Digital Daaroo - by Saurabh Nanda: February 2010

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!