Transaction fees are standard practice

Mr Victor Wee Hsiao Ming ("How to tell if firms process card payments overseas?"; last Sunday) said that Citibank imposed a "currency conversion fee" of 8 per cent on his Visa credit card for an online transaction he had made on Groupon Singapore's website.

The "currency conversion fee" he was referring to was an international transaction fee that was incurred when the Singapore-dollar card transaction was processed outside Singapore, which applied to Mr Wee's case, as the merchant, Groupon, is based outside Singapore.

The international transaction fee is 0.8 per cent for Singdollar Visa card transactions, not 8 per cent, as stated by Mr Wee.

As a standard industry practice, such an international transaction fee is charged to credit card issuers, including Citibank, by global payment networks, such as Visa, for transactions where Singdollar card transactions, including online transactions, are processed under two scenarios: with a local merchant whose payments are processed through an overseas intermediary, or with a merchant who is registered as an overseas merchant, regardless of its actual location.

There will be additional charges or fees incurred (such as the international transaction fee and currency conversion charges) on transactions depending on the channel/mode on which the transactions are made, or location through which the transactions are processed.

If cardholders are concerned about incurring additional charges or fees, they should inquire with the merchants on whether the transaction is processed in or outside Singapore, prior to making any payments for their online purchases. Details of banking and card fees are available on

Adam Rahman

Head, Corporate Affairs

Citi Singapore

A version of this article appeared in the print edition of The Sunday Times on June 05, 2016, with the headline 'Transaction fees are standard practice'. Print Edition | Subscribe