The illegal practice of swiping card for cash is quite prevalent amongst the trader hubs of India. "Legally, swiping card for cash is not allowed in India unlike in the UK or US. There have been rackets in the past that the police have busted," said Nidhi Gurnani, cofounder of Cardback, an app which advises buyers on their credit card usage. The other reason behind swiping credit cards for fake sales is to earn rewards.
"In accelerated reward point schemes, one can earn up to Rs 1 lakh, on a swipe of Rs 20,000, said Gurnani.
As merchants move to sell online, card for cash model is also moving to ard for cash model is also moving to the online world. "Some ecom merce companies accept digital payments for products but in stead used the cash to run op erations. They don't deliv er on time," Gupta of CitrusPay added.
Not only payment gate ways but mobile wallets have also become extremely cautious. It's eas ier to swipe money from a credit card into a bank account Users are able to withdraw cash from their credit cards at almost 0% in mobile wallets compared to up to 2% they are charged on e-commerce portals. "We allow only Rs 5,000 worth of money to be loaded via a credit card into our mobile wallet. We also take at least 3 days to transfer money to a bank account, to check fraudulent transactions," said Sunil Kulkarni, Deputy Manag ing Director at mobile wal let firm Oxigen Services (India) Pvt Ltd.
About Rs 1800 crore of transactions went through Oxigen last year, of which the company charges 1%, usually from the vendors.
