Credit cards generally come with large limits, usually of Rs 1 lakh or more. But what if you want a much smaller limit on your card? You could use a debit card and spend only as much money you actually have. But, there is a danger of exhausting your bank balance, if you aren’t too careful. What’s the way out? Enter prepaid cards. In December 2019, the Reserve Bank of India (RBI) allowed prepaid payment instruments (PPIs) to be launched.
Transcorp International has rolled out a prepaid card. This Rupay enabled prepaid card allows users to pay utility bills, make purchases at food outlets, shop online, swipe at point of sale (POS) terminals, etc.
What’s on offer?
You must load your card with cash, by transferring it from your bank account. A maximum top-up of Rs 1 lakh is allowed to those who have done their full Know-Your-Customer (KYC) verification. You need to submit valid proofs of identity and address, and get an in-person verification done. You can also do a minimum-KYC by avoiding the in-person verification but here you get to load only Rs 10,000 per month.
You can apply for this card from 40 branches of Transcorp, 700 State Bank of India kiosks and over 5000 Transcash outlets in India. You can even apply for this prepaid card from your employer if it has partnered with Transcorp as part of the payment (remuneration) program. If your employer has tied up to provide you this card, then it works like a Sodexo card that many salaried take from their employers; you could use the card for your meal purchases as well as to shop for food and grocery items.
The company has different variants of this prepaid card, which cost in the range of Rs 100- 200.
The card can be reloaded through the net banking and UPI options on the Transcash mobile app. However, the balance in the card cannot exceed Rs 1 lakh at any given point of time. In case the card is issued by your employer then only your company can load the balance on this card. This prepaid card can be used for making payments in Indian Rupees (INR) only in India.
Ayan Agarwal, Vice President-Payment Systems, Transcorp says, “Prepaid cards are the safest methods of transacting, as the liability is limited to the balance of the card as opposed to one’s entire bank account linked with debit card or entire limit of credit card.” Also, it comes with a PIN and one-time password (OTP). These are sent to the registered mobile number for all merchant based transactions and online purchases.
In case the card is lost, you can report it to the branch or customer care (email / call centre) and a replacement card can be requested. A replacement card will be issued, and the balance amount will be transferred to the replacement card.
Contactless usage on this prepaid card is limited to Rs 2,000 per transaction, according to RBI guidelines; for regular and online transactions, the limit is Rs 1 lakh. The cardholders are also secured with an insurance cover as an additional benefit. Sapna Tiwari, Co-founder and COO, Rupeewiz Investment Advisors says, “These measures ensure that the user’s funds on the prepaid card and personal data linked are not compromised."
The prepaid meal card issued by your employer will give you tax benefits. For instance, if your employer loads up to Rs 2500 per month on your prepaid meal card, it becomes a non-taxable income for an employee as per the income tax act. This amount can be spent only for purchases of food and beverages from e-commerce websites and shops accepting the card.
Transcorp is not liable to pay any interest on the balance outstanding in the prepaid card at any point in time. “You shouldn’t maintain a balance of more than three months’ expenditure on such prepaid cards. Use the balance on this prepaid card while shopping or paying utility bills on priority,” says Ashish Apte, CEO at AAA ResearchOne Financial Consultants.
Also, the user has to utilise the balance amount on the prepaid card within the validity period of four years. In case it lapses, then the outstanding balance on the prepaid card will be transferred for compliance into a separate fund categorised by the company as per the regulatory guidelines. Tiwari says, “The procedure for claiming this outstanding amount from the separate fund after expiry of the card will be a tedious and long process.”
International transactions are not allowed with the card.
In case your employer issues this prepaid meal card, apply for it and claim tax benefits as explained above. Use this card for the purchase of food and beverages.
If you are the sort who has difficulties in keeping a definite check on your expenses and at the same time don’t want to risk wiping out your entire bank balance through a debit card, then such prepaid cards are for you. You should load the balance as per your monthly requirement.