New DBS scheme removes forex fees for some travellers, online shopping

SINGAPORE — In a greater push for cashless payments among Singapore shoppers and travellers, DBS Bank on Wednesday (Jan 18) introduced a scheme that will eliminate high merchant and foreign exchange conversion fees for some customers when they make payments in the United States dollar, Japanese yen, and nine other foreign currencies. 

Starting on Wednesday, customers with a DBS Visa Debit Card linked to a DBS Multi-Currency Account (MCA) can use their card to spend overseas in the country’s given local currency, without additional charges. The savings will be greatest for Singapore customers who shop at overseas-based online stores such as Amazon, or who perform credit or debit card payments overseas and choose to pay in Singapore dollars.

The bank’s move, the first of its kind in South-east Asia, came as a poll conducted by Visa and DBS found that 95 per cent of respondents visit a money changer to exchange their local currency into foreign cash before they travel, so as to avoid the uncertainty of foreign exchange costs. The poll also found that 90 per cent of respondents will carry cash to cover the majority of their spending overseas.
 
“There’s a huge opportunity for us to convert foreign cash into electronic payments for Singapore travellers. Half the respondents actually said they would consider going cashless if they own a debit card that contains currencies such as US dollar, the yen, Aussie dollar and maybe the pound,” said Ms Ooi Huey Tyng, Visa’s country manager for Singapore and Brunei. 

Currently, when shoppers or travellers pay in Singapore dollars overseas, their payment undergoes a process called Dynamic Currency Conversion, and customers can incur additional merchant charges of between 7 per cent and 15 per cent.

DBS’ new initiative will allow eligible customers to avoid paying those fees by drawing on a virtual foreign currency wallet. 

For example, a Singapore traveller visiting the US can convert Singapore dollars into the greenback in his DBS Multi-Currency Account through mobile or Internet banking. When he arrives in the US, he can then use his DBS Visa Debit Card to pay for his purchases using the US dollars that he already has in his account.

“The amount is then directly deducted from the ‘US dollar wallet’ in your Multi-Currency Account. No more exchange rate, hidden charges and fees that we used to worry about … So you’re paying like a local consumer,” said Mr Jeremy Soo, head of consumer banking group (Singapore) at DBS.

Besides the greenback, foreign currencies these cardholders can also pay in are the Hong Kong dollar, Japanese yen, Thai baht, Australian dollar, New Zealand dollar, British pound, euro, Swedish krona, Norwegian krone and Canadian dollar.

Consumers TODAY spoke to noted that while DBS’ new initiative will allow them to save on conversion and administrative fees when making purchases at overseas-based online store, exchanging currencies at money changers also gives them the option of shopping for the best rate.

“Usually there are extra fees charged by the online merchant, bank or payment companies. If I can save on these, it’s definitely helpful because that’s extra savings,” said Ms Clare Lee, 27, who shops online frequently. 

However, Ms Lee said she still prefers to use cash when travelling as not all places accept cards for payment. But if she is running low on cash, the new payment solution is an alternative to withdrawing cash from ATMs, which is subject to additional charges and uncertain foreign exchange rates. 

Another consumer, 28-year-old Mr Teh, said he may still opt to pay in cash overseas if the exchange rates offered by money changers are more attractive than what DBS offers.

“I prefer to shop around for the best exchange rates before I travel, whether it’s DBS or any money changer. And I’d still carry some cash no matter what,” he said.