Another option is forex cards, which can be used for all electronic transactions and even ATM withdrawals. These are prepaid cards that allow you to transact in a local currency without the risk of exchange rate fluctuations. Although single currency forex cards have been around for quite some time now, in recent years most banks and travel agencies have also offered multi-currency cards.
While forex charts are convenient to use, understand the fees, pros, and cons before using them.
Banks or travel agencies usually charge a fixed fee for issuing a forex card and loading / unloading foreign currency onto the card.
For example, Axis Bank Ltd invoices ?? 300 plus TPS to issue a forex card to one or more currencies. “Then there’s a markup on the exchange rate that the bank will charge when you load your card. As a general rule, this increase is of the order of 1 to 2%. If you have reached the United States and swipe that dollar denominated forex card, there is no charge as it is a dollar to dollar transaction, ”said Satheesh Krishnamurthy, senior vice president , wealthy business, Axis Bank.
Unlike an international credit or debit card, there are no other cross exchange fees that a bank charges when you swipe a forex card at a merchant cash advance or withdraw money from an ATM. However, there is an inter-currency charge if you load the card with one currency but use it in another. For example, if you have euros on the card but use it for US dollars.
There may also be a charge for withdrawing cash from an ATM. For example, Axis Bank charges $ 2 (or the equivalent in other currencies) per withdrawal. RBL Bank has no fees on ATM withdrawals a number of times, said Surinder Chawla, head of geographic branch and business banking, RBL Bank. A forex card from BookMyForex offers three free ATM withdrawals, said Nitin Motwani, co-founder and chief technology officer of BookMyForex, an online currency market.
Much like credit or debit cards, forex cards offer the convenience of not carrying cash. But the similarity ends there. When you swipe a forex chart, you know the exact conversion rate, unlike other charts where it is dynamic. Sure, this can work to your advantage or disadvantage, but just like cash, it can help you stay on budget.
“The exchange rate is fixed at the time of loading or before leaving on a trip. If someone uses a credit or debit card overseas, whether on a PoS (point of sale) machine or an ATM, the fees are very high, ”Chawla said.
It is up to the user to have a single currency wallet or multiple currency wallets loaded on a single card. For example, a person who needs to travel to the United States as well as Europe may have US dollars and euros loaded on a single forex card. When swiped in Europe, it will automatically be deducted from the Euro wallet. Likewise, in the United States, the dollar wallet will be debited.
You can also use a single currency wallet in a country with a different currency. In the same example, if the person has a single currency wallet with euros, and if they use the forex card in the United States, they will be able to make transactions but will have to pay additional fees in cross currencies, which are at minus 3% of the transaction amount. “A better option is to load the forex card with the required local currency with Indian currency. The higher the number of foreign exchange or cross currency transactions, the higher the cost to the consumer, ”Krishnamurthy said.
Lack of security layer: Although all debit or credit card transactions in India, including those done at merchants, use two-factor authentication, you are not prompted to enter your PIN code every time you swipe your card in the debit card. many other countries.
So you need to be careful where you use your forex card. “The biggest downside is that the card’s magnetic stripe gets copied to an ATM or sorry merchant, and you could be vulnerable to fraud and your money could be swallowed by a fraudster,” said Ravi Menon, head of changes, Cox. & Kings Ltd.
Contested transactions: Another issue is contested transactions such as debiting your account but not crediting the merchant’s account. While there is an established process for dealing with disputes and fraud, it can take time. “In the event of a dispute or fraud, the customer must call the bank’s customer service department and report it as soon as possible to avoid any further abuse. In such cases, it takes up to 45 days for an investigation to be undertaken by the network service providers, ”Krishnamurthy said.
Resolution can take a considerable amount of time in some cases. “The process has to go through ATM networks and outlets outside of India. Many cases take 2-3 months to resolve, ”Menon said.
This is complicated in the event of fraud because most banks require that an FIR be deposited in the country where the fraud took place. “Hosting an FIR in a foreign country is a major task. What usually happens is that by the time you realize a fraud has occurred, you’ve probably left this country. It becomes difficult to explain all of this to the bank’s legal team. Then it’s up to the bank to look at the particular case, ”Menon said.
Using a forex card has its benefits, but if you end up in a dispute or your card is compromised, you will be in trouble. Keep your card information safe and be careful when swiping the card.
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