Thứ Hai, ngày 11 tháng 8 năm 2014

Currency fluctuation can increase cost in overseas card transactions

Your sister is studying in the US and it is her birthday. You order a gift for her from Amazon.com and make a payment in dollars, using your credit card, sitting in India. The internet allows you to do this. On that day, the dollar-rupee exchange rate was 60.95. It takes a couple of days for the transaction to get settled; by then, the dollar-rupee depreciates to 61.21. You have no option but to shell out a bit more money than you had anticipated.



With online shopping becoming popular and people travelling abroad, usage of credit and debit cards for making payments in foreign currency has increased. The exchange rate, though, is only one of the things you need to keep in mind. Let us look at this and some of the others to note in using your card for foreign transactions.



Exchange rate and other charges



“There could be a difference in the exchange rate between the day you do your transaction and the day it is calculated and settled. There is nothing you can do about it,” says Nitish Asthana, general manager, ICICI Merchant Services, a joint venture between ICICI Bank and First Data, providing credit card payment processing services.



However, a lot of merchants offer a facility to pay in the home currency, called Dynamic Currency Conversion. Many duty-free stores at international airports offer this facility, such as in Hong Kong and Singapore. Using this, you can lock in the exchange rate. So, while travelling abroad, look at point of sales (PoS) terminals having this facility.



The foreign currency mark-up charges are as applicable, depending on the specific credit card of the customer. It ranges between two to 3.5 per cent of the transaction value, says Parag Rao, senior executive vice-president, HDFC Bank.



Validity and limit



As a first step, before you swipe your card, check if it is valid for foreign use. Following an increase in card-related frauds, many banks now issue cards valid only for domestic use, as a means of security.



In some cases, they fix a limit for use abroad. So, if you suddenly find your card cannot be used for a transaction above a certain amount, don’t panic. It is probably only a limit set by your bank as a precaution.



“Customers need to ensure that their credit card is enabled for international usage. You can either call-in to our phone banking or log-in to net banking to enable or change this facility,” says Rao. Check with your bank if the card can be used overseas and, if so, the limit. If you feel the need, you can ask for a temporary increase in the limit.



“Magstrip cards are generally domestic cards only and can be converted to international ones on the request of the customer. Chip and PIN cards are more secure, as international usage is enabled automatically. That’s the norm followed by most banks today,” says Asthana.



While Visa and MasterCard are valid across all merchants globally, even RuPay cards are valid abroad, following its tie-up with Discover. But make sure to verify before you travel.



EMV card



The PIN is a requirement only in some countries, which have migrated to the EMV (Europay, MasterCard and Visa) technology.



While swiping your card, the PIN will be asked only in these countries and not others. So, you might find that your international card, which requires a PIN while using in India, might not require one in some foreign countries. It is advisable to use your card at an EMV-compliant PoS terminal.



Many countries have made PIN entry mandatory for Chip and PIN credit cards. However, in America, credit card transactions are normal swipe ones and no PIN is required, whereas customers normally do have to use their PIN for debit card transactions. In Britain, PIN transactions are a must for Chip plus PIN credit cards. Many countries in central Europe and now in Southeast Asia insist on the PIN usage for Chip and PIN credit cards.



Unlike websites in India, where card usage requires either a one-time PIN (OTP) or an IPIN, this is not true for foreign websites. However, some websites abroad have begun requiring an additional factor of authentication (such as an OTP).



“Consumers should be careful when using their card on an international website, ensuring it is used only on reputable ones, which have the relevant levels of security protocols to protect card data. Also ensure your virus protection software is updated and that your browser’ caches are always cleared,” says Muge Yuzuak, head of cards and personal loans, Citibank India.



Disputed charge or fraud



If there is a disputed charge or a fraudulent charge, you have to report back to your issuing bank, which will in turn follow up with the merchant bank of that country. Once you lodge a complaint and it is proved that the fraud occurred in a transaction where there was no PIN, your bank will reverse the charge. You have to fill a dispute form and email it to the bank and also deposit it in a branch of your bank abroad.



“There is a window of seven to 45 days for the bank to reverse the charge. The window to report the fraud is six months but don’t wait that long. Do it as soon as you discover the fraud,” Asthana advises.



RISE IN FOREIGN TRANSACTIONS

  • With online shopping becoming popular and people travelling abroad, usage of credit and debit cards for making payments in foreign currency has increased

     


  • The foreign currency mark-up charges are as applicable, depending on the specific credit card of the customer. It ranges between two to 3.5 per cent of the transaction value

     


  • Following an increase in card-related frauds, many banks now issue cards valid only for domestic use, as a means of security


Currency fluctuation can increase cost in overseas card transactions

Không có nhận xét nào:

Đăng nhận xét