E-wal­lets and pre­paid cards for over­seas trans­ac­tions

Mint Asia ST - - Money - BVY IVINA V ISHWANATHAN

This

month, when the Re­serve Bank of In­dia (RBI) re­leased new guide­lines for e-wal­lets and pre­paid in­stru­ments (PPIS), it al­lowed some e-wal­lets and pre­paid cards to be used for in­ter­na­tional trans­ac­tions. How­ever, there re­main many lim­i­ta­tions.

E-wal­lets that can be used

First, only those e-wal­lets or pre­paid cards can be used for in­ter­na­tional trans­ac­tions that are pro­vided by banks . Also, only semi­closed or open e-wal­lets can be used for cross bor­der trans­ac­tions. Let’s ex­plain them.

Also, if you want to use an e-wal­let for in­ter­na­tional trans­ac­tions, you have to be Know Your Cus­tomer (KYC) com­pli­ant.

Lim­i­ta­tions

While be­ing able to make in­ter­na­tional trans­ac­tions is a con­ve­nience, this fa­cil­ity comes with mul­ti­ple lim­i­ta­tions. The RBI al­lows you to use the card or e-wal­let only for pur­chase of goods and ser­vices. So you can use these to do on­line shop­ping only; you can­not use the e-wal­lets and pre­paid cards to re­mit money to any in­di­vid­ual over­seas. You can­not use these for fund trans­fers or to send money un­der the Lib­er­alised Re­mit­tance Scheme. Also, to be able to use this ser­vice, the e-wal­let or the pre­paid in­stru­ment has to be en­abled with in­ter­na­tional trans­ac­tion fa­cil­ity. For this, as a cus­tomer, you have to re­quest your bank to en­able it.

There are lim­its on the trans­ac­tion amount too. For in­stance, you can­not spend more than Rs10,000 per day and you can spend only up to Rs50,000 per month for do­ing in­ter­na­tional trans­ac­tions.

Since pre­paid in­stru­ments can be of­fered in the form of e-wal­lets or cards, if the bank is pro­vid­ing these pre­paid cards, then it needs to have the Euro­pay, Mastercard and Visa (EMV) chip and needs to be per­sonal iden­ti­fi­ca­tion num­ber (PIN) com­pli­ant.

What it means for the cus­tomers

So far, pre­paid cards and e-wal­lets could not be used for in­ter­na­tional trans­ac­tions, ex­cept in the case of for­eign ex­change pre­paid pay­ment in­stru­ments.

With this move, you will now be able to use your money in the e-wal­let, at least, to pay for on­line pur­chases on in­ter­na­tional web­sites.

This will be use­ful for those who do not want to use their credit or debit card for in­ter­na­tional trans­ac­tions for se­cu­rity rea­sons.

You can now load the re­quired amount in the pre­paid card or your e-wal­let and do the trans­ac­tions with­out ex­pos­ing your bank ac­count or de­plet­ing the credit card’s limit.

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