According to a new report published by Allied Market Research, titled, “Forex Cards Market," The forex cards market size was valued at $260.34 billion in 2021, and is estimated to reach $1,196.52 billion by 2031, growing at a CAGR of 16.6% from 2022 to 2031.
Cardholders can also use their credit or debit cards issued from an existing bank account to withdraw money anywhere in the world. These cards are generally linked to the savings account with a credit limit. However, credit and debit cards are very expensive when it comes to withdrawing foreign currency from ATMs abroad. Forex cards, however, are prepaid instruments designated in specific foreign currency to carry a specific amount. The cards are pre-loaded with currency and are not linked to any particular bank account. This way, when a forex card gets pre-loaded with the destination’s currency, the exchange rates are locked-in, and the user get protected from currency rate fluctuations. Hence, they pay lesser charges while transacting through forex cards than either debit or credit cards.
Moreover, major market players are adopting various strategies such as partnering with tour companies or airline companies to launch their forex card to get wider customer reach. For instance, Vistara and Axis Bank launched a co-branded forex card that can load up to 16 currencies. The card has locked-in exchange rates and the card holder will accrue 3 award points on Club Vistara for every USD 5 or an equivalent value spent. Moreover, the forex card can load up to 16 currencies and has various emergency assistance services such as loss of passport assistance through TripAssist and insurance cover of up to Rs 3 lakh. Therefore, such strategies adopted by market player will provide major lucrative opportunities for the forex cards market growth in the upcoming years.
On the basis of end user, the businesses segment is the highest growing segment. This is attributed to the fact that forex prepaid cards come with flexible approvals to fit business processes whether the owner need multiple approvers, approval thresholds, special approval permissions, or different approval flows for different credit lines. Business owners can determine who can approve or request credit cards within the business, and cards can even be assigned to a single or multiple cardholders.
Based on region, North America attained the highest growth in 2021. This is attributed to the fact that as consumer travel spends increase, it will open up a huge market in North America for banks and forex card issuers to work with travel companies, and improve the consumer experience. Many issuers are AI-enabling customer onboarding to balance the need for these compliance requirements with growing cardholder expectations for a quick and frictionless onboarding process.
The COVID-19 pandemic negatively impacted the forex cards industry as it is dependent upon the number of travelers going out of their country for vacation or business purpose. However, there was a decrease in the demand for forex card owing to lockdown imposed during the pandemic. Therefore, the COVID-19 had a negative impact on the forex cards market trends. However, the demand for forex travel card increased tremendously among the travelers with the lift up of lockdown.
Key findings of the study
- By type, the multi-currency forex card segment led the forex card market in terms of revenue in 2021.
- By industry vertical, the hospitality segment accounted for the highest forex cards market share in 2021.
- By region, North America generated the highest revenue in 2021.
The key players profiled in the forex cards market analysis are Bank of America Corporation, Charles Schwab & Co., Inc., Citigroup Inc., CREDIT SUISSE GROUP AG, FINNEW SOLUTIONS PVT. LTD., JPMorganChase & Co., Morgan Stanley, Royal Bank of Canada, Thomascook.in, and UBS. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.