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BANGKOK 23 January 2019 23:12
4MyEgo

How to find out if banks charge a 5% surcharge on Visa Debit cards

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I have both a Visa debit card with SCB and one from ING bank from my home country.

 

As far as I know Visa does not apply any charges to my Visa debit cards, i.e. both my SCB and ING Visa debit cards and depending where I am looking to purchase items on the card, I am told there is a 5% charge which is ridiculous.

 

Can anyone explain to me if this is just pure Thai ignorance on the difference between a debit and a credit card, i.e. seeing the same as one and just wanting to apply a 5% charge on my ING card.

 

I have been told there is no charge on my SCB Visa debit card, but there would be a 5% charge on my ING Visa debit card.

 

Recently I purchased some things for my car and was told that a 5% surcharge would be applied until  argued the fact that there was no charge, they took my card, went away and came back and said yes no charge.

 

So my question is, why the discrepancies and how can I find out for certain that banks in Thailand charge 5% on overseas Visa debit cards or are the stores staff ill informed and the 5% goes to the stores ?

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2 hours ago, Pib said:

Who told you there were 5% fees?  I'm sure SCB or ING didn't tell you that.

 

To determine what foreign transaction fee your ING may charge go to their web and review the card's fees.

 

Within Thailand there would be no foreign transaction fee when purchasing something with your SCB debit card.  However, if outside of Thailand the a 2.5% foreign transaction fee would apply.  And online purchase from a foreign website would incur the foreign transaction fee also.

 

Now do not confuse a "merchant surcharge" for using a debit/credit card with a "foreign transaction fee" your card may charge.  Many card-issuing bank have foreign transaction fees in the 1 to 3% ballpark range.

Not uncommon for some small merchants who want to charge around a 3% surcharge fee if you want to pay using a "foreign" debit/credit card and that merchant is trying to offset the transaction fee he gets charged from Visa/Mastercard.  A few even want to apply a surcharge for Thai debit/credit cards.

 

Some merchants are simply greedy....don't want to incur any debit/credit card charges....they want to pass those fees to you.

 

So, yes, between a possible merchant surcharge applied by the merchant and a foreign transaction fee applied by your card-issuing bank those two fees could be around 5%.  

 

Thanks Pib

 

This is where the confusion is, ING Bank have advised me that they do not charge oversees banks for any purchasers that I make on my Visa debit card, what the banks charge overseas is up to them as they have no control over them, obviously.

 

Visa have also advised me that they do not charge merchants a merchants fee on debit cards for any purchasers I make on my Visa debit card, call it the 5% fee if you like that I keep getting told by Thai businesses, Visa advised that they only apply the exchange rate, however if it is a credit card they apply the merchants fee, why, I have no idea as I do not own a credit card.

 

The above said, ING Bank have advised me that a 2.5% overseas transaction fee applies on overseas purchasers which I knew of course, and yes this would apply to SCB Bank as well, that said if I fit into ING Banks criteria re-making so many purchases in any month, the following months 2.5% overseas transaction fee is waived on all purchases for that month.

 

So I am still at a loss to understand if the merchants are trying to pull a fast one over me, with them saying that their banks here in Thailand are charging them the 5% surcharge for my purchase, or is it all BS, because as I said, ING Bank and Visa have stated that they do not charge my Visa debit card anything, so why are the Thai (alleged) banks charging their merchants, that is; if they are, and the merchants trying to pass this onto me, i.e. a 5% surcharge "for using my own money", if the banks are, "it's wrong", and any Thai business that tries to re-coupe that fee from me will be at a loss from me.

 

Would just love to see something in writing from a Thai bank where it says they will charge a merchant a fee for an international Visa debit card, and if I see it, that's between the business and the bank, not me, suffice to say the car parts that I purchased cost almost 20,000 baht, and if the retailer tried to stick to his guns and charge me the 5%, that's 1,000 baht for using my Visa card, his profit would have been down for that month as I wouldn't wear it, just saying.

 

 

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An "interchange fee" applies to all debit/credit card transactions.  You can google "interchange fee" and probably end up a Visa and Mastercard website talking about it.  Here's a starter site for you talking what an interchange fee is.  https://en.wikipedia.org/wiki/Interchange_fee 

 

But basically what an interchange fee is a feel paid between the merchant/his local processing bank, the card-network, and card-issuing bank.  The fee amount varies depending on product/service being bought and whether it's a domestic or international transaction.  But typically the interchange fee ranges in the 1 to 3% ballpark.   

 

This fee is "not" charged directly to you....it's a fee strictly between banks and the card network.   But the bulk of this interchange fee ultimately comes out of the merchant's pocket. 

 

Let's say an interchange fee turns out to be 2.5%....this means for a 100 baht sale the merchant ultimately only gets paid 97.5 baht....the 2.5 baht is an interchange fee that the banksters get with the banksters being the merchant's local processing bank, the card network (i.e., Visa, Mastercard, etc) and your card issuing bank.  

 

Most merchants build this interchange fee into their pricing just like all their other costs such as labor, rent, taxes, utilities, desired profit, mia noi costs, etc.  But some of the more greedy merchants try to recover that interchange fee by charging the customer a surcharge for debit/credit card usage. 

 

Remember, this surcharge is not to be confused with an foreign transaction fee that may be applied.

 

 

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14 hours ago, Pib said:

mia noi costs,

You summed it perfectly for me to understand thanks for that, as for the casual 'mia noi', I pay her cash as I don't want any traces on my statements where the Mrs can might find out...lol

 

So the 5% that I am usually being quoted by the likes of Macro or DoHome is blatant customer gouging, an example would be for a 10,000 baht purchase for a TV, add 5% or 500 baht when the cost should be between 1%-3% at best, i.e. 100-300 baht.

 

I noticed on a recent trip to Sydney Australia when I purchased a bottle of rum for a client at the duty free counter, there was a surcharge to the debit card, i.e. the lady serving me stated that there will be a slight charge to your debit card for the $55 transaction sir, I said oh, and how much would that be with her reply being; I am not sure sure sir, but around 0.70c, it worked out to be 0.77c or 1.4% of the transaction, ok, this was a new thing to me as the Australian government made changes to credit card charges, and it looks like the it turned out that charges to debit cards to balance out the losses came into effect balancing things out.

 

That said, of the many lunches, dinners, shopping, outings etc etc that I used my debit card, as you say, most retailers must factor that surcharge into the cost which doesn't urk the client (me), because the only other time this was brought to my attention was a week later as I was leaving, I was purchasing a lottery ticket at the newsagency and the lady said there will be a surcharge of about 0.30c for the $30 ticket sir, are you ok with that, yeh sure I said, it turned out to be 0.39c which equates to about 1.3%, that said, if the retailer has to pay the cost and is seeking reimbursement, I am ok with it, providing it is reasonable, like you say within 1%-3% but 5% is not on, and that being said when someone tells me its a 5% surcharge, their business just lost my business, well at least until the Thai government brings in some serious changes as to how the retails charge. 

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I'm not OK with merchants who apply a surcharge to offset the card interchange fee to them. That fee should be built into their pricing just like all their other costs of doing business such as labor, rent, utilities, taxes, insurance, maintenance, and the many other costs of doing business. What if they started applying a surcharge for labor or utilities? I don't think a person would be OK with that.

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1 hour ago, Pib said:

I'm not OK with merchants who apply a surcharge to offset the card interchange fee to them. That fee should be built into their pricing just like all their other costs of doing business such as labor, rent, utilities, taxes, insurance, maintenance, and the many other costs of doing business. What if they started applying a surcharge for labor or utilities? I don't think a person would be OK with that.

I'm with you on that, but that said, it's law in Australia for those who do not factor it in to ask the customer before they apply the fixed amount, at the same time advising of the approximate amount, and when it's miniscule like 0.39c or 0.77c I can accept it, or decline it, but 99.99% will accept it on lower priced items as the 1.3%-1.4% doesn't impact me, whereas the 5% quoted in Thailand whilst not impacting me, it would be a principal thing.

 

Thailand it's a joke 5% seems to be the norm for some like Macro and DoHome which I would never pay and let them know that my business will go elsewhere, unless I need it and will pay cash for it. 

Edited by 4MyEgo

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21 hours ago, 4MyEgo said:

Thanks Pib

 

This is where the confusion is, ING Bank have advised me that they do not charge oversees banks for any purchasers that I make on my Visa debit card, what the banks charge overseas is up to them as they have no control over them, obviously.

 

Visa have also advised me that they do not charge merchants a merchants fee on debit cards for any purchasers I make on my Visa debit card, call it the 5% fee if you like that I keep getting told by Thai businesses, Visa advised that they only apply the exchange rate, however if it is a credit card they apply the merchants fee, why, I have no idea as I do not own a credit card.

 

The above said, ING Bank have advised me that a 2.5% overseas transaction fee applies on overseas purchasers which I knew of course, and yes this would apply to SCB Bank as well, that said if I fit into ING Banks criteria re-making so many purchases in any month, the following months 2.5% overseas transaction fee is waived on all purchases for that month.

 

So I am still at a loss to understand if the merchants are trying to pull a fast one over me, with them saying that their banks here in Thailand are charging them the 5% surcharge for my purchase, or is it all BS, because as I said, ING Bank and Visa have stated that they do not charge my Visa debit card anything, so why are the Thai (alleged) banks charging their merchants, that is; if they are, and the merchants trying to pass this onto me, i.e. a 5% surcharge "for using my own money", if the banks are, "it's wrong", and any Thai business that tries to re-coupe that fee from me will be at a loss from me.

 

Would just love to see something in writing from a Thai bank where it says they will charge a merchant a fee for an international Visa debit card, and if I see it, that's between the business and the bank, not me, suffice to say the car parts that I purchased cost almost 20,000 baht, and if the retailer tried to stick to his guns and charge me the 5%, that's 1,000 baht for using my Visa card, his profit would have been down for that month as I wouldn't wear it, just saying.

 

 

What none of you seem to realise is that all the banks charge you the buying rate when you purchase something in a foreign currency . The buying rate is about 5% higher than the normal TT rate. So every time you use your credit card outside of where it is issued. You are paying 7 1/2 to 10% higher than the average exchange rate. This is universal

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5 minutes ago, gamini said:

What none of you seem to realise is that all the banks charge you the buying rate when you purchase something in a foreign currency . The buying rate is about 5% higher than the normal TT rate. So every time you use your credit card outside of where it is issued. You are paying 7 1/2 to 10% higher than the average exchange rate. This is universal

I don't have a credit card, and when I do buy something, the rate that is applied to me on my purchase, be it the bank or Visa who provides the rate, whoever, is pretty good, i.e. almost on par to Transferwise which in my opinion is the best you can get in the market when transferring money.

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I disagree with comments of "the greedy merchants passing on bank charge costs" for cards.

IMO it's the merchants that build the cost in to ALL customers that are the greedy ones!

Why should a cash purchaser pay the same fee?

A card user gets charged at the exchange so why not at the store? Maybe just sore that they could not avoid the charge by making the merchant pay it for them. 😚

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2 hours ago, gamini said:

What none of you seem to realise is that all the banks charge you the buying rate when you purchase something in a foreign currency . The buying rate is about 5% higher than the normal TT rate. So every time you use your credit card outside of where it is issued. You are paying 7 1/2 to 10% higher than the average exchange rate. This is universal

Incorrect in so many ways. 

 

Banks use the card-network exchange rate (i.e., Visa/Mastercard/AmEx/etc) and if the card-issuing bank applies a foreign transaction fee (1 to 3% is typical) then that effectively lowers the exchange rate but that is your card-issuing bank's doings and not the card-network. 

 

Visa Exchange Rate

https://usa.visa.com/support/consumer/travel-support/exchange-rate-calculator.html

 

Mastercard Exchange Rate

https://www.mastercard.us/en-us/consumers/get-support/convert-currency.html

 

The card network rate and TT Buying Rate use for incoming international transfers are very close to each other.  Additionally the TT Buying Rate is appox 0.9%  higher than the Notes buying rate.  See below Bangkok Bank exchange rate for example.

 

image.png.44d69c143904023b97fcddf4ad816af9.png

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my info is not up to date but based on the days I ran a business which accepted credit cards some years ago.

the % the banks charged were based on the type of business and could be effected by the revenue generated by the business meaning a big business with lots of transactions could get better rates than small business. When visa electron debit card was introduced, the bank charged me a higher rate than credit cards. At the beginning of the internet era, before online electronic transactions, I accepted credit cards via fax machine. When the online business started thriving and generated many such transactions, the bank informed me that "mail orders" were not covered by my contract with the bank. I asked them to send me a contract for such transactions and they promptly did so, asking for 10% commission!!!! I argued this was insane and they were willing to reduce it to 6%.... they wouldn't go for anything less than that, basically killing my online business...

as for the merchants rolling the cc cost to their customers, well, most small businesses price the products based on cash payments, and adding 2-4% to the cost makes the deal bad. There were many threads here regarding the "unfairness" of this practice, suggesting that all businesses include the cc charges in the price presented on the product/service. However, the shops that will be the pioneers of such practice will present higher prices than their competitors and will probably lose a lot of business, so that's not going to happen anytime soon

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On 12/9/2018 at 3:59 PM, Pib said:

Who told you there were 5% fees?  I'm sure SCB or ING didn't tell you that.

 

To determine what foreign transaction fee your ING may charge go to their web and review the card's fees.

 

Within Thailand there would be no foreign transaction fee when purchasing something with your SCB debit card.  However, if outside of Thailand the a 2.5% foreign transaction fee would apply.  And online purchase from a foreign website would incur the foreign transaction fee also.

 

Now do not confuse a "merchant surcharge" for using a debit/credit card with a "foreign transaction fee" your card may charge.  Many card-issuing bank have foreign transaction fees in the 1 to 3% ballpark range.

Not uncommon for some small merchants who want to charge around a 3% surcharge fee if you want to pay using a "foreign" debit/credit card and that merchant is trying to offset the transaction fee he gets charged from Visa/Mastercard.  A few even want to apply a surcharge for Thai debit/credit cards.

 

Some merchants are simply greedy....don't want to incur any debit/credit card charges....they want to pass those fees to you.

 

So, yes, between a possible merchant surcharge applied by the merchant and a foreign transaction fee applied by your card-issuing bank those two fees could be around 5%.  

 

5% merchant fee is pretty steep, I have been told 2 or 3% if I used my US based Credit card for large purchases but never 5%.  Just for shi'ite and giggles, last month, I tried my SCB debit card in the airport in Nairobi on the way to Bangkok, it worked and yes SCB charged me 2.5% Foreign Transaction fee but the local bank in Nairobi also charged me 1%  (I think it was an ECO Bank ATM)

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Based on your post and words, it is ill-informed of the vendor and not the bank. 🤔

From experience, consistent training and customer service isn't their strong suit in general here.

Edited by thailand49
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