Have you considered the possibility the transaction is from an identity theft account rather than your own?
It is common for new setups to charge very small amounts to validate accounts, but they usually cancel those charges overtly or through allowing them to time-out. They test the validity of the account and identity thieves will go dormant for months, and then go for larger amounts. It is worth keeping your eyes on it, as you have been.
As for transaction fees, those are with the bank not the merchants as @phb indicated. There may be more going on than is obvious to date. That being written my multiple banks show foreign transaction fees differently. One explicitly shows them as being part of the charge but not how much, and the other provides the amount as its own line item.
That is without context for me other than there seems to be ‘a problem’; I never dealt with nor paid any attention to Spotify or most other similar ‘services’, and I’ll accept you are on top of it. Re potential ID theft, I posed it as a what-if in case you had not considered it, as well as how banks usually show their foreign transaction fees when applied. FWIW there was another poster who had a bill processed in Ireland, once off rather than processed on-shore, that showed as [paypal] GBR that was hit for an offshore processing fee, but from recollection the fee was so shown on his statement.
For the third time, the ANZ bank has charged me an overseas TXN fee on a transaction that was made on an account that supposedly has no charges for currency conversions. This time it was only a charge of 45 cents (making it not worth the effort of complaining), but the previous two times it was more substantial and warranted a call. Both of those charges were reversed, and the reason they gave for the charge being made in the first place was that the transaction had been ‘processed overseas’. I wonder if that’s because they’ve shifted services overseas themselves. So much for no fees on international transactions! I wonder how many others are being charged this fee.
PhilT you’re right. The transaction fee is the result of the transaction being processed offshore. What of course should be done is that the vendor/website must make clear when it lists its price that say 3% or 5% more will be added to the bill to cover the so called “foreign exchange fee”.
In the interim I suggest folk use a debit card from a bank that waives these unjust fees.
Update
There are banks that offer transaction accounts with no “foreign exchange fees”. So how do they make money from a customer? One way is to give a dud exchange rate.
I recall years ago one bank debited me according to Visa’s exchange rate which was close to the “real” exchange rate offered by say Bloomberg.com
It then creamed 3% of the AUD amount as “foreign exchange fees”.
My new bank has no line item on my statement showing any “foreign exchange fees”, but a few days ago when I bought an item for AUD/USD “real rate” was 0.721. My USD denominated transaction had the rate of 0.711 applied.
So as I see it, “no” foreign transaction fees really means lower OVERALL fees than the next bank.
Australian banks are notorious for providing very poor exchange rates in both directions.
Buying $USD is most likely to be around the minimum (worst) rate, noting rates change by the second +/-. My fee free accounts rate has always been the Visa/Mastercard rate of the day/moment. Another topic you might be interested in is
The credit card we use for travelling provides the same exchange rate as our debit card (same card company, just two different issuers). We have found this out by using both cards on the same day were the same rates have applied. Where the difference did occur is the cost to withdraw foreign cash. The foreign exchange free credit card had (cash advance) fees greater than the debit card foreign transaction fees.
So, if we do need a small amount of foreign cash withdrawal from an ATM when travelling, we use the debit card with foreign exchange fees in preference to the credit card which has a high transaction fee. If we do direct transactions with the retailer/ we use the fee free credit card. It pays to work best use of cards when travelling to reduce fees.
They do make money from customers…they assume that many purchases will become credit and subject to interest on the amount accrued onto the cards. While some may pay off their credit cards off in full, many don’t.
True, published rates are for say $1m AUD and above. But that was what happened in the past, I was given Visa card’s rate which approximated the published rates and the was slugged by the 3%.
Nowadays I go to Bloomberg to see the published or real rates and compare that to what I am presently charged.
Good info, thanks.IMHO the worst of all worlds is the travel card issued by many banks, whose rates in my experience only get worse every time I topped it up. That is transferred AUD in order to have GBP on the card to spend while in the UK.
We had boxes shipped by sea from the UK to AUS - with SevenSeasWorldwide. We paid for the shipping costs in GBP with a UK credit card - no issue. They did tell us that we would be up for (extra) A$ charge when the boxes are cleared by customs. When we got the invoice (in A$) we decided to pay it with our AUS credit card. However, our payment was rejected because we have a ‘lock’ on this
AUS credit card for international payments. This caused us to suspect that the transaction was being processed overseas! We had to pay the A$ invoice for custom clearance with another AUS credit card (with no lock on international transactions) and were charged a processing fee
xe.com is a good place to find out the real exchange rate.
Ebay, Paypal and visa exchange rates are ~4c lower than the real exchange rate when paying in USD. The exact amount you lose in a transaction can vary a lot depending on the currency you are purchasing… and what other costs you incur along the way?
Another way to find out what you’re really paying is to compare the rate Wise.com offers you. They were the only money transfer service that declared the true cost of a transaction.
You make some good points. Regardless of the difference if any between credit and debit cards regarding foreign transactions, be sure NOT to use a debit card when checking into a hotel as clawing back illegal or unjustified debits to a debit card is much harder than clawing back amounts unjustly debited to a credit card.
There isn’t any difference between the major debit/credit card issuers used by financial institutions in Australia (Visa, Mastercard etc). They provide the same protections for credit and debit cards…
If it is a bank issued eftpos card (I am not sure if many banks issues these anymore as most have moved to Visa/Mastercard debit cards), then there won’t be the same level of protections in place like that outlined above.
While the protection may be the same these days, the time between when one’s [transaction] account is preauthorised or debited could be important.
An illegal, unjustified, or unexpected debit could tie up funds until resolved, or just until a dispute was lodged, but either way those funds are not available for the time in between that could be minutes or days or longer.
The same hold or charge on a credit card is usually more annoyance and angst excepting when one holds a balance close to the credit limit so the holder does not have much flexibility.
Credit and debit payments are different. One can’t use a debit card is there is insufficient funds in an account to cover the costs of a transaction. One can use credit to make purchases (money not needed in an account to cover the purchase) up to the credit limit applied to the account.
Likewise, for refunds/reimbursements, these only occur in a debit card account on finalisation of the investigation of the dispute to determine is a refund/reimbursement is required. Until such time, the money can’t be spent as it would have already been removed from the account. Credit cards are different as while the money has been spent, it hasn’t been paid for by the card holder.
Credit cards are similar as they will appear on credit card statements and classed as a purchase accruing interest etc. They also impact on the credit limit. When the dispute is resolved in the favour of the card holder, funds will be permanently credited to the credit card account See:
For protections and time to resolve, there is no difference between debit and credit cards. It is taken as a payment until such time the dispute is resolved. For pre-authorisations, the processes are same except…the funds either are a hold against the credit limit or against funds available in a bank account. These funds don’t become available until such time that the pre-authorisation is removed.
The difference lies with bank issued eftpos type cards.
Looking at the mastercard link you provided, I read:
Have peace of mind knowing that the financial institution that issued your Mastercard won’t hold you responsible for “unauthorised transactions.” As a Mastercard cardholder, Zero Liability applies to your purchases made in the store, over the telephone, online, or via a mobile device and ATM transactions. As a cardholder, you will not be held responsible for unauthorised transactions if:
You have used reasonable care in protecting your card from loss or theft; and
You promptly reported loss or theft to your financial institution.
Maybe I can’t see it, but as I read it, handing over a card when checking into a hotel does not fall into either categories of taking reasonable care or losing the card.
My concern is that a hotel say charging me for damaging a TV could debit my debit card or my credit card and that it would be hard either way to reverse the debit.
i have not read the information at the link you offered in great detail, but can say that a couple of years ago when I was mugged in Malaysia and the so-and-sos took my wallet, they helped themselves to my visa credit card (issued by one bank) and a visa debit card (issued by another bank).
The former was recognised when I called Visa Int’l to cancel it. The latter was not recognised by Visa Int’l as it was not considered their product, but a product of my bank and subject to my bank’s T&Cs. At that time, the two cards had different T&Cs. Maybe things have improved since then.
I will look at the link in more detail, thanks.
You have authorised such charges when checking in or agreeing to the booking terms and conditions. Most professional accommodation providers will state that a guest is responsible for damage and will be charged costs to rectify. Booking platforms also have standard damage terms such as this one.
You won’t be able to reverse the payment for the damage caused.
One can report and card (all visa cardholders which includes debit or credit) loss direct to visa or the card issuer…
