RuPay Forex Cards to be Issued Soon; How Can It Be Useful While Travelling Abroad

RuPay Prepaid Forex Cards: The Reserve Bank of India (RBI) on June 8, 2023 has allowed banks to issue RuPay Prepaid Forex cards for use at ATMs, PoS machines and online merchants abroad. The RBI governor said the launch is aligned with the vision to expand the reach and acceptance of RuPay cards globally.

Additionally, RuPay Debit, Credit, and Prepaid Cards will be allowed to be issued in foreign countries and used globally, including in India. These actions will increase RuPay cards’ accessibility and acceptance throughout the world. These announcements were made by the RBI governor in his June 8, 2023 bi-monthly monetary policy review.

“RuPay Debit and Credit cards issued by banks in India have gained international acceptance through bilateral arrangements with international partners and co-badging arrangements with international card schemes. In order to expand payment options for Indians travelling abroad, it has been decided to allow issuance of RuPay Prepaid Forex cards by banks in India for use at ATMs, PoS machines and online merchants overseas. Further, RuPay Debit, Credit, and Prepaid Cards will be enabled for issuance in foreign jurisdictions, which can be used internationally, including in India. These measures will expand the reach and acceptance of RuPay cards globally. Necessary instructions will be issued separately,” stated the RBI’s Statement on Developmental and Regulatory Policies, issued on June 8, 2023.

What are Forex Cards?

A Forex Card or Travel Card is one of the easiest ways of carrying foreign currency when you are travelling abroad. Generally, when you opt for a prepaid forex card, you need to load these cards with one or multiple foreign currencies and use them interchangeably in different countries.

It also allows you to withdraw cash in foreign currency, check your balance and pay for shopping in foreign currency. You can also top up the card depending on your requirement.

Who Can Buy Forex Cards?

Only a KYC-compliant Indian national can purchase a forex card. Non-resident Indians cannot apply for one. A card can be issued to minors above 12 years of age after a parent/guardian has signed the application form.

What are the Charges Involved?

Charges: A prepaid forex card is typically loaded with funds upfront. You can load money online. Some firms may charge you a nominal fee, while many offer it free of cost. However, the exchange rate used to buy forex for the card is typically higher than the IBR as it covers the operating costs. So, you must check the margin the issuer charges for interbank exchange rates (IBR).

How Will Internationalisation of RuPay Card Help While you Travel Abroad?

Preloading a forex card locks in exchange rates and is one of the safest options to use abroad. Hence, they protect you from rate volatility and fluctuations.

Rahul Tandon, Chief Product Officer, Safexpay, said: “These measures not only provide enhanced payment options for Indian travellers but also promote financial inclusivity and strengthens the position of RuPay in the global payment ecosystem.”

These cards also do not incur additional foreign exchange mark-up fees if you use the card within the same currency jurisdiction for which you have loaded the card.

Adhil Shetty, CEO of BankBazaar.com, said, “RuPay cards were designed to cater to the specific needs and preferences of Indian consumers. With the introduction of RuPay Prepaid Forex cards, payment options for Indians travelling abroad have further expanded.”

On the other hand, you must also keep in mind that you will have to pay 20 per cent TCS (tax collected at source) if you spend above Rs 7 lakh at 20 per cent from July 1. Moreover, these cards may charge you for ATM withdrawals and balance enquiries. So, you need to be careful while using a prepaid card abroad. Besides, these cards also have a daily withdrawal limit, so you need to align your spending accordingly.