Foreign exchange specialist Travelex has introduced a new system to reduce fraud on its Cash Passport product, a pre-paid card that stores foreign currencies.

The card is prone to the same type of crime as traditional debit and credit cards, such as theft and skimming. But conventional fraud detection software is unable to detect suspicious activity as it relies on unusual transaction patterns.

By its very nature, Cash Passport is used erratically, says Travelex head of fraud and risk management Peter Jackson.

‘It is aimed at the international traveller, who may use it in a number of countries during their travels,’ he said. ‘They may then stop using the card for several months, before travelling and using it again.’

Travelex has rolled out the Prism service from supplier Retail Decisions, which is a rules-based system that automatically alerts staff if a card is used in breach of its established use.

‘The system went live in May, but we have been constantly refining the rules so it does not generate unexpected alerts,’ said Jackson. ‘It has already detected some incidents of fraud, which has allowed us to contact the customer concerned.’

Cash Passport is an increasingly popular product for Travelex, with 60,000 cards issued in the past 12 months, and 30 per cent growth in the UK.

‘But it is still a young product and we do not want to risk potential growth by exposing the card to fraud that would deter customers,’ said Jackson.

Although UK credit card theft has decreased in the past two years, it still accounts for £68m in stolen funds, says banking industry body Apacs.