Hidden use of border charge

I REFER to the recent statement by Bank Negara Malaysia that retailers cannot impose surcharges on payments made with credit and debit cards.

While I strongly support this stance by Bank Negara, I also wish to highlight the fact that retailers aren’t the only ones imposing surcharges on credit card transactions. Credit card-issuing banks are doing something similar as well.

I recently purchased an air ticket online using my credit card issued by a major bank in Malaysia. I was in the country at that time.

The flight originates from Malaysia, so naturally the ticket was charged in Malaysian ringgit (as per the common practice of most airlines in the world). However, when I received my credit card statement a month later, I was shocked to see that the amount in my statement was different from the amount that I had authorised, which was RM617.10. The amount in the credit card statement was RM623.27.

I then checked through all my other transactions and found that two other transactions had a similar problem, that is the amount in the statement was different from the amount I had authorised.

When I contacted the bank about this matter, the customer service personnel informed me that the difference was due to the bank imposing a 1% “border charge” on overseas transactions.

But my transactions were made in Malaysia and the currency used was Malaysian ringgit so how can these be considered overseas transactions?

To make matters worse, this border charge is imposed in a secretive manner on credit card users, who are not being told upfront that an extra charge would be imposed on their purchases.

Before I authorised the transaction, I was redirected to a webpage operated by the credit card-issuing bank to confirm the transaction amount and transaction merchant by entering a One-Time Password (OTP) sent via SMS to my mobile phone (as per the standard practice of all online credit card transactions in Malaysian ringgit nowadays).

The transaction amount shown on this “Confirm Transaction” webpage was RM617.10, not RM623.27. The extra 1% border charge was not added to the amount.

There is also absolutely no mention of any extra charges, such as border charge and so on, in the webpage.

If the bank thinks that it has the right to impose a 1% border charge on a particular transaction, shouldn’t this be stated clearly to credit card users when we are authorising the transaction? In doing so, credit card users can decide whether to complete the transaction or use a different card or a different payment method. Instead, this border charge is imposed secretively – it only appears a month later in the credit card statement.

In addition, this border charge is not listed as a separate item in the statement; it is just added into the transaction amount. If one does not check one’s credit card statement carefully, one would probably not realise that a surcharge had been imposed on them.

DISAPPOINTED BANK CUSTOMER Petaling Jaya