It was Joni Mitchell who wrote the lyrics: Don’t it always seem to go, that you don’t know what you got '’til it’s gone.
Until the end of June, FNB customers were not paying fees on any credit card purchases from international companies, provided they were levied in rand.
I’m talking about the likes of Airbnb, Spotify, iTunes, Netflix, Alibaba, Bolt and Bookings.com. But that changed on July 1 when the bank starting levying a 2% fee on international transactions, rand-based or not.
It took a while for many account holders to notice, but when they did, they were understandably not at all pleased about the string of small amounts which had begun to show up on their statements. “Wasim” assumed it was only FNB levying such fees, hence his tweet of this week: “FNB conduct themselves like thieves, sneaking in that 2% charge on rand-denominated foreign transactions. Surprised there’s no public outcry. For some of us it is more than a few rand.”
Four other banks don’t charge any additional fee on rand-denominated payments for international services: Absa, African Bank, Bank Zero and Nedbank.
And Jess demanded to know on Twitter: “Why on earth is FNB now charging me international payment fees on my Google and Spotify payments made on my credit card?”
Those small amounts can add up to quite a bit every month, and when you consider the transaction volumes, that’s quite a bit of extra revenue for the bank.
Jess’s attached screenshot of a section of her bank statement revealed that in just two days she was charged three international payment fees: R5.80 for Google Storage and two of R1,60 each for Spotify purchases.
On Thursday, Evan tweeted on the matter: “With an ever increasing uptake of international streaming services such as Apple Music, Netflix etc, FNB recently decided to start charging a 2% transaction fee! The writing is on the wall, I need a modern, dynamic bank!”
The fact is, Visa and Mastercard levy charges to the local banks for all international transactions, but some choose to absorb those costs on rand-denominated ones.
Last April, the SA bank with by far the most customers — Capitec — came in for a lot of flak when the bank began charging international processing fees on credit card payments in rand and foreign denominations.
The fee is R1 for each transaction up to R200 and R3 for payments more than R200. On canvassing the other banks on this practice at the time, FNB told me: “Currently FNB customers are not charged international processing fees for global streaming services such as Netflix, iTunes and Amazon Prime, Uber and Bolt.”
The word “currently” turned out to be key in that response because change was clearly afoot: just two months later the bank revealed the end to fee-free rand-denominated international transactions.
Up to June 30 only non-rand international transactions were subject to a 2.75% fee, FNB told me. “Even though these transactions are denominated in rand, they still involve international companies and the bank incurs international transaction processing costs.”
Hence the change in policy.
“As part of our annual pricing review effective from July 1, we reduced the fee across all currencies to 2% for pricing simplicity and consistency, and it now also applies to rand-denominated transactions.” They are Airbnb, Alibaba, Amazon, Bolt, Bookings.com, BritBox, Facebook, Google Play Store, iTunes, Netflix, Spotify, Steam, PayPal and PlayStation. So how did FNB disclose this significant change to its customers?
“Communication on the annual fee review was done via the FNB App, SMSs and direct mailers to customers.”
Interestingly, it’s not something a trio of the bank’s higher-ups highlighted in media briefings in the run-up to the July 1 changes. Not a word was said.
So will Evan be able to find a “modern, dynamic bank” which doesn’t levy fees on overseas transactions?
Just one — Discovery Bank does not charge an additional fee for subscription services regardless of the currency they are billed in.
Four other banks don’t charge any additional fee on rand-denominated payments for international services: Absa, African Bank, Bank Zero and Nedbank.
That leaves Capitec, Standard Bank (2.75%) and TymeBank (2%) with the same policy as FNB — a fee is charged for international transactions whether made in rand or a foreign currency.
So Discovery Bank is looking the most consumer-friendly on this score. For now, at least.
• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.
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