You take a forex card from your bank before going abroad, and then much to your distress you fail to initiate the transaction.
“I am in a north African country for some office work and tried to use my bank’s forex card for buying coffee, but the card declined. Then I tried to pay using the same forex card to the taxi driver, but it was declined, too! I am clueless as to why this card was declined, when about a week back in Paris, it was accepted everywhere. Any help will be appreciated,” this is what a hassled traveller wrote in a post on social media asking for any guidance or help in the matter.
Well, things such as this do happen, and so it is important that you keep yourself abreast with proper information on forex cards.
Now with the FIFA 2022 World Cup round the corner, you might in all likelihood be needing a forex card prior to witnessing the spectacle in Qatar later this year
How To Get A Forex Card?
Amitabh Bhatnagar, head, trade and foreign exchange and diplomatic segment, RBL Bank, explains the first question consumers usually ask about forex cards i.e., how to get one?
He says: “A customer can walk into any bank branch to apply for a ‘Multi-Currency Borderless Card’. The documents required are a valid Passport and Visa, and PAN card. Along with these documents, an A2 Form and Issuance Form will be provided by the bank which the customer has to fill and submit.”
As for the limit of balance up to which one can load their forex card, Bhatnagar says: “As per the Liberalised Remittance Scheme of the RBI, up to $2,50,000 equivalent in a financial year can be loaded onto the card.”
But do note that this is the total LRS limit for all types of foreign exchange transactions, such as remittance, and forex currency cash purchase, among others. Thus, this is the shared limit for all the foreign currency transactions.
How To Load Balance In A Forex Card?
Swapnil Bhaskar, head of strategy, Niyo, a digital bank, shared an insight about the working mechanism of loading balance in a forex card.
He says: “It happens (loading of money) during banking working days if you are going through the bank networks. On completion of the process, money is loaded on the card within 24-48 hours.”
There is a slightly different process to follow if you are abroad and want to get your forex card recharged.
“If the customer is abroad, they need to leave a signed copy of the A2 form and authorisation with the family, who would have to submit the form at the bank branch. The money can be loaded through Netbanking, mobile banking, or by depositing cheque at the branch.”
Since the dynamic conversion charge (DCC) mechanism is carried out by third party companies, there are exorbitant exchange rates involved, which range between 3 per cent and 8 per cent. A borderless prepaid forex card is the best option to avoid any such charges or high exchange rates.
Can You Use An International Debit/Credit Card?
You can swipe your international debit/credit cards at a dynamic conversion charges (DCC) point of sale (POS) or ATM machine and receive cash in foreign currency.
But you should keep in mind certain costs that would be levied on such usage.
“This transaction happens in the original currency of the card; INR in case of Indian travellers which can help them to avoid cross currency conversion charges,” adds Bhatnagar.
That said, since this DCC mechanism “is carried out by third party companies, there are exorbitant exchange rates involved, which range between 3 per cent and 8 per cent. A borderless prepaid forex card is the best option to avoid any such charges or high exchange rates,” he further says.
Reason For Forex Card Transaction Getting Declined
There could be a variety of reasons why your forex card might work in some countries and not in others.
Country Specific Restrictions: According to Bhaskar, some countries have been identified as ‘high risk countries’. In these countries, a customer cannot make payment with their cards.
The countries which fall in these categories are: Afghanistan, Libya, Syria, Cuba, Iran, Yemen, Bosnia and Herzegovina, North Korea and others.
According to Bhaskar, one will have to check with his/her respective card issuing bank for the information about the entire list of ‘high risk countries’ where their card will not work, and will have to make arrangements accordingly.
Currency Limits: Bhatnagar says there are bank specific limits on the maximum amount of foreign currency withdrawal in a single day. Generally, it is $1,500 or equivalent in cash through an ATM. For PoS machines or online transactions, the limits are up to $15,000 in a single day.
Damaged Cards: There is a remedy in place in case your card gets so damaged that machines cannot read it, and consequently, it is declined.
Says Bhaskar: “The welcome kit contains two cards. “If the primary card is lost, customers can get the replacement card activated and transfer funds in that card.”
According to Bhatnagar, in case a customer damages his/her card or loses it, then he/she should call the helpline and block it immediately. Depending on the location, a replacement card will be couriered to him/her, he says.