Letters to Editor
Published Date: 08 December 2015

Response to two articles on international fees on credit card transactions – The Straits Times, 25 and 26 November 2015

8 December 2015

Dear Editor

We refer to the feedback on international fees on credit card transactions, shared by Mr Tay Huay Khoong (“Make merchants pay for currency charges”, 25 November 2015) and Mr Ambar Gupta (“Currency charges for local services unfair”, 26 November 2015).

The imposition of international transaction fees by credit card companies (e.g. MasterCard and Visa) is a global practice and is not unique to Singapore.  An international transaction fee is charged whenever a customer’s credit card payment is processed overseas.  Typically, this happens when a cardholder travels overseas and makes a purchase from an overseas merchant in foreign currency.  The transaction will normally be reflected in the credit card statement in both foreign currency and the equivalent in Singapore Dollars.  The converted amount in Singapore Dollars would include the international transaction fee which could range between 0.8% - 1% of the transaction value. 

Some cardholders have also noticed this fee being applied on online purchases denominated in Singapore Dollars, even when the goods or services are provided in Singapore.  This occurs when merchants use entities outside Singapore instead of banks in Singapore to process their credit card payments.  Cardholders’ payments are routed overseas for processing, thereby incurring an international transaction fee. 

MAS agrees that there should be better transparency on such fees.  MAS is working with the relevant agencies to encourage more prominent disclosures by local merchants, at the point of purchase, should they process their payments overseas.  This will enable consumers to make better informed decisions.  We also encourage consumers to familiarise themselves with such charges via the MoneySENSE website.  Consumers making online credit card purchases are advised to verify with the merchant whether payments are processed overseas and hence whether an additional international transaction fee could apply.   

Bey Mui Leng (Ms)
Director (Corporate Communications)
Monetary Authority of Singapore