Buying goods from around the world is now easier than ever before. But we’re also seeing an increase in international transaction fees appearing on bank statements, with no explanation of what they’re for.
We’re often asked about these fees, and wanted provide some clarity around what they are, where they come from, and what the deal is.
What is an international transaction fee?
With every foreign currency transaction, you may see an additional fee on top of the amount charged. This ‘international transaction fee’ is imposed by the credit card provider, and not related to the merchant accepting the payment.
Depending on the card issuer’s policy, the fee may be a percentage of the transaction amount, or a flat per-transaction rate.
Why not mention this up front?
This is a tricky one — for us and for you. There are currently no industry standards governing international transaction fees. And with the plethora of credit card providers out there, each with their own policies, it’s impossible for us to detail what you or your customers should expect.
For example, shoppers with credit cards issued by the big four banks here in Australia charge a fee for international transactions. But over the road in New Zealand, none of the banks charge. This is an unpredictable, inconsistent area of the global finance industry.
It’s also beyond our control, and yours. International transaction terms and charges all come down to the relationship between your customer and their card provider.
What can I do to notify my customers?
These fees aren’t usually a concern for merchants. Most savvy shoppers today are familiar with extra charges coming from financial institutions.
But if customers are asking about this, we recommend including a note on the payment confirmation page of your checkout process letting them know foreign currency transactions may incur a fee from their card issuer.
For more information, check out this article that provides more details on foreign currency transaction fees. If your customers would like more specific information, they will be able to find this on their card issuer’s website.