Recently, I made an online purchase from a company and this turns out to be start of a nightmare. When I received the credit card statement, I realise that the amount in the statement is different from the amount in the merchant's invoice. Thinking that the merchant charged me wrongly, I gave them a call and they verified that they only charged me the invoice amount.
After this, I proceed to call the bank to find out more about the charges. The bank then mentioned that this transaction is a Direct Currency Conversion (DCC) transaction, where the merchant convert a foreign currency to Singapore Dollars when performing the charging. Therefore, it will inured a 0.8% admin fees on top of the transaction cost.
My instant reaction was "What?!". The merchant did not mentioned anything about conversion to me. Furthermore, although it was a foreign company, it has local presence in Singapore. Nobody buying something on a website with Singapore Dollar pricing would imagine that the merchant needs to perform DCC. If this is the case, the website should state it clearly so that consumer can make an informed choice.
So be careful when you make an online purchase, and always check if the merchant is engaging DCC when they sell you in Singapore Dollars. If not, you will be paying an additional hidden cost of 0.8% of the transaction price for nothing.
