Forex agents push for prepaid cards.

​CHENNAI: With the rupee at an 11-month low against the dollar, forex dealers and tour operators are aggressively marketing prepaid travel cards in place of buying and selling of foreign currency for overseas travel. "With exchange rate fluctuation persisting, it just doesn't make sense to buy and sell foreign currency for overseas travel at this juncture," Guru Prasad, executive director, Centrum Direct said.

The company, which has a prepaid travel card offering in nine currencies, plans to add another three more currencies within the next fortnight. This includes the Thai baht, the Malaysian ringgit and the UAE dirham.Similarly, Thomas Cook (India) is pushing its borderless prepaid card offering. This is a multi-currency card that enables the card holder to load up to eight global currencies. "It saves on cross currency exchange charges or the tension of carrying money," Mahesh Iyer, senior vice-president and head, foreign exchange, Thomas Cook (India) said. The card has acceptance at over 34.3 million merchant establishments and two million ATMs.

Industry observers say a switchover to prepaid cards at the prevailing rates makes sense, more so in the current environment as the forex market in India has always witnessed acute competition. Sometimes, that goes down to the paisa level. "At today's rates, if one dealer is offering Rs 56.80 to the dollar, another may lure the customer at Rs 56.50 to a dollar," MK Ajit Kumar, chief executive officer, Asia Pacific Tours said. As per industry estimates, a family of four which travels abroad normally spends anywhere between $1,000 to $2,000 dollars on such trips.

Assuming that a family wants $1,000 for a trip to Thailand, they would end up getting a better deal with the second agent as they would have to part with Rs 56,500 as against Rs 56,800 with the first agent. And that assumes importance because as per Reserve Bank of India guidelines, an Indian is permitted to take up to $10,000 dollars a year for leisure trips and up to $25,000 dollars for business trips. So the higher the amount of dollars to be converted, every paisa begins to count. The rupee closed at Rs 56.84 against the dollar on Wednesday.

Centrum is also in the process of introducing a multi-currency card (that can load up to ten currencies). "The inbuilt system recognises the destination and dispenses the local currency when swiped at ATMs or other POS (point of sale terminals)," Prasad said.

Source : timesofindia.indiatimes.com