Catering to Japanese tourists is big business in Hawaii, and Bank of Hawaii is vying for a piece of the action with a new kind of plastic.
The $14 billion-asset bank has created a stored-value card much like Visa's Travel Money product, but expressly for Japanese travelers.
The prepaid card, introduced in late August, offers security and convenience, said Sebastian Adam, business manager in the Honolulu-based bank's foreign exchange group.
"You can store cash via a card with PIN protection, get all the benefits of travelers checks, plus additional ones," such as a prepaid phone calling card feature, he said.
The magnetic stripe product, called Cash Card, acts like a bank debit card. A tourist purchases a card from the bank in values of $300 to $10,000. The bank charges a $19 fee and holds the funds, which can be drawn from any Star System ATM or Explore point of sale terminal. It is functional in the United States, Guam, and Saipan.
The market is sizable - almost 95% of Hawaii's tourists are Japanese, said Mr. Adam. A brochure describing the card is printed in English and Japanese.
The bank won't predict sales, but said it has had some success, so far. Regarding the high price of entry at $300, Mr. Adam said that with Hawaiian hotel rooms at $250 a night, few travelers "come here for a few days and bring $200." He expects the average stored-value card to hold $1,000.
If a card is reported lost or stolen, it will be replaced for another $19, or it can be cashed out. Though the fee is high for a bank card, the exchange rate is favorable, Mr. Adam said.
The bank gets fee and interchange income, and valuable experience with the stored-value concept that "is hot right now," Mr. Adam said.
Anne Moore, president of Synergistics Research Corp. in Atlanta, said the card has some benefits. But she noted that most tourists convert money to travelers checks prior to leaving their home countries. To sell the Hawaii program, "they've got to capture people with large wads of cash."
"Japan is very much a cash society because of the fees associated with banking," said Mr. Adam. "When (the Japanese) come to Hawaii, they show up with a lot of cash."
Ms. Moore also noted that travelers checks are accepted like cash at most tourist destinations, while the Cash Card is limited to ATMs and a smattering of point of sale outlets - about 400 in Hawaii.
Mr. Adam contended the Cash Card is more convenient than travelers checks because tourists can slip it in a pocket and go snorkeling or water skiing - popular Hawaiian activities - without worry.
"It's not the same as lugging around your wallet - it doesn't matter if it gets wet," he said.
Still, Mr. Adam acknowledged the drawback. Though the cards are sold exclusively in Hawaii, Bank of Hawaii expects its Tokyo branch to begin issuing the cards by yearend, regulations permitting.
