Increased digitalisation has changed the way people carry and manage money overseas. Smarter, safer alternatives are supplanting traditional methods of transporting physical cash. According to Allied Market Research, the global forex card market is predicted to rise at a CAGR of 6.7 per cent between 2021 and 2028, indicating that it is becoming more popular than cash. Let's check out who they are better than using cash.

According to Pavan Kavad, Managing Director of Prithvi Exchange (India), forex cards offer an effortless, affordable, and secure way to handle foreign exchange, whether travelling for pleasure, work, or education. 

1. Improved Security: Up to 80 Per Cent Lower Fraud Risk

Carrying large sums of cash while travelling raises the risk of loss and theft. According to The Nilson Report, lost or stolen cash accounts for nearly 50 per cent of travel-related financial losses. If cash is stolen, recovering it is almost impossible, whereas a lost forex card can be instantly blocked and replaced.

• Forex cards come with multiple security features, including:
• PIN protection for transactions.
• In the event of theft or loss cards can be blocked immediately and reissued.
• Zero-liability coverage for fraudulent transactions.

"Suppose a traveller misplaces their currency card in a foreign nation. In that case, they can immediately block it using an online portal or customer support helpline to prevent unlawful access to their funds. This additional layer of safety makes forex cards far safer than carrying actual currency," Kavad explained.

2. Protection Against Currency Fluctuations

Forex cards allow you to lock in the exchange rate at the time of loading the card. This protects you from unfavourable rate changes during your trip. For example, if the local currency strengthens after you've loaded your card, you won't end up paying more—as you might if you're exchanging cash abroad.

3. Cost-effective: 2-5 Per Cent Improved Exchange Rates Compared To Cash

One of the most common worries when exchanging foreign currencies is the exorbitant markup costs charged by exchange counters, hotels, and airports. According to the World Bank, typical currency exchange counters add an average 6-8 per cent markup to forex transactions, greatly raising travel costs.

Forex cards, however, offer:

• Locked-in exchange rates at the time of loading, protecting against currency fluctuations.
• Lower markup fees, typically providing 2-5 per cent better rates than cash exchanges.
• Foreign transaction costs for purchases are either zero or small.
• For frequent visitors or students studying abroad, these savings mount up over time, making forex cards a more financially sound choice.

4. Convenience: 70 Per Cent Of Travellers Prefer Multi-Currency Support

According to a Visa poll, 70 per cent of foreign travelers prefer multi-currency travel cards over cash for their ease. Managing multiple currencies in cash is tough, and continuously transferring money adds to the effort.

Using a forex card, travellers can:

• Load several currencies onto one card and use them seamlessly across multiple countries.
• Withdraw money from ATMs worldwide at affordable rates.
• Avoid the headache of finding exchange counters in another nation.

"For example, a business traveller travelling between Europe and the United States can carry Euros and US Dollars on the same forex card, eliminating the need for separate cash exchanges in each location," said the Managing Director of Prithvi Exchange (India).

5. Improved Budget Management: 65 Per Cent Of Travellers Overspend When Using Cash.

Managing travel spending can be challenging, especially when dealing with many currencies. According to research conducted by the International Travel & Payments Association, 65% of passengers who carry cash overpay because:

• Lack of real-time transaction tracking.
• Impulse purchases since cash spending feels less restrictive.
• Difficulty in keeping track of currency conversions.

Forex cards come with:

• Mobile apps and online portals that provide real-time transaction tracking.
• SMS and email alerts for each transaction.
• Set spending limits to control expenditures.

For students studying abroad, forex cards help parents keep track of their costs and allow students to budget effectively.

6. Increased Acceptance: More Than 90 Per Cent Of Global Merchants Accept Forex Cards

Carrying cash has a significant disadvantage in terms of transaction acceptance. According to a Mastercard report, over 90% of global merchants accept forex cards, while cash may not be accepted in places like:

• Hotels and major retail chains prefer digital transactions.
• Online bookings for flights, hotels, and experiences that require card payments.
• Car rental and transportation businesses sometimes require pre-authorised card payments.

Additionally, many forex cards include:

• Complimentary airport lounge access for frequent travellers.
• Cashback and discounts on foreign transactions result in further savings.
• Emergency help services include card replacement and emergency cash withdrawal.

7. Tracking And Budgeting

Forex cards come with mobile apps that help you track your spending in real time, set limits, and reload instantly. This makes budgeting abroad simpler than juggling receipts and foreign bills.

8. Lower Hidden Charges

Using cash involves potential hidden costs, such as ATM withdrawal fees abroad, poor exchange rates, and conversion charges. Forex cards, especially zero-margin ones, often come with transparent fee structures. They eliminate dynamic currency conversion (DCC) fees that credit/debit cards may charge when used internationally.