Amex Cards-Any International Merchant Fee, if Purchase Stated in AUD? (like Citibank CC's New Charge)

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  geek001 on 22/07/2016 - 15:32

  +1

  Yea, this is a tough one. I think Visa and Mastercard both also charges overseas merchant fees of about 3% altogether. Could be less if denominated in AUD. Your post prompted me to check my Citibank Visa Debit card account. Seems like there is no overseas merchant fees on my account still.. phew.. or did you mean Citibank credit cards? Cos my citibank debit card is basically my overseas buying card to avoid transaction fees.

  Edit: Sorry.. forgot to answer your question, yes, my Amex card charges overseas merchant fees. https://www.americanexpress.com/au/content/credit-know-how/c…

  • 

    bluesky on 22/07/2016 - 15:39

    Oh I mean the Citibank Credit Card (thanks, I have amended post). Using Citiplus debit card would definitely not have any fees. Like 28 degrees, there are no foreign fees of whatsoever kind.

    I prefer to use a credit, instead of a debit card. So I use the 28 Degrees at the moment whenever in doubt. But 28 Degrees, like Citibank, have also started to add annoying "enhancements", like charging 95c for the privilege of paying one's card.

    So, if Amex do not charge this fee (plus I get to earn reward points), I will go with Amex instead.

    • 

      geek001 on 22/07/2016 - 15:49

      +1

      Yea, I prefer to use credit card too if given the choice. Sometimes it is better to use credit card even with the extra 3% fee, eg. flights and car hire for cards with travel insurance and appliances/phones for free extended warranty and price protection.

  • 

    bluesky on 22/07/2016 - 15:58

    Edit: Sorry.. forgot to answer your question, yes, my Amex card charges overseas merchant fees. https://www.americanexpress.com/au/content/credit-know-how/c…

    Thanks for the link. The fee stated is a Current Conversion Fee. This fee is totally understandable, when Amex convert a foreign currency to AUD.

    I guess my question relates to International Merchant Fee. In other words,
    the purchase is AUD denominated. The merchant has set an AUD amount. It is just the merchant being foreign, is all.

    So a slightly different question :-).

    • 

      geek001 on 22/07/2016 - 16:40

      Ok, Catch your drift. My answer is then I don't know. I haven't used my credit card directly to pay for overseas websites in a while. Usually, they take Paypal, which I will never use Paypal currency conversion unless I feel like getting randy. :)

      • 

        bluesky on 22/07/2016 - 16:51

        Yes, all this is rather confusing. I am still trying to understand the ins and outs of it. Thanks.

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  Dacs on 22/07/2016 - 16:09

  +1

  The difficulty with the issue is that you don't know which transactions will cause the DCC fee and which won't. I read somewhere that it gets added to transactions made at Sydney Aquarium which is really something you wouldn't expect.

  I also have the Citibank Visa card and contacted Citibank to ask them how to know if a transaction will have the fee added and they said "Ask the merchant". Yeah no, that's not going to happen. Eric Schmidt is not going to answer your email asking if Google Play uses DCC and the guy at the counter of Sydney Aquarium is not likely to know.

  I now avoid using my Citibank card and use my Amex one wherever possible (except ING card for paywave of course). I haven't seen the charge applied to Amex transactions.

  Edit- You may as well get a free Amex card (Qantas Discovery) if you don't have one or get the Platinum Edge or Velocity Platinum with the specials they have currently.

  • 

    bluesky on 22/07/2016 - 16:17

    Exactly how I feel about this charge, which you can't be sure of, as you can't be expected to know if the merchant is foreign or not. E.g. there would be a reasonable expectation that Microsoft Australia is a local merchant.

    I now avoid using my Citibank card and use my Amex one wherever possible (except ING card for paywave of course). I haven't seen the charge applied to Amex transactions.

    This is good news to me! Thank you :-)
    So I can use my Amex Essential or Discovery without worrying about this fee!

  • 

    bluesky on 22/07/2016 - 16:37

    Hi Dacs,

    I see you mentioned DCC. But is the Citibank International Merchant fee and DCC the same thing?

    According to this article on DCC it is the merchant, or the DCC operator used by the merchant, that gets the fee. Because it is converted to an AUD amount at point of sale. Not by the credit card company.

    What I don't understand is:

    • how come we don't see this fee for some credit cards, even though we are essentially buying from the same merchants, using the same channels (e.g. their website). Wouldn't the DCC operator or the merchant insist on getting this fee, whichever credit card happened to be used?

    • Citibank never used to and started charging the international fee. Surely, Citibank is the one trying to profit from it? If merchant or DCC operator, refer to my above question. Or I am totally off-track :-)

    • 

      Dacs on 22/07/2016 - 16:42

      +1

      My understanding is that the banks say that previously they had to pay the fee but were absorbing it. Now they are passing it on to the customer.
      Here's an article with more info.. To be honest I just skimmed it, but hoping you'll read it thoroughly and make a TL;DR for us :-)

      • 

        bluesky on 22/07/2016 - 16:46

        What you say make sense - Some card companies are footing this DCC fee themselves, if they don't pass it on. And now, some companies like Citibank wants to pass it on.

        Thank you :-), I will have a read of this, and see what I can glean from it. If I find anything interesting, I will post.

• 

  bluesky on 22/07/2016 - 17:10

  So I have read this article, supplied by Dacs above: Banks 'plunder' travellers with forex fees on credit card transactions hoping to understand more about this DCC.

  It looks like the International Merchant fee (as charged by Citibank) is the same as DCC.

  Main points I glean from this article are:

  • the two major card companies Visa and Mastercard do not get a cut of it. I assume this applies to Amex as well, since according to Dacs, he or she has not seen this charge on Amex cards either. Others, please let us know, if you have seen anything contrary.

  • The parties that are likely to take a cut of this DCC are the banks, the merchant, and the DCC operators. So it is likely that Citibank does take a cut of this fee.

  This article does not touch on the circumstances where some cards charge this fee, and others do not, for the same transaction. So, is it:

  (a) the card supplier (e.g. Amex) who absorbs the fee, which is still payable to the merchant/DCC operator ? (Most likely), or

  (b) the merchant and DCC operator, who are willing to forego the fee, depending on the card used?

  Not important, but still good to know.

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  yycan on 22/07/2016 - 20:49

  +1

  I believe Amex only charges international transaction fee when the transaction is in another currency. I don't think they levy a fee for international merchants.

  • 

    bluesky on 22/07/2016 - 20:53

    Thank you! I am pleased with this. I will be using Amex from now on for these kinds of purchases (foreign merchant, but AUD-denominated).