Banks may have to rethink their reliance on credit card fees as a driver of revenues as technology savvy travellers are resorting to cash or alternate payment apps to avoid being slugged with high foreign transaction fees and usurious exchange rates.
In a report that should disturb all banks relying on overseas charges as a growing source of revenue, TransferWise said that using a credit card to pay for overseas purchases could cost an average Singaporean as much in fees as a one day holiday in Bangkok. The firm estimates a typical Singaporean would lose as much as $926 (US$650) in additional fees and currency exchange losses.
One way Singaporeans are avoiding hefty credit card fees is to simply use cash, notes a separate study by J.D. Power.
Seventy percent of Singaporeans still prefer to use cold hard cash when making purchases abroad, 50% of the total overseas spending by Singaporeans are still cash-based, the report added.
Lofty transaction fees and poor foreign exchange rates were cited as the two main reasons why they avoid using cards. Singaporeans also fear fraudulent transactions overseas.
Such pain points manifested in the staggering $1.1b lost yearly to fees associated with overseas card expenditure, or 4% of the $27.3b estimated total overseas expenditure that Singaporeans make via cash and cards, a study commissioned by tech company TransferWise revealed.
“Singaporeans are avid travellers, but banks have not provided an affordable, transparent card option for spending abroad, either to individuals or businesses,” says Surendra Chaplot, TransferWise’s head of APAC card product. He noted that banks could still do better in the area of transparency.
Bu hikaye Singapore Business Review dergisinin April-Jun 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Singapore Business Review dergisinin April-Jun 2020 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
How TikTok powers cross-border shopping for Singapore retailers
The yellow basket feature allows viewers to purchase items directly during livestreams.
Income Insurance seeks to fill billion-dollar financing gap in climate transition
The region skimmed its carbon intensity by 2.8%, far below the 17.2% needed.
SIDS fights misconceptions in interior design with accreditation, education
The organisation is setting up a digital platform to speed up accreditation from 6 to 2 months.
IHH's proton therapy takes aim at tumours with precision and low risk
Leaving surrounding organs at risk during cancer treatment might become a thing of the past.
SingPost pivots from mail to logistics as e-commerce demand drives growth
It is banking on e-commerce to drive its logistics unit, which accounts for 69% of revenue.
Singapore needs SEA neighbours to power renewable energy transition
Experts favour Malaysia and Indonesia as renewable energy import sources.
Singapore's architecture blueprint spurs push to tackle brain drain in other sectors
Paying the country's architects just right will hopefully stop the brain drain.
Millionaires eye a piece of Singapore's rich colonial era
The country's remaining 6,500 shophouses are in high demand amongst the ultra-rich.
HDB resale portal unlikely to cut out property agents
The portal enables sellers to list their units themselves.
Factory and retail spaces shine as housing heads for worst market slump in 16 years
Its manufacturing and tourism rebound will spur demand for industrial and high-street shops.