Payments Watch

The Bank of Montreal (BMO), announced today the launch of the Prepaid Travel Mosaik MasterCard, which they are promoting as an alternative to traveller’s cheques.

According to their press release:

Travellers tell us they don’t like travellers cheques because not enough merchants accept them and they are too difficult to cash. BMO’s Prepaid Travel Mosaik MasterCard is the perfect alternative to travellers cheques because it is accepted almost everywhere, it’s easier to use and it’s safe and secure…Additionally, cardholders can obtain cash in local currency at any automated banking machine around the world that is connected to the Cirrus network. This is a key benefit for travellers and is unique for this program versus travellers cheques.

Source: BMO Bank of Montreal

Ok, dumb question: why not just use your credit card when travelling? Seems like you would get all the aforementioned benefits and would not have to deal with traveller’s cheques either.

Now I get it: the card is prepaid. Which means that pretty much anyone can get one (for example one who would not qualify for a credit card). As they mention:

Travelling vacationers can use the Prepaid Travel Mosaik MasterCard just like a credit card and the funds will be debited from the total prepaid amount on the card. The Prepaid Travel Mosaik MasterCard can be loaded easily from any bank account from most financial institutions by using the same process used to make a bill payment. This can be done through an ABM, via online banking or telephone banking.

Since it is prepaid, and there is no interest, the card would also be useful in enforcing a set budget when travelling. Also, if you go to BMO’s Mosaik site, there are lots of “travel” related reward features (e.g. Air Miles).

Personally, I just don’t see the overwhelming benefit if you already have a credit card, but I suppose it could be useful for the underbanked, or as a bon voyage gift to someone you know who is going on a trip.