Soon, international travellers will have an option to carry Rupay prepaid forex cards. The Reserve Bank of India Governor Shaktikanta Das in the Monetary Policy Committee meeting briefing said RuPay debit and credit cards issued by banks in India are gaining international acceptance and the central bank has decided to permit issuance of RuPay prepaid forex cards by the banks.
“The permission granted to banks for issuing RuPay prepaid forex cards opens up new avenues for seamless and flexible cross-border transactions,” says Rajsri Rengan, India Head of Development, Banking and Payments, at FIS. She adds, this development brings forth enhanced convenience and efficiency for individuals and businesses engaged in international trade.
Benefits to card users
With the introduction of RuPay Prepaid Forex cards, payment options for Indians travelling abroad have further expanded. These cards can be used at ATMs, PoS machines, and online merchants overseas.
“Moreover, with RuPay debit, credit, and prepaid cards for international use enabled for issuance in foreign jurisdictions, the competitiveness of RuPay as a viable payment option will be consolidated further,” says Adhil Shetty, CEO of BankBazaar.com.
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The rise of RuPay cards
RuPay is a product of NPCI, the organisation that powers retail payments in the country. The provision under the Payment and Settlement Systems Act, 2007, empowered the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) to create a secure electronic payment and settlement system in India.
The launch of RuPay cards aligned with India's vision of creating a more inclusive and self-reliant financial system while promoting digital payments and boosting domestic economic growth.
RuPay in the last seven years has launched various card variants catering to the different segments of the society. In addition to the government scheme cards, RuPay classic, platinum, and select variant cards are designed for the masses and affluent customers.
“RuPay cards were designed to cater to the specific needs and preferences of Indian consumers,” says Shetty. He adds, RuPay has made significant strides in establishing itself as a credible alternative, particularly within the Indian market. Over the years, the acceptance of RuPay cards has expanded significantly, and it has now gained acceptance at many international locations as well.
“At the moment, Rupay cards are currently only available for domestic usage and in nations with whom India has a mutually beneficial agreement,” says Ashish Aggarwal, Managing Director at Acube Ventures Global Private firm. Some of these foreign countries where Rupay debit and credit cards can be used at present due to mutual agreements are Bhutan, Singapore, Nepal, and the UAE without co-branding with other international cards.
Does 20 percent tax collection at source (TCS) apply on forex cards?
From July 1, 20 percent of TCS will be collected on debit and credit card spends abroad. TCS will apply only beyond the Rs 7 lakh limit. But there is no minimum threshold limit specified for forex cards – this is an area that needs clarification from the Union Government.
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