fits seamlessly into existing business practices, and it is designed to offer a generous commission rate paid over the life of the card for all loads.
There is also an undoubted opportunity for the industry to review how they currently manage expenses and international payroll, with prepaid solutions offering a compelling alternative to improve efficiency and drive down costs.
With this in mind, we believe that restrictive, single solution programmes will increasingly become a thing of the past, as travel companies look for more flexible payment solution providers who favour a partnership approach, where the needs of the distributing partner are made a priority.