Multi-currency cards have become increasingly popular in recent years due to the growing demand for international travel and transactions. The ability to hold and spend multiple currencies on a single card offers significant benefits to both consumers and businesses. However, implementing a multi-currency card solution can be complex, and there are several approaches to consider.
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What Are Multi-Currency Cards?
Multi-currency cards are a type of payment cards that allow users to hold and spend multiple currencies on a single card. This eliminates the need to hold multiple cards or exchange currency before traveling. Multi-currency cards typically offer features such as:
Multiple currency accounts: Users can hold balances in various currencies, such as USD, EUR, GBP, and JPY.
Dynamic currency conversion: The card issuer converts the transaction currency to the account currency at the time of purchase, using real-time exchange rates.
International acceptance: Multi-currency cards are accepted by merchants worldwide, making them ideal for travelers.
Mobile wallet compatibility: Many multi-currency cards can be added to mobile wallets like Apple Pay and Google Pay for contactless payments.
Multi-currency cards offer significant benefits to both consumers and businesses. Consumers can save time and money by avoiding currency exchange fees and the hassle of carrying multiple cards. Businesses can benefit from increased customer satisfaction and global reach.
There are several different approaches to implementing multi-currency cards that we are going to discuss. By understanding the options available, fintech businesses can choose the best approach to meet their customers' needs and achieve their business goals.
Multi-Currency Cards and Accounts
Concept: Users have multiple payment accounts in various currencies, all linked to a single payment card.
Process: When a user makes a payment in currency X, the authorization system recognizes the transaction currency and debits the corresponding account. If there are insufficient funds, the system debits the default currency.
Pros: Users can manage their currency balances in advance and see exchange rates before making transactions.
Cons: Users must perform currency conversions before traveling, which can be inconvenient.
Implementation: Card issuing companies must enable multi-currency functionality with Mastercard/VISA or implement multiple settlement accounts with payment organizations and manage conversions accordingly.
Currency Conversion on Single Account
Concept: Users have a single account and currency conversion is performed dynamically during each transaction.
Process: When a user makes a payment, the system converts the transaction currency to the account currency using real-time exchange rates.
Pros: Users do not need to convert currency before traveling, and they benefit from dynamic exchange rates.
Cons: Implementing dynamic currency conversion can be technically challenging and may require additional costs.
Implementation: Card issuers must integrate with an online FX API and manage exchange rates during authorization.
Multiple Cards for Different Currencies
Concept: Users have multiple cards, each linked to a separate account in a different currency.
Process: Users can choose the appropriate card for each transaction based on the currency involved.
Pros: This is the cheapest scenario to implement, as card issuing costs have decreased significantly.
Cons: Users must manage balances on each account separately and perform currency conversions in advance.
Implementation: Card issuers must offer an inexpensive currency conversion mechanism.
How to Implement a Multi-Currency Card Solution?
When considering a multi-currency card solution, it is important to carefully evaluate the pros and cons of each scenario and choose the approach that best aligns with your business goals and customer needs. By understanding the different options available, fintech businesses can provide their customers with a convenient and cost-effective way to manage their international transactions.
If you are interested in implementing multi-currency cards in your fintech business, please contact Verestro. We provide a robust card issuing solution that meets the needs of our business clients.
