Currency charges for local services unfair

While banks have been levying a dynamic currency conversion (DCC) charge for some time now, the number of transactions with such charges is increasing as new services requiring online payments are on the rise.

For instance, Spotify advertises its services in Singapore at $9.99 a month and Uber advertises itself as a Singapore company charging your credit card in Singapore dollars.

However, it is foreign entities of the same company - Spotify Sweden and Uber BV, respectively - that are making the credit card charges.

This is where the issue gets murky.

A bank that levied a DCC charge on my transactions claims that it is doing so as a foreign entity is charging my credit card in Singapore dollars.

On the other hand, when asked, Spotify and Uber directed me to the disclaimer on their websites that said the payments do "not include fees that may be charged by your bank" and to "contact your bank directly for inquiries".

Why are these companies using a foreign entity to charge Singapore consumers for a service they are offering here?

Are customers paying the price for companies trying to exploit tax loopholes?

I hope the Monetary Authority of Singapore takes up the matter and issues a directive protecting the rights of consumers.

Ambar Gupta

A version of this article appeared in the print edition of The Straits Times on November 26, 2015, with the headline 'Currency charges for local services unfair'. Print Edition | Subscribe