Are you being charged additional banking fees for international online services like Netflix?

A few banks are charging additional fees for local payments made to international companies. Some bank users have noticed additional charges being applied to their accounts in relation to payments to Netflix, Amazon, Itunes, and others. When these customers complained, the banks claimed that they could no longer take on these costs for international company payments, even if the charges were rand-denominated to international companies. Though, when MyBroadband reached out to South African banks, the majority of banks did not pass these charges on to consumers, but absorbed them themselves. Banks have always charged fees for international transactions, from anywhere between 0.5% to 6.5%, as well as a 1.2%-5% exchange rate margin, depending on the currency, according to Expatica.com. – but generally not for rand-denominated services, which lies at the root of the present issue. More in this article from MyBroadband. – Ross Sinclair.

These banks charge extra fees for rand payments to Netflix, Spotify and other online services

By Hanno Labuschagne

Most South African banks don’t charge additional transaction fees for rand-based payments to international merchants, despite charges levied by payment provider schemes like Visa and Mastercard.

FNB customers recently highlighted this issue after the bank started charging such fees with its latest pricing revisions that came into effect at the start of July 2022.

Several customers had noticed small amounts going off their accounts with descriptions relating to services like Netflix, Spotify, and Flight Network.

FNB previously only charged these fees for payments made in foreign currency, but the new charges applied to rand-based subscriptions and purchases.

The bank had included a new phrase in its pricing guide, explicitly mentioning a 2% fee on international payments made in rands.

In an explanation to one of its unhappy customers, the bank said it could no longer absorb the cost due to the increase in international ecommerce.

As a result, payments to the following merchants would incur additional charges:

  • Airbnb
  • Alibaba
  • Amazon
  • Bolt
  • Bookings.com
  • BritBox
  • Facebook
  • Google Play Store
  • iTunes
  • Netflix
  • Spotify
  • Steam
  • PayPal
  • PlayStation
  • Xbox (not Microsoft ZA)

MyBroadband asked all of South Africa’s other major banks and looked at their pricing guides to find their approaches for rand-denominated payments to international services.

The banks’ responses made it clear that they were either choosing to absorb the costs by adding no charge or passing this cost onto the customer.

Five of the eight other banks we queried did not charge any additional fee on rand-denominated payments for international services.

These were Absa, African Bank, Bank Zero, Discovery Bank, and Nedbank.

Nedbank told MyBroadband it might charge a cross-border fee to smaller merchants that it was not aware were acquired internationally.

The bank also said it had an agreement with American Express, which exempted rand-denominated payments from the cross-border transaction levy.

Capitec, Standard Bank, and TymeBank’s approaches were similar to FNB’s.

TymeBank’s fee was the same as FNB’s — at 2% of the value of the transaction.

Standard Bank told MyBroadband it charged a tiered fee based on the type of account the customer held.

According to the pricing guides of every account listed on its website — from the entry-level MyMo to the top-end Signature offering — it charged 2.75%. That made it the most expensive of the banks we considered.

Capitec had a slightly different approach than the other banks, opting for a fixed fee instead of a percentage-based one.

It charges R1.00 for each transaction of up to R200 and R3.00 for payments greater than R200.

The table below summarises the charges various banks levy on international transactions paid in foreign currency and rand.

International payment charges by South African banks
BankCharge on transactions in foreign currency (Online and point-of-sale)Charge on rand-denominated international transactions
Absa2.75%No charge
African BankUnconfirmed amountNo charge
Bank Zero1%No charge
CapitecUp to R200: R1.00 Above R200: R3.00Up to R200: R1.00 Above R200: R3.00
Discovery BankNo chargeNo charge
FNB2%2%
Nedbank2%No charge
Standard Bank2.75%2.75%
TymeBank2%2%

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