Has CBA implemented transaction fees for AUD transactions overseas?

[Mal]

I don't use my CBA Visa very often, and really don't use DCC. But when poking around the CBA site today noticed the following:

Transactions overseas but in Australian dollars(6): 2.00%

# Applies where a transaction is in Australian dollars but the party accepting the card is overseas.

How long has this charge been around? I don't recall seeing it before.

 

[trippin_the_rift]

Granted I've not used my CBA CC in almost 8 years, however back then the foreign exchange fee was listed as a separate item on the transaction list.

Some banks disguise it by including it in the transaction total, thus making you think there's no fees

 

[docjames]

Ebay purchase in AUD from UK based seller. No extra charges. CBA MC.

 

[Stephen65]

These charges were introduced because dynamic currency conversion meant that the banks were missing out on their cut from foreign transactions. What exactly they do for that 2% is anyone's guess.

 

[oz_mark]

These charges were introduced because dynamic currency conversion meant that the banks were missing out on their cut from foreign transactions. What exactly they do for that 2% is anyone's guess.

Some of it is charged by the schemes (Visa or Mastercard) for using their infrastructure. The charges have names like cross-border assessment.

 

[Postcode]

Today I tried to transfer money from a CBA account to an account in Europe to pay for some purchases. It was a small amount of $100 AUD or so. I looked at payment options..

Personal - International - International Payments - Transfer Money - Commonwealth Bank Group

International Money Transfer
One of the safest ways to send money to friends and family overseas is through an International Money Transfer. You can organise an International Money Transfer by using NetBank or visiting a Commonwealth Bank branch.
The Commonwealth Bank sends more International Money Transfers (IMTs) from Australia than any other bank*. Our IMT service is a quick and secure way to send money to an overseas bank account to over 220 countries in a variety of currencies.
Where Can I Send an IMT From?
You can send an IMT from wherever you can access NetBank, available 24 hours a day, 7 days a week. Alternatively, you can send an IMT from any Commonwealth Bank branch.
How Much Does It Cost?
An IMT sent through NetBank will cost $22. An IMT sent through a branch will cost $30.
IMPORTANT INFORMATION
Overseas banks receiving the IMT may deduct their own processing fees. Please be aware that the overseas bank processing fee will be deducted from the value sent.

Combine that with a less than favourable rate of exchange I ended up paying by CC. Also I let the desk staff know I realise they do not set the fees but the fees are clearly excessive and would they please relay my thoughts to management.

To their credit, the desk staff appeared astonished and apologetic at the fees.

 

[levelnine]

Today I tried to transfer money from a CBA account to an account in Europe to pay for some purchases. It was a small amount of $100 AUD or so. I looked at payment options..

O/T, but that is a fairly standard change for international money transfers (telegraphic transfers). Most banks will charge you about $20 for that service.

If you can, it is usually far better to pay by credit card, particularly if you have a Wizard/28 Degrees credit card, which charges no international transaction or conversion fees.

As for the CBA card, my suggestion would be to get a Wizard/28 Degrees credit card for any international transactions (whether in AUD or a foreign currency).

 

[Postcode]

O/T, but that is a fairly standard change for international money transfers (telegraphic transfers). Most banks will charge you about $20 for that service.

If you can, it is usually far better to pay by credit card, particularly if you have a Wizard/28 Degrees credit card, which charges no international transaction or conversion fees.

As for the CBA card, my suggestion would be to get a Wizard/28 Degrees credit card for any international transactions (whether in AUD or a foreign currency).

Hey thanks for the advice. Am looking into Wizard right now. But I still think a 20% fee for the small transfer is a nice little earner for the CBA and will help explain their ever increasing bottom line when reporting time comes along.

 

[ric_melb]

The $20 fee for an Overseas Telegraphic Transfer is common among banks.
It reflects the fact that such transfers are not always fully automated.
The fee is standard for most any amounts, and therefore cannot be seen as a percentage amount.
The reality is, and has been for years, that it is not worthwhile making a payment overseas for $100 by this method.

 

[straitman]

Slightly OT but I have a $US check to deposit and they want a $10 fee and a 30 day holding period :!: :shock:

 

[elbarto]

Slightly OT but I have a $US check to deposit and they want a $10 fee and a 30 day holding period :!: :shock:

That's normal. The cheque needs to be sent to the bank that it's being drawn on. Some banks will honor it in a day or two, some will take longer. Dealing with things like this was normal practice in my previous job.
We had one instance where a cheque was drawn in USD from a Swiss bank account. The bank told me the Swiss bank told them to bugger off and that they don't know how to negotiate a draft (And we're talking central banks here, not you're CBAs and UBS'). About two months later we had to give up because only way were going to get the money was to pay a fee of around $200 (the cheque value wasn't much greater than that) just to attempt to get the funds remitted via the Fed in New York,

 

[percysmith]

Transactions overseas but in Australian dollars(6): 2.00%

# Applies where a transaction is in Australian dollars but the party accepting the card is overseas.

Yep, DCC no doubt.

Visa doesn't charge for this (I can't post links yet, but Google "Charge it but check the math" for a Washington Post article).
Mastercard charges.
HK issuer banks (HKG is my home now, used to SYD and my brother still lives there) don't charge extra for DCC use on their Visa cards.

DCC is such a huge ripoff anyway. Especially in China, it's just damn unavoidable (Google DCC Scam in China on flyertalk.com)

 

[dundas]

Yes. In my case, the difference for an $800 airfare bought in Thailand using dynamic conversion (and then paying the CBA their 2% tax on top) and using a Wizard Clear Advantage (now 28 degrees) card was from memory more than $40. So guess who doesn't use his CBA Mastercard outside Australia any more?

 

[Smackbum]

It's not much better with overseas ATM fees. Whilst in Vietnam recently I had 2 methods of acquiring Dong. The first was to change cash at hotel desks, travel agencies, jewellry shops, etc. Never any problem and always a good rate (above 20,000 Dong to the AUD).

The other method was via ATMs on the Cirrus network. This was about 50/50 for working as sometimes they seemed to have run out of money or couldn't complete the transaction or were just having a bad day. But when I succeeded I almost wished I hadn't. For a typical 2,000,000 Dong withdrawal I was charged about $1.50 by the ATM owner (disclosed up front) but then had to fork out $5 and 3% to the CommBank for the privilege of sending some bytes across to Oz. So the effective "fee" for using ATMs was about 10%. Where's the ACCC when you need them?

And when you compare the effort involved with money-changers having to keep tabs on fluctuating exchange rates and going to the bank to "sell" all the various currencies they collected and then transport and secure large amounts of local currency ..... it beggars belief that they can do so for even the same cost as an ATM - let alone 10% cheaper.

 

[percysmith]

It's not much better with overseas ATM fees. Whilst in Vietnam recently I had 2 methods of acquiring Dong. The first was to change cash at hotel desks, travel agencies, jewellry shops, etc. Never any problem and always a good rate (above 20,000 Dong to the AUD).

The other method was via ATMs on the Cirrus network. This was about 50/50 for working as sometimes they seemed to have run out of money or couldn't complete the transaction or were just having a bad day. But when I succeeded I almost wished I hadn't. For a typical 2,000,000 Dong withdrawal I was charged about $1.50 by the ATM owner (disclosed up front) but then had to fork out $5 and 3% to the CommBank for the privilege of sending some bytes across to Oz. So the effective "fee" for using ATMs was about 10%. Where's the ACCC when you need them?

And when you compare the effort involved with money-changers having to keep tabs on fluctuating exchange rates and going to the bank to "sell" all the various currencies they collected and then transport and secure large amounts of local currency ..... it beggars belief that they can do so for even the same cost as an ATM - let alone 10% cheaper.

I've just returned from SGN.

I was trying out my brand new (HK) Standard Chartered Priority Banking ATM card, which is a PLUS card that promised no fees overseas (like fruit juice, I think they meant no *added* fees - they'll still pass the 1% from Visa/PLUS on).

I was charged HK$2,046.03 (around A$262) for VND5,020,000, which is VND2,453.53/$, which is 1.5% of the Oanda rate (2,489.68) for that day. It isn't the Oanda rate +1% (2,464.78) but it's not Oanda rate +1% + HK$25 full PLUS charge either.

Same as you I got nickeled and dimed by the ATM which asked for VND20,000 (around A$1). I wonder is that common in Vietnam? I wanted to cash out in the airport so I can start tipping the driver and the doormen at the hotel (and rather not do US$1s).

Post-ante I thought I would've been better off changing at the currency exchange but in previous travel ATM beats changing cash.


I empathise with Australian ATM cards problems withdrawing overseas tho. Last time my mates went over with me to Shenzhen, they can't withdraw more than approx A$200 per person in Renminbi from Chinese or foreign banks' ATMs, and I know they were going to be bilked around A$5 or so for the privilege. I ended up floating everyone enough Renminbi to have a good buck's night up north, and asking them to reimburse me in AUD so I've some cash to spend on my trips back.

 

[percysmith]

Yes. In my case, the difference for an $800 airfare bought in Thailand using dynamic conversion (and then paying the CBA their 2% tax on top) and using a Wizard Clear Advantage (now 28 degrees) card was from memory more than $40. So guess who doesn't use his CBA Mastercard outside Australia any more?

Yes but the alternatives are to AE (should be DCC-free, but can't use everywhere, esp low margin, mum and dad shops) or cash up (notwithstanding the truly pitiful withdrawal limits Aus ATM cards have overseas).

I did one Visa transaction tho, at Tib in SGN. No DCC there. In fact, doing some research after the trip, I don't think DCC's been introduced in Vietnam yet. I bet HSBC's very eager too, given the aggressive push they've made on it in the Shanghai area (whether you want it or not).

Hence I am really upset that Visa has introduced a platform that's just lining the pockets of overseas merchants that Australian visitors go to. It's truly a Hobson's Choice - either pay A$10 to get A$200 worth of local currency for ATM, change in Australia with incredible spreads for cash or risk DCC by using Visa.