We’ve already spoken about the ridiculous system of credit card surcharges gouging extra money out of card holders. We think that a ten per cent surcharge on some purchases is scandalous, particularly when the bank processing fee can be as little as one to three per cent. The rest – of course – being sheer grasping profit for the store or service provider.
Credit Cards
You’ll not be surprised to learn that the Monetary Authority of Singapore – the government body in charge of overseeing both personal and corporate finances on the island – thinks exactly the same. They’re of the opinion that additional charges should be clearly marked and remain at a reasonable level. However, ten per cent surcharges on some services (and we’re still looking at you, taxi companies), remain an outrage that should be stamped out. They’re also concerned about another unreasonable surcharge – overseas transactions.
In a letter to the Straits Times, MAS director of communications Bey Mui Leng explained how surcharges affected credit card holders, and what MAS intends to do about it. She was answering a complaint from several people, who felt that charges for cross-border transactions were unreasonably high, a concern for the large numbers of us who do business in Malaysia.
Unfortunately, Ms Bey says, the overseas transactions surcharges are imposed by the major card operators – Visa and Mastercard – and represent what they think is the extra cost involved in processing cross-border payments. On top of this, “the specific fees for transactions with overseas merchants are determined commercially by card issuers and disclosed as part of their terms and conditions of use.”
That’s where we’ve got a problem with surcharges. While not so many years ago these charges had to be worked out manually and represented specific effort that had to be expended, this is now done instantaneously by computer and represents little or no extra effort at all.
While currency conversions are always skewed to profit banks, adding extra surcharges to credit card holders is hard to justify in this day and age of joined-up banking.
The advice MAS gives is simple: Check your transaction slips and check your statements. If you think you are paying unreasonable charges for any transaction – be it domestic or overseas – then complain. Unreasonable fees are a curse right across banking. If we shout loud enough, they can be stopped.
