Foreign Transaction Fee

Posted By: Tony Baird

Last Updated: Thursday August 13, 2009

The foreign transaction fee has come up a bit in the past year and I figured I’d rant about how ridiculous this fee is.  We’re a Canadian corporation and as such we have a Canadian merchant account.  For the most part we never run into issues with this and no extra fee’s for our users or anything of that nature.  There is however a few select banks in the United States who have now decided to charge their customers a 3% fee and call it a foreign transaction fee.  The best part about this fee is it shows up as if we charged it in a lot of cases when it has nothing to do with us.  This makes us look pretty bad to the few customers we have who’s banks have decided to add fee’s other banks are not adding.  Some users have suggested to us why not get a merchant account in the United States.  There are several reasons the first being we’re not incorporated in the Unites States making such a task a very difficult and if we did it would become a very costly one for us.  The second part is it’s not just the United States who get these fee’s we’ve heard users in the UK get charged a foreign transaction fee when purchasing items from Canada and the United States.  So we’d probably need a merchant account in every single country for our customers to avoid such a fee being charged by a select few banks in each country.

So a pretty big annoyance but it does not surprise me a whole lot.  We have a US credit card with our Canadian bank and we’re almost exclusively using online banking which is great to pay off our credit cards and check the balance of our accounts.  Now the strangest thing we cannot pay off our US credit card online even when we have a US currency bank account.  We have to call or go to the bank to pay as our online banking will not pay it online.  It’s very strange considering we can move funds between currencies and it takes a teller seconds to pay off our card.  So it feels like it’s some legacy policy before online banking was possible and every time we call to pay it or go to a teller it feels like we’re being an annoyance and we should be doing it online or through a ATM.

So banks are just strange in too many ways and I guess no way to avoid them.  If you’re one of the unlucky few getting charged a foreign transaction fee best to just use Paypal to pay us.  We have no way of controlling that foreign transaction fee at least with Paypal it may not if your card is charged there just yet…

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