Domestic and international business travel is becoming increasingly expensive. To alleviate headaches associated with funding and reimbursing employee travel expenses, foreign currency exchange company Travelex has unveiled its Corporate Cash Passport.
"Especially with what's been going on in the banking industry, credit is getting tougher and tougher for people to get," said Christopher J. Russell, Travelex's Executive Vice President of Outsourcing, Americas. "And it is becoming more and more difficult for employees to be able to afford to finance the cost of travel while waiting to be reimbursed."
The open-loop, MasterCard Worldwide-branded card is loaded (and reloaded if necessary) online by authorized individuals at corporations, such as those in treasury or finance departments, Russell said.
Traveling employees have no control over how much money is loaded onto the cards. But employees pay for goods and services with them, or withdraw cash from ATMs in local currencies, wherever MasterCard is accepted. So employees do not need to carry cash or traveler's checks, Russell said.
Through Travelex's online management tools, corporations can closely monitor their employees' travel expenses. "They can track where [funds] are being spent," Russell said. "They can actually see if a person is spending at unauthorized places. We don't necessarily have that same clarity today."
In addition to having greater employee oversight, the card saves corporations on overhead costs. According to Russell, issuing employees paper checks can run corporations $2 to $8 per check. By electronifying and centralizing the process, that cost is eliminated, he said.
The card also helps corporations save money on international business travel because Travelex locks in the lowest exchange rates. "In every case that I'm aware of, the corporation is actually going to save money on foreign exchange fees because we prenegotiate the rates," Russell said.
The program originated approximately six years ago when British Airways approached Travelex to develop a cost-effective alternative to the airline's paper voucher system. Flight delays or other glitches forced the airline to issue paper vouchers to travelers, Russell said. That voucher system was expensive and cumbersome for the airline to maintain.
With Travelex's service, that paper-based system was eliminated. Travelex then expanded the program to businesses in other industries, such as the maritime industry, where cruise lines needed to pay their crews. Russell explained that the service evolved from a corporate-funded solution directed at consumers to a corporate-funded solution that targeted corporations' employees and contractors. "The greatest interest has been so far from businesses that consistently pay the same people over and over," Russell said.
Travelex has been working with several mid-tier corporations in industries like travel and tourism to roll out the program. "Two of the biggest opportunities are with companies that have a large number of international employees and contractors, and they are looking for ... a better way to fund their expenses for them," Russell said.
Russell estimates the potential market size for the Corporate Cash Passport at "several billion, especially when you get into specific types of industries, like airlines. Imagine what just compensation-type programs for passengers on airlines would be."
As for internal corporate expenses, Russell said corporations spend $45 billion annually on business travel.
If Travelex captured just a small percentage of that, the program would be "worth it," he said. Russell said Travelex has discussed partnering with ISOs to distribute the cards and sell the program to businesses, although no ISO channel yet exists for Travelex. To find out more about potential opportunities, contact Jenna S. Burns, Marketing Coordinator, Travelex - Partners Business Unit, at 502-634-6344, ext. 6008.
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