Unpacking Niyo Solutions’ zero foreign exchange markup playing cards

In any case, by signing up with Niyo, you open an everyday financial savings account with one of many associate banks. For a debit card, it’s important to open a zero stability financial savings account with both Equitas or DCB Bank, whereas its bank cards are issued in partnership with SBM financial institution. For the pay as you go playing cards, it has a tie up with YES Bank.

Niyo facilitates the applying course of and allows you to financial institution by means of its cellular app. “All the financial savings account features {that a} buyer can do with a financial institution could be accomplished with Niyo as effectively. We, as a tech firm, make the banking expertise higher by means of our cellular utility with superior person interface,” mentioned Vinay Bagri, co-founder and CEO, NiYo. To make sure, you’ll be able to function the identical financial savings account by means of the associate financial institution’s netbanking service and by visiting the financial institution department.

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Graphic: Mint

Next, you get a debit or bank card linked to this financial savings account. The bank card, nonetheless, is a secured card. To make sure, secured playing cards can solely be taken towards a set deposit (FD). The credit score restrict is the same as the FD quantity. If the client defaults on invoice funds, the cardboard is blocked and the FD is used to settle the excellent invoice. The card is unblocked solely after the client pledges a recent FD of your complete quantity.

Most importantly, the bank card is issued solely to passport holders. “Currently, bank cards are supplied solely underneath our Niyo Global programme,” mentioned Bagri.

Niyo’s flagship product is the Niyo Global card supplied as each debit and bank cards. In this story, Mint breaks down the salient options that can assist you determine whether or not you need to get it.

Niyo Global

This is a journey card that’s supplied each as a debit and bank card. Do observe that it’s not a pay as you go foreign exchange card.

The bank card is obtainable in affiliation with SBM financial institution. “We began providing bank cards in January this 12 months and the reward system was launched in July,” mentioned Bagri.

Note that the Reserve Bank of India (RBI) has barred SBM financial institution from transactions underneath the Liberalised Remittance Scheme (LRS). This means for those who open an account with SBM financial institution, worldwide transactions accomplished with debit card is not going to get by means of. “Domestic transactions with debit card and worldwide funds made with bank card will work,” mentioned Bagri.

Reward programmes can be found with each the debit and bank card. The secured bank cards have a reward fee of 1%, which suggests you earn ₹1 on each ₹100 spent. The rewards are credited within the type of ‘global coins’, with every coin valued at 10 paise. The reward fee on debit card transactions is 0.2%, which suggests each ₹100 spent earns you 20 paise or 2 international cash. These reward charges apply to home transactions. As for worldwide transactions, debit playing cards don’t earn something whereas the reward fee on bank cards is 0.2%.

A buyer can earn international cash on all home transactions, besides on gas fees and lease funds. The cash get collected within the Niyo account and could be redeemed in your purchases made with Niyo card after incomes a minimal ₹100 price of cash (1,000 cash). “Once you’ve 1,000 cash, ₹100 is robotically redeemed from international cash on the following buy that you simply make,” Bagri defined. Global cash could be redeemed on each home and worldwide transactions.

Compared to the trade common, the reward fee on Niyo Global playing cards is low. However, the reward system is just not the most important pull in Niyo’s case as its distinctive promoting level is that it’s a zero foreign exchange mark-up card. A foreign exchange markup is the price {that a} financial institution or bank card firm fees for enabling worldwide transactions on their card.

“We don’t provide rewards on worldwide transactions as a result of we’ve got waived off the markup price,” mentioned Bagri. Most banks cost foreign exchange markup on worldwide funds accomplished with credit score and debit playing cards but in addition provide rewards on bank card transactions, which can partially or totally offset the foreign exchange markup. For occasion, on a bank card that earns 2% cashback for worldwide funds and fees 2.5% foreign exchange markup, you’ll primarily pay 0.5% in foreign exchange markup price.

In a zero foreign exchange markup card, the foreign exchange markup charged by the financial institution is waived off, however the markup levied by the funds community is charged to the client. “It’s miniscule, at 20-50 paise. Banks cost about 2.5-3.5% foreign exchange mark-up however we’ve got waived that off,” mentioned Bagri.

There are a couple of zero mark-up debit and bank cards out there out there and Niyo scores over these choices. For occasion, debit playing cards supplied by Induslnd financial institution can be found just for members of its premium banking programmes— Exclusive (minimal ₹1.25 lakh wage or financial savings account stability of ₹1 lakh) and Pioneer (a web relationship worth of ₹30 lakh is required). Niyo enables you to open zero stability financial savings accounts.

Other fintech corporations, together with Jupiter and Fi, have comparatively lenient standards on their zero foreign exchange markup debit playing cards. In the case of Fi, accounts that require ₹10,000 minimal stability are supplied zero foreign exchange markup of as much as ₹50,000 month-to-month spends, and people with ₹50,000 minimal stability requirement get zero foreign exchange price on all spends. When these situations are usually not met, Fi fees 2.5% foreign exchange mark-up. Jupiter affords zero foreign exchange markup on ₹25,000 and ₹1 lakh month-to-month spends on non-salary and wage accounts, respectively.

As for zero foreign exchange mark-up bank cards, IDFC First Wow is a secured card, like Niyo. RBL Bank World Safari is an unsecured bank card however fees an annual price of ₹3,000.

Niyo Global playing cards are a superb fee choice for individuals who journey abroad steadily and for college kids finding out exterior India. Sumanta Mandal, founder, Technofino, a digital platform specializing in reviewing bank cards and different banking merchandise, mentioned “For bank card customers, it’s a superb backup card for situations when one must withdraw money from an ATM. For those that don’t use bank cards, Niyo Global could be their primary card for overseas spends.” ATM withdrawal with a Niyo Global card is charged a price, which is determined by the associate financial institution.

Bagri informed Mint that Niyo will launch its first unsecured bank card in partnership with Federal Bank in October.

Niyo Solutions claims that it has issued about 1.5 million Niyo Global playing cards up to now, out of which about 1 million cardholders have an lively account with stability within the financial savings checking account.