Why are international transaction fees more expensive?

Where a transaction is categorised as an international, or cross-border transaction, the fees it attracts to process are higher compared to a domestic transaction.

Domestic transaction: where a merchant in one country, accepts payment from a customer whose card originates from the same country.

International transaction: where a merchant in one country, accepts payment from a customer whose card originates from another country.

International transactions attract a cross-border fee, which is determined by the card schemes (Visa, Mastercard, American Express), rather than the merchant’s card processor. Further to this, the interchange fee from the customer’s card issuing bank (also determined by the card schemes) attracts a higher fee due to being cross-border.

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