Apparently, payroll on the high seas can be quite choppy. According to Ken Goins, Chief Executive Officer at Prepaid Solutions Inc. (PPS), one arcane maritime law stipulates that if a ship makes a mistake on a crewmember's pay, such as issuing the wrong amount or not getting the money to the crewmember in a timely fashion, the seafarer is entitled to double that day's wages.
It is that kind of costly error that PPS' maritime card, called the Travelex OceanPay Payroll Card, is designed to eliminate. Since SellingPrepaid E-Magazine first profiled PPS in issue 10:10:A, Oct. 18, 2010, the Burr Ridge, Ill.-based company has made progress in implementing the program for cruise lines.
On top of extending its contracts with its partners for the back-end network – MTN Satellite Communications and Travelex – PPS finalized deals with Apollo Ship Chandlers Inc. and, most recently, with the International Cruise Management Agency AS out of Oslo, Norway. ICMA provides staffing, such as bartenders and ship engineers, for cruise lines. One such cruise line is Crystal Cruises.
Through ICMA, PPS is rolling out its payroll program on the Crystal Serenity and Crystal Symphony cruise ships. The two deals with Apollo Ship Chandlers and ICMA represent about $80 million in payroll annually, Goins said. He estimated that, all combined, the crews of over 200 ships globally now carry either Visa Inc.- or MasterCard Worldwide-branded OceanPay cards.
Goins said most cruise lines still pay crews with cash. The inefficiency of cash-based payroll for the cruise line industry is multifaceted, with the physical handling of cash and administrative burdens among the biggest problems. Onboard ATMs have to be maintained and loaded with money, Goins noted. And, administratively, all manner of snafus occur when payroll processing is manual.
"These people go on ships and they may have a six- to nine-month contract," Goins said. "And somehow the paperwork gets screwed up and one person ends up at the wrong ship at the docks," which causes headaches in sorting out accounts.
Another common problem concerns wire transfers. "They [ship administration] would actually wire money to accounts at home and they would make mistakes and try to reach into a foreign bank account, get the money out, different things like that," Goins said. "It's nightmarish."
Those kinds of mistakes are eliminated with the OceanPay card, according to Goins. He said on a cruise ship with a staff of 500, OceanPay can save the cruise line approximately $1 million a year.
The product is integrated into the cruise line's payroll system. "All they have to do is just feed the data, just like you were doing a direct deposit today, and just send a flat file of all the information," he said. "It's like here's a list of all the people getting paid this amount and – boom – it's done. They don't have anything else to do.
"They have to manage the implementation of the program and answer questions about the program, but it doesn't add a layer of work onto the cruise lines. It really alleviates a lot of the administrative burdens they have."
A typical on-board installation of the OceanPay system involves setting up a card printer the size of a shoebox in the purser's office and loading it with white plastic card stock, Goins said. The printer is hooked up to the Internet and gets commands from the cruise line's home office when new crewmembers sign on. When a new crewman or woman arrives at the ship, the purser communicates with the printer via a laptop computer; a few mouse clicks later, the printer spits out the new instant-issue OceanPay card.
Goins said PPS has cruise ship implementations scheduled through summer 2011 and is in talks with some of the largest commercial shipping ventures in the world, including Copenhagen, Denmark-based A.P. Moller - Maersk Group and Mediterranean Shipping Co. S.A.
From a payroll standpoint, the number of employees is what distinguishes commercial shipping from cruise lines. Goins said the same basic product application applies in both instances, only that a commercial ship has maybe 30 employees, compared to 500 to 1,000 on a cruise ship.
Although commercial ships employ contract workers in smaller numbers, they make up for it in number of ships, with over 50,000 commercial ships floating in the world's waterways today, Goins noted.
He estimated that the combined maritime card market of cruise lines, commercial shipping (and even offshore oil rigs) is almost $3 billion annually in payroll. "It is such an enormous opportunity for us," he said.
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