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A Singaporean's Guide to Visa Credit Card Surcharge Fees

profileJoel Koh

Every so often, we see some drama brewing in the world of finance.

The latest episode of this drama is a tussle between Amazon and Visa.

It all started when Amazon announced that it will impose a surcharge of 0.5 per cent on all Visa transactions for purchases made on its Singapore site Amazon.sg from 15 September 2021.

In a statement to The Straits Times, an Amazon spokesperson gave the reason for imposing this surcharge:

“These costs should be going down over time, with innovation and technological advancements, which allow merchants to reinvest savings into low prices and shopping enhancements for customers,”
“Yet, despite these advancements, some cards’ cost of payments continues to stay high or even rise. As a result of Visa’s continued high cost of payments, a surcharge is being added to Visa credit card payments in Singapore.

In response, Visa stated that:

Visa maintains that the simplest, most economically efficient and consumer-friendly approach is for merchants to not surcharge consumers for using cashless payment methods. Consumers who choose to pay with cards should have to pay for only the cost of the service provided or purchased item. Merchant surcharging has a negative impact on consumers and businesses.

This is not the first time that companies have been imposing a surcharge for using Visa credit cards and other credit cards.

Here is all you need to know about companies imposing a Visa surcharge fee!


TL;DR: Companies in Singapore Imposing Visa Credit Card Surcharge

MerchantFeeRemarks
Amazon.sg0.5% surcharge on purchasesFrom 15 Sep 2021
Grab$1 fee per top-up <$400From 1 Oct 2021
Taxis (ComfortDelGro/Trans-Cab/Premier)10% administrative fee on faresApplied when you flag down or book Taxis directly

Fee will be charged when you use other credit cards too
YouTrip$1 fee per top-upFrom 1 Aug 2021

Currently, there are a few companies in Singapore that have implemented Visa credit card surcharge fees or have plans to impose Visa credit card surcharge fees.

This is allowed as there is no law in Singapore that prevents merchants from passing on merchant credit card fees to customers via surcharges.

However, Visa frowns upon this practice as stated in their official U.S. site:

Surcharging remains prohibited outside the U.S. unless there is a local law or variance that requires merchants be permitted to engage in the practice.

But in reality, enforcement of this is not as straightforward for Visa.

Amazon Singapore Visa Surcharge

Case in point, Amazon.

Source: u/longtongislife on r/Singapore | Email sent by Amazon.sg to its users on 10 Aug 2021

Amazon recently announced that from 15 September 2021, it will be levying a 0.5 per cent surcharge on most purchases made using a Visa credit card on its Singapore site Amazon.sg.

But it’s all not bad news, the surcharge will not be levied on payment for other goods and services like Amazon Fresh groceries, Amazon Prime subscription fee and digital purchases on Amazon-owned streaming service Twitch.

For now, this surcharge is also limited to Amazon.sg.

This means that you will not have to pay this surcharge when you purchase products from Amazon.com and ship them to Singapore.

Amazon Free Gift card Promo

To soften the blow, Amazon.sg is currently running an offer where they are giving away a $30 Amazon.sg gift card for adding a qualifying payment method to your Amazon.sg account.

Amazon.sg announced that from 30 July to 30 August 2021, the first 7,500 eligible customers who ‘add a valid non-expired debit card, Mastercard, American Express or Union Pay Card to their Amazon.sg account’ will receive a free $30 Amazon.sg gift card to your Amazon.sg account.

Do note that the offer is limited to one Amazon.sg Gift Card per Amazon.sg customer account. To qualify, you will need to have received an email from Amazon.sg for this offer or have been served an advertisement.

Source: Amazon

So do check your Amazon.sg emails or browse around the Amazon.sg website to see if you are served the ad.

Here’s how to add a qualifying payment method:

1. Sign in to your Amazon.sg account and go to “Your Account.
2. Click on “Your Payments,” then add a qualifying payment method (debit card, Amex, Mastercard, or Union Pay card).
3. The Amazon.sg Gift Card will be applied to your account within 30 days. Terms and Conditions apply.

However, you will have to meet the qualifying criteria. Be sure to read the terms and conditions of this offer.

Amazon’s tussle with Visa over surcharges is not new.

There have been other instances where companies have implemented a Visa surcharge.

Grab Visa Surcharge

In March this year, Grab announced that they will be implementing a $1 processing fee for all GrabPay wallet top-ups made using a Visa credit card, starting 1 June 2021.

However, Grab thereafter announced that the implementation of the processing fee will be postponed.

But a few days back, Grab updated that the $1 fee will be charged starting from 1 October 2021.

Here’s all you need to know about this processing fee and how to avoid it:

Singapore Taxis Administrative Fee

That’s not all.

Back in 2013, Visa had a very public falling out with Taxi companies in Singapore who were imposing a 10 per cent admin fee for using a Visa credit card or any credit card to pay for fares.

Although Visa requested the taxi companies waive the fee, the taxi companies did not back down.

As a result, Visa payment services for ComfortDelGro Corporation Ltd (SGX: C52), Trans-Cab and Prime taxis, Premier and SMRT were suspended from July 2013.

But in 2015, Visa reinstated its payment services for ComfortDelGro Corporation Ltd (SGX: C52), Trans-Cab and Premier taxis with the 10 per cent surcharge.

This is less of an issue now as you can now book taxis using third-party apps like Grab and Gojek without the 10 per cent surcharge when paying with your credit cards.

P.S. DBS will waive the 10 per cent administrative fee for ComfortDelGro if you pay with your DBS/POSB Mastercard & Visa Cards and book using:

  • ComfortRIDE via ComfortDelGro Booking App
  • Street Hail via ComfortDelGro Booking App
  • The promotion is valid from 26 July 2019 – 31 January 2023.

YouTrip Visa Surcharge

In addition, YouTrip has also announced that from 1 August 2021, a $1 processing fee will be charged for all top-ups made using a Visa credit card.

Visa/Mastercard Credit Card Merchant Fees Singapore

But, you might be wondering what are the high fees that these merchants are going on about?

To get an idea, you can look at what DBS has published about merchant credit card fees.

On top of the fee levied per transaction, you can see that merchants are paying quite a bit in initial startup fees as well.

How to Avoid These Fees

Here are the ways you can avoid the Visa surcharges for Amazon, YouTrip and Taxis.

For Amazon.sg, you could always switch to MasterCard debit cards/credit cards or use Visa debit cards with Amazon.sg rewarding eligible users to switch.

For YouTrip, you may continue to top up your wallet for free via all other available methods, including:

  • PayNow
  • Mastercard debit or credit cards
  • Visa debit cards

As for taxis, you should only book taxis via third-party ride-hailing apps like Grab or GoJek to avoid paying the credit card administrative fee.

But do note that you will have to pay booking fees of $2.60 – $8.30 when you make a normal or advance booking of a taxi using those ride-hailing apps.

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About Joel Koh
History student turned writer at Seedly. Before you ask, not a teacher. My time as a history student has equipped me with the skills to evaluate the impact societal development has on financial and nonfinancial events.
You can contribute your thoughts like Joel Koh here.

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