Matt
09-15-2008, 08:06 PM
Got a complaint from a client I recommended Sherweb Exchange hosting to of a new 3% Foreign Transaction Fee appearing on their credit card. Sherweb is located in Canada and my first thought was that they had been billed in Canadian dollars. Upon further investigation, it turns out they were billed in U.S. dollars. It used to be that these fees only applied when an actual currency conversion takes place, but now Visa/ Mastercard are looking at the address of the merchant. 3% seems to be pretty standard for credit card companies, although Visa/MC charge a 1% base fee. American Express stands at 2%. Discover seems to be the lone holdout of the major players with no such fee.
A 3% fee is certainly going to affect who cardholders decide to do business with and I expect consumers are going to start looking at alternate payment methods that do not incur the 3% fee. It is my understanding that non-U.S. cardholders are affected by this as well, but this is all news to me. Would be interested to hear from non-U.S. merchants who use PayPal, Google Checkout, or something else and whether that avoids the "foreign transaction fee."
-Matt
A 3% fee is certainly going to affect who cardholders decide to do business with and I expect consumers are going to start looking at alternate payment methods that do not incur the 3% fee. It is my understanding that non-U.S. cardholders are affected by this as well, but this is all news to me. Would be interested to hear from non-U.S. merchants who use PayPal, Google Checkout, or something else and whether that avoids the "foreign transaction fee."
-Matt