International Credit Card Fees on AUD PayPal Transactions

bamzero on 05/04/2017 - 03:24
Last edited 07/04/2017 - 00:52 by 1 other user

OK, so I understand most credit cards charge fees for overseas transactions, whether in AUD or foreign currency.

I've noticed a couple of times now when paying in AUD via Paypal to overseas sellers I've been hit with such a fee.

Once was when I paid in AUD at Banggood and another on eBay to a seller out of the UK though item was listed in AUD on ebay.com.au.
However for the 99% of other times there is no fee, despite the seller still being overseas.

So really I guess my question is, anyone have thoughts on how we are supposed to know what is going to be classified as an overseas transaction when using Paypal.

I always thought Paypal was operating in various countries and when I paid via Paypal, the transaction was debited from my CC as an Australian transaction, and Paypal handled the sending of funds to the seller wherever they may be themselves, completely separate from the CC.

Update:
OK, so after looking at all the banks regarding international transaction fees they are all basically worded as
"where the merchant, or the financial institution or entity processing the transaction, is located overseas." soooo basically anything you buy from overseas is up for it.

I've come to the conclusion that it's just pot luck whether the bank detects where the merchant is (with ebay/paypal at least)

Apart from the usual fee free cards I noticed the Westpac issued Amex also doesn't charge any fees for overseas AUD transactions. and I don't see any mention of it for Amex issued cards

Financial

Comments

  • burningrage on 05/04/2017 - 07:00
    +7

    The quick answer is you don't. There is no way knowing that.

    THat's why I attempted to compile a list.

    https://www.ozbargain.com.au/node/225896

  • tomsco on 05/04/2017 - 07:42
    +20

    I'd almost say the onus is on all OzBargainer's to have a Citibank Plus and 28 Degrees or BankWest Platinum. Then you don't have to worry about this.

    • Love a bargain on 05/04/2017 - 12:23
      +4

      But it's still beneficial to know so that one can use a point earning CC when the transaction does not attract any FC/Int'l transaction fee

      • tomsco on 05/04/2017 - 16:49
        +1

        I agree with this, but when the FX fee can be 3%, sometimes it's better to just forgo it than to risk it.

        Unless I'm 100% certain it's an Aussie only company (ie. not Groupon, which is international), than I'll go for a FX fee free card.

        • Love a bargain on 05/04/2017 - 17:12

          I've had no problem with paying Groupon with an ANZ AMEX CC via paypal either. (Just saying.)

        • diarlin on 05/04/2017 - 17:46

          Yeah Groupon definitely doesn't require a forex charge.

        • tomsco on 05/04/2017 - 20:02

          @Love a bargain:

          All good, they've obviously gotten feedback in the past and changed their processes.

          https://www.ozbargain.com.au/node/140468

        • dufflover on 05/04/2017 - 22:14

          Unless I'm 100% certain it's an Aussie only company (ie. not Groupon, which is international), than I'll go for a FX fee free card.

          Same. If I'm buying from eBay, unless it's definitely, definitely an Aussie seller (like Good Guys) then I'll use my 28D/Bankwest. I have gotten off lucky once or twice where I forgot, and paid say $500 for a camera thing or phone from a grey importer (off eBay AU) and luckily did not get charged anything extra.

          But yeah in short, I don't risk it.

    • boomramada on 05/04/2017 - 13:46

      ^^^^^^^ Listen to above comment, Even if you buy with AUS, Banggood get charge as international transaction, even if its goes through paypal.

      When shopping,
      .com use paypal via 28degree
      .com.au use paypal or CC, but there are some sneaky shops still charge as international transaction.

      • bamzero on 05/04/2017 - 14:49

        That's the thing. The Banggood one at the time I figured ok, I've more of an issue with it when I'm using ebay.com.au and paying in AUD, and there is no way for me to differentiate between one that is going to get a fee slapped on it or not.

        When I pay using Paypal, I'm not paying the seller directly with my credit card, I'm first funding my Paypal account with the amount from my credit card which I assumed was processed by Paypal Australia which they then send via their own system to the seller.

        I actually had 3 items in my eBay cart, one seller is listed as UK, one as Singapore, the other as China, though only one copped the fee.

        • boomramada on 05/04/2017 - 15:07

          Its more of a banggood issue, its shows the price in AUS, but when it charging the paypal, they charge in US or international merchant.

          https://www.paypal.com/au/webapps/mpp/paypal-fees

          well pay your fee and move along, next time try Citibank Plus and 28 Degrees or BankWest Platinum :)

        • Love a bargain on 05/04/2017 - 15:11

          Have you tried contacting paypal to see if they can explain what caused the different treatment?

        • bamzero on 05/04/2017 - 15:22

          @boomramada:

          No it was listed in AUD in Paypal and charged to my credit card directly in AUD without conversion. I'm not worried about Banggood, more so eBay.

          The issue seems to me that sometimes it is getting processed by Paypal in Australia, sometimes overseas, yet we have no way of knowing which it is going to be until after.

        • boomramada on 05/04/2017 - 15:25
          +1

          @bamzero:

          You talking about bangood? no
          Prices are always in USD in bangood, but sometimes it can track your ip and change it to AUD, this is just a option to compare price in AUS, Actual transaction is in USD. If is ebay, I have no idea, talk to ebay :)

          You should contact [email protected]. ask them why as well ;)

        • bamzero on 05/04/2017 - 15:29

          @Love a bargain:

          Yeah, I have, though I am not expecting much.. Will see what they say anyway.

        • Love a bargain on 05/04/2017 - 15:44

          @bamzero: Would be interesting to see what they say

        • bamzero on 05/04/2017 - 15:51

          @boomramada:

          I know what you mean, agree most are just display prices outside of USD, however Banggood does actually charge in AUD if that's what's chosen. You can see if you add something to your cart in AUD and go to Paypal checkout the value is listed in AUD as opposed to other Chinese stores that revert to a USD total in Paypal. Regardless, didn't help avoid the international fee anyway.

        • EnALup on 05/04/2017 - 23:32

          @bamzero: I got charged similar in the past by Citibank Credit card, but they returned it few weeks ago stating the website I purchased was .com.au and should not have been charged. I didnt apply for it and even forgot about it. Reason being, such charges are added on later date when you do not look at old entries.

        • j05h on 06/04/2017 - 10:50

          @bamzero: This is true ^^ I bought something on Banggood this morning without using 28deg and it was charged the exact amount in AUD that their website said it would be (paid with standard CC through PayPal). I'm hoping I don't get a follow up fee.

        • iSamurai on 06/04/2017 - 13:10

          @boomramada:

          I bought something from Banggood last month, paypal receipt says charged in AUD, Commbank CC reflects that exact amount. A few days later I was charged international transaction fees. I was furious, called CBA to have it refunded because it was paypal and was charged in AUD. They gave me some lame excuse with some interchange fees being passed onto customers but refunded the fee in the end.

    • nomoneynoproblems on 05/04/2017 - 22:53

      Exactly this. If you don't have any one of the above, you may as well hand in your ozb badge.

  • Fergy1987 on 05/04/2017 - 09:03

    Yeah I tried arguing this with the bank - got a big GF from them…..real annoying when its all advertised in AUD and then you get slugged with an extra 3%

    • BigTed on 05/04/2017 - 12:42
      +2

      I kinda think this is on the seller - not the bank.
      If it is an overseas transaction done in international currency (whether through Paypal or anything else) the bank just applies the fees. They don't ask (and don't care) what the seller told you or showed on their website.
      It is the seller who should make it clear that even though it seems to be an AU$ transaction your account will actually get hit with a foreign one.

      • aussie28 on 06/04/2017 - 11:24

        I'm with ING and made a airasia flight booking on Opodo.com.au from a recent deal for around $250 return to Vietnam and was charged a $6.28 fee. I called ING but they couldn't help so I complained to Opodo since it was a com.au website but there using overseas payment facilities. All I had to do was send a screenshot of the fee and they quickly refunded me without much fuss.

  • forumninja on 05/04/2017 - 09:10

    It would be good to know the banks that are doing this so OzBargainers can avoid.

    Which bank?

    • tomsco on 05/04/2017 - 09:45

      TBH, I think all banks are probably moving towards this. That's why I reckon it's just safer to have the fee free international cards when making purchases from potentially overseas vendors. In saying that, one would feel safe to assume that Groupon.com.au would process there payments in Australia, but I recall that may have been resolved.

    • Fergy1987 on 05/04/2017 - 10:00

      most of the big banks do - CBA definitely do.

      • forumninja on 05/04/2017 - 10:15

        From my experience Westpac, Amex and ANZ don't do "merchant name based" overseas charging (e.g. do not charge for surcharge when paying via PayPal).
        From what I read CBA do.

        • Fergy1987 on 05/04/2017 - 11:44

          Ugghh I am with the wrong freaking bank! - Time to cancel my card :-)

        • bamzero on 05/04/2017 - 12:29

          A few years back the missus made an AUD purchase on Google Play with an ANZ CC (can't remember which) and got charged an international fee.

    • R-Man on 05/04/2017 - 11:16

      I had Westpac Altitude Platinum cards, and the Amex card did not charge overseas merchant fee if the transaction was in AUD (the visa still charged a fee though). I always used to purchase from Charles Tyrwhitt online and never got the fee.

      I would guess all Westpac Amex cards do not charge this fee but don't know for sure.

    • bamzero on 05/04/2017 - 12:27

      In this particular case it's been Amex with CBA.

  • Cluster on 05/04/2017 - 13:18

    I always put international eBay/PayPal purchases denominated in AUD onto my BankWest card to avoid around 3% in credit card fees. It doesn't make much sense to me that a transaction made on ebay.com.AU, denominated in AUD and charged that way to my card also attracts a FOREIGN transaction fee.

    • forumninja on 05/04/2017 - 14:39

      charged that way to my card also attracts a FOREIGN transaction fee

      Which bank issued your other card? CBA?

      • Cluster on 05/04/2017 - 15:27

        NAB

  • Love a bargain on 05/04/2017 - 14:45

    Have recently ordered something from overseas ebay sellers that are listed on ebay.com.au & in AUD (i.e. no DCC involved). Paid with ANZ AMEX and was not changed any foreign transaction fees. Just putting it out there in case it helps anyone.

    • bamzero on 05/04/2017 - 14:55

      Yeah it's hard to know just which at the moment. As I mentioned up the page, I had 3 separate overseas sellers in the cart but only one was deemed foreign.

      • Love a bargain on 05/04/2017 - 15:09

        It's terribly annoying/ uncertain for sure. There seems to be no hard and fast rules.

  • Domingo on 05/04/2017 - 21:32

    I've recently been getting charged foreign transaction fees for spotify, has anyone else encountered this?

    • [Deactivated] on 05/04/2017 - 22:17

      No.
      Although with all the shady family deal plans going on here from earlier days wouldn't surprise me

      • tomsco on 06/04/2017 - 08:46

        No to say the use of a family plan isn't shady, but what as that have to do with FX fees?

  • squashedfrog on 05/04/2017 - 23:25

    Was slugged such a fee with my Citibank Platinum when booking accom. via airbnb.com.au. Was charged in AUD for an a place in adelaide. Used paypal and citibank charged international transaction fee because it was processed by Paypal GB. Complained to airbnb - they said they charged exactly what was advertised and advised to contact bank. Complained to bank, they said the transaction, even though in AUD was processed internationally, so it attracts an international charge.

    Lesson learnt, use citibank plus

  • z0s0 on 06/04/2017 - 11:59

    With PayPal it appears to me that if the merchant has registered their PayPal account with PayPal Australia, then making PayPal payments to that merchant will not be international for the purposes of Australian credit card issuers.

    If not, then you will face said fee.

    Airbnb is a particularly tricky one, because they have various PayPal accounts; including US, UK, Australia. Presumably they only use the Australian PayPal account for Australian listings, etc.

    It's common for businesses to have multiple PayPal accounts when they operate in different jurisdictions (and indeed mine does).

    EDIT: Actually it appears AirBNB does not have an AU PayPal account; only US and UK from what I've seen in my transaction history.

    • constipated on 07/04/2017 - 07:54

      No Australian listings do not automatically go through Paypal Australia.

      We got slugged a fee for a listing in Port Macquarie NSW.

      It retrospect should have argued with AirBnB to try to get the fee reversed.

  • ascorbic on 06/04/2017 - 12:49

    Also recently been slugged an international fee for a purchase through paypal in AUD on a .com.au domain. Absolutely ridiculous.

    • bamzero on 06/04/2017 - 12:54

      What I've taken from all this so far is your best bet is to complain to the seller, prove the fee paid, and hope they are fair enough to refund it to you.

      • movieman on 06/04/2017 - 14:40

        And only pay with Bankwest Platinum / Citibank Plus, if unsure.

    • meanozbgnr on 06/04/2017 - 20:14

      paypal had a glitch last week, they charged my card in USD (despite my card was always AUD and I never chose or used USD for transactions) and my bank charged me international transaction fee. They admitted it was their fault but I'm waiting for reimbursement atm.

  • firewaters on 06/04/2017 - 21:04

    I think it's only NAB, never happened on CBA or ANZ.

    NAB seems to charge a fee even if it's AUD. They said it because it's an international company, if the transaction is done from outside of Australia you'll get NAB Int. fee.

    • bamzero on 07/04/2017 - 00:40

      Unfortunately it's all banks, though there are a few options for no international fee cards. The Westpac issued Amex is also fee free for overseas AUD transactions.

      The general wording for the international transaction fee is "where the merchant, or the financial institution or entity processing the transaction, is located overseas."

      So they've got that tied up.

      I think in the case of ebay/paypal, I think it's just pot luck whether the bank detects where the merchant is. As already said here, stick to a fee free card to be sure.

      • burningrage on 07/04/2017 - 13:55

        AFAIK, the reason why AMEX doesn't charge this International Transaction Fee (not to be confused as Foreign Transaction Fee) is because AMEX is not participating in DCC scheme. Visa/Mastercards do so it is less likely you would get charged DCC if using AMEX.

        All banks do DCC. Previously DCC was only applied in Hotels and now because of RBA reform, one way to claw back lost $$$ is to apply DCC to ALL transactions even in AUD if the payment processor is done overseas. This is why at one stage Sydney Aquarium ticket purchases attracted International Transaction Fee (DCC)

        Your best bet is to check in the link I provided at the first response of this thread. I attempted to list all. I believe Spotify is one of them.

        For those who are unaccustomed, DCC means your cost is inflated by up to 10% (averaged 8.8%). Why?
        1. They show you in AUD using their own conversion rate (set by Global Blue) https://en.wikipedia.org/wiki/Dynamic_currency_conversion.
        2. This conversion rate is already unfavourable vs wholesale Visa/MC scheme. So that's ripped of number one.
        3. Then you get hit again by your bank another 3.3% to 3.4% for DCC. That's number two.

        Banks structure the assault in this fashion:
        1. First time you know about it is in Bank Statement which is about T+ 3 or 4 days. So T = Day of Actual Transaction. So you know about the DCC 3 days after the actual transaction.
        2. You complain to retailer who will say they get $0 from DCC. This is correct. DCC is a BANKS SCHEME (hence why AMEX is not a participant).
        3. You complain to the bank who will say the retailer processed the $$$ from overseas and they have no way knowing it they would do that.
        4. You lose.

        The only solution to this to lobby to Govt to outlaw DCC altogether. There is no public economic benefit other than creating an artificial inflation.

        EDIT: And if that's still not enough, from 1 July 2017, GST will be applied on all imports. No small value exemptions. So DCC on GST. I am beginning to think this is Govt's assault on on-line transactions in order to save Bricks and Mortar.

        • bamzero on 07/04/2017 - 17:23

          Yeah, I read about DCC, but is this the same thing? I mean especially in the case of Paypal.
          If I as a seller says I accept a particular currency, then that's what Paypal gives me the funds in is it not?

          Maybe I misunderstand, and Paypal credit card transactions work differently to their cash funded ones.

          Regardless, I guess the only thing we can say for sure is it's a rort..

          (Commbank hasn't even replied my enquiry about it yet, 2 days now.)

  • MrBillions on 07/04/2017 - 07:39

    Yes potluck but in the past by calling them up and complaining they have been waiting these fees.
    Citibank repaid me $300 voluntarily for incorrectly charged or incorrectly disclosed intl. Transaction fees.

  • perplex on 23/08/2017 - 18:13

    ive just noticed im getting charged too..

    is it only with credit cards? or savings/transactions accounts too? i dont believe i use to get this when my paypal was linked to my savings account, only just started happening when i linked to my credit card i think

    i know the thread is getting old sorry

    • bamzero on 23/08/2017 - 18:34

      As far as I'm aware it's just credit cards.

      • perplex on 23/08/2017 - 22:18

        thanks, ill just make sure to pay international things with savings, just going to have to work out what ones, some times its fine so

        • tomsco on 24/08/2017 - 09:45

          Or alternatively get one of the free no FX fee cards (28 Degrees, Citibank Plus, etc).

  • bamzero on 23/08/2017 - 18:36

    I came across this later that covers the issue pretty well..

    https://www.choice.com.au/shopping/online-shopping/buying-on…

    • perplex on 23/08/2017 - 22:18

      yea i ended up reading that before i found this topic, cheers

  • brendongl on 14/05/2018 - 16:22
    +1

    This is rediculous.

    i paid a $60 foreign fee for my $2000 ebay bill even though the currency was in AUD and the site was com.au.

    Ebay should write a disclaimer on there page saying that the transaction will originate outside of Australia and we should check with out banking provider if we are charged a fee.

    The bank is going to refund it as a one-off though. Hopefully, divipay comes back online soon.

  • furyou on 15/09/2018 - 18:55

    Had anyone tried multiple items? If you have few things in your kart, say $500 of stuff from good guys, then $5 of o/s stuff you added to tag onto the coupon discount, would the transaction go through as o/s or local?

    • bamzero on 15/09/2018 - 21:29

      Each seller is processed as separate transactions by PayPal.

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