Saturday, February 20, 2010

RBI 3D-Secure mess -- Credit cards forcing people to pay foreign currency transaction charges

Recently, I was trying to book a hotel through Agoda.com and the payment was consistently failing on my HDFC Bank credit card. I had faced this issue with other international sites earlier, but switching to my (secondary) SBI credit card allowed me to get the job done. In this instance, however, even SBI wasn't able to fix the situation.

I called up the HDFC Bank call center and explained the issue to them. They gave me the standard BS of "something must be wrong in the system, please try again after some time." I insisted that the issue was at their end and threw some payment jargon to prove my point -- I know a fair bit of the payment card industry internals and the complete mess that the RBI 3d-secure mandate is. The fellow tells me that the only way the transaction can go through is, if I select a non-INR currency on the website. Truly WTF! I bit the bullet and paid in Thai Baht, but was hit by a foreign currency transaction charges @ 3.5% of the transaction value -- as expected.

And now I'm pissed.

If Agoda (or PayPal) has the ability to charge my card in INR, why the fuck is my bank forcing me to pay in a foreign currency? You know why? Because from Day One the RBI 3D-secure mandate has not clarified what would happen if a card issued in India is charged by a non-VBV enabled merchant based out of India. And banks are doing what they do best -- slapping people with unnecessary charges.

[1] Btw, Agoda.com highly recommended for hotel deals in Thailand. Best rates!

11 comments:

  1. I had come across the same problem. Can't explain how pissed off I am because I need to pay a lot in forreign currencies.

    I can recommend you 2 things.

    1. Use AMEX if you can. They are the only credit/charge card company in India who KNOWS what they speak of and how cards should operate.

    2. Get a NRE account from HSBC and they would provide you a way to pay in Dollars.

    Subhro

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  2. @Subhro: Does Amex have a card which is free for life?

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  3. ICICIBank offers AMEX Green credit card, possibly free for life.

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  4. Please take a look at this proposal:

    http://www.paymentseal.com

    It provides more protection for card holders without requiring registration and passwords. At the same time making the merchant PCI-Compliant.

    ReplyDelete
  5. Here is lots of useful information about Bad Credit Credit Cards also you can directly apply for prepaid mastercard, credit cards and debit cards.

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  6. Hey that's not fair. How can the people force the credit card holder to pay foreign currency? This is very much ridiculous. Severe action must be taken against them.

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  7. 3D Secure authentication requires and password or code called an IPIN, or 3D Secure IPIN. Well the RBI notification concerns cards issued within India only.

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  8. I would rather consider a prepaid mastercard travelcard from specialist fx providers which would mean that the fx rate would typically be much better than the high street or the market and some of these prepaid cards also offer free ATM cards.

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  9. Nice information and help me so must and you can follow my blog about secured credit cards

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  10. You said that you know a fair bit of the payment card industry internals but you don't know that there a rule that if the gateway cannot process 3D secure transactions, they cannot process your payment in INR.

    And in India, Paypal doesn't support 3D secure.

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  11. @Anonymous -- where can I read about said rule? (cannot charge card in INR if you can't process 3d-secure transactions)

    ReplyDelete