SOURCE: IPO INFO
Rupee card works better than credit and debit cards
There’s a new way to spend money in other countries. Through banks established in India, such as DBS, Federal Bank, and State Bank of Mauritius, several fintech and neo-banks (online-only banks) offer Rupee-denominated prepaid cards.
What is a Rupee-denominated card?
Forex cards are usually issued in a variety of foreign currencies. The Indian Rupee is put onto a Rupee-denominated card, on the other hand.
First and foremost. A rupee card is better than a credit or debit card because you pay substantial fees when you use the latter overseas, both when withdrawing cash and while spending. Due to an acute shortage of currency notes, getting foreign currency in cash is a bit of a challenge these days, and prominent forex merchants like Thomas Cook, Centrum, and Wiseman are suffering as a result of the pandemic, with many of their centres closed.
There are presently three Rupee-denominated cards to choose from Niyo (rupee-forex debit card), Hop (rupee forex debit card), and Happay (pre-paid international card). So, if you’re visiting numerous countries in one trip, you’ll need to figure out how much money you’ll need in each one and fill your forex card accordingly. If the money isn’t used, you’ll end up paying a lot in conversion and re-conversion fees.
These cards are available for purchase through the bank, neo-bank websites, and even foreign exchange agents. This service is currently unavailable from a large number of travel service providers. You’ll need to complete an online KYC (know-your-customer) process and open a bank account with one of the above-mentioned partner institutions.
Low on costs and fees
In comparison to foreign exchange cash (10-15%), current credit and debit cards (3.5-5%), and even forex cards, these cards have a low currency conversion cost (usually 1-1.5%). (2-2.5 percent).
“Happay provides a pre-paid foreign card that can be filled in Indian rupees and avoids the high conversion fees associated with standard forex cards, which are only available in seven to eight currency possibilities.” When you return to India, you can use the same pre-paid card at ATMs and shops,” explains Ananth Reddy, Electrum Financial’s MD.
Because it is a domestic card, you won’t have to worry about currency rate swings.
These cards are accepted in between 150 and 180 countries. “Users can also make withdrawals and online transactions in several currencies with foreign merchants.” Sumit Gwalani, the co-Founder of neo-bank Fi, says, “The ability to toggle on or off the controls on the various sorts of transactions instantly on the app makes it considerably simpler to understand.”
In foreign regions, app-based businesses such as taxis and food delivery do not accept FX card payments. However, according to Reddy, who is responsible in the distribution of the Happay Card, these new cards can come to your rescue. “The rupee-denominated forex card can also be used on the app-based service platform, which is a useful feature because people frequently use cab and meal ordering apps while traveling,” says Reddy.
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Cards aren’t free
Don’t be fooled by claims that these rupee travel cards are free of charge. You will be charged a fee for opening a bank account or joining a credit card programme. “Even if a specific travel card is promoted as having a zero percent mark-up charge, keep in mind that there is always a low charge in some form or another to the tune of 1-1.5 percent,” says a banking employee who did not want to be identified.
At the time of purchase, some cards may charge a card-activation fee. Furthermore, you must open an account with the same bank that issued your card. When you use rupee-travel cards, however, the costs of Rs 150-200 on cash withdrawals at ATMs will not apply.
According to the terms and conditions of the Niyo Global Card, utilities such as trains and gas stations in chosen countries may incur a premium of Rs 10-30 every transaction.
Are Rupee forex cards safe?
The cards, according to Gwalani, are safe to use. His bank has partnered with VISA, which guarantees “world-class security.” “Our financial partner, Federal Bank, follows all of the RBI’s security rules,” he explains.
Nonetheless, the card is covered by a 5-lakh insurance policy. You can use your phone-based app to stop any card in the event of theft or data vulnerability. However, if you’re stuck in a foreign country with a stolen card, you can use the programme to generate a virtual card. “You may establish a virtual card with the app to ensure you pay for hotels and a few other things online,” says Reddy.
Even with these costs, a Rupee forex card is less expensive than foreign currency cards and standard credit and debit cards.