Shopping online with a credit card? Here are 9 things you should know

1.    I made an online purchase and clearly saw the Singapore dollar price listed on the merchant’s checkout page and the bank’s SMS notification. Yet when I received my credit card bill, there was a small additional charge of less than 1% on the amount. Is my bank over-charging me?

This difference in amount could possibly be due to the international transaction fee. This fee is charged by some card issuers when your payment transaction is sent overseas for processing. Some online merchants, big or small, foreign and local, process payment transactions internationally, even though their goods and services may be priced in Singapore Dollars for your convenience. As your purchases make their way around the world to your doorstep, your payment also travels around the world to reach your merchant. The following table gives an example of how international transaction fees are charged to your card. We have used an international transaction fee of 0.8% for illustrative purposes. As your bank processes your payment only after you have checked-out (i.e. clicked ‘confirm payment’), the check-out amount does not include the international transaction fee which will only be subsequently reflected in your card statement.

Singapore Dollar Amount International Transaction Fee  Final Amount Payable
 S$1,000  S$8  S$1,008
 Agreed at the time of purchase  Applied at a later time to the Singapore Dollar amount  Reflected in your card statement


2.    I don’t want to pay this international transaction fee. Can I instruct the bank to charge me in the foreign currency? Will I incur any other fees when I make online purchases in foreign currency using my credit card?

Whether you choose to pay for your online purchases in local or foreign currency, the international transaction fee will be charged by your card issuer if the payment transaction is processed overseas. For transactions made in foreign currency, you will typically see one amount in foreign currency and one amount in Singapore Dollars reflected in your credit card statement. The final amount that you see in Singapore Dollars would include any foreign exchange fee, international transaction fee, and any other applicable administrative fee charged by the card issuing bank.


3.    I’m thinking of buying an item online but it is listed in a foreign currency. Is the currency conversion done by the merchant or my bank? Is there a fixed rate of exchange for online purchases?

Transactions overseas or online charged in a foreign currency will be converted to Singapore Dollars by your card issuer. The exchange rates used to convert these transaction amounts into local currency may vary day-to-day and from bank-to-bank. Check with your card issuer on how the conversion is calculated and if there are any other administrative charges that are factored into the final Singapore Dollar amount reflected in your statement.


4.    Can I get a refund from the credit card issuer after purchase?

Once a card transaction is approved, the consumer is required to make full settlement of the amount incurred to the credit card issuer. However, if you have not authorised the transaction, you may wish to inform your card issuer who would be able to assist you in resolving the dispute. In any case, make sure you consider carefully before committing to a purchase!


5.    I made transactions on my credit card online but I did not receive any transaction alerts. Should I be concerned?

You will receive a transaction alert from your card issuer only when your card transaction exceeds a pre-defined threshold. You should check with your bank on the current transaction alert threshold set for your payment card. You may adjust the threshold according to your comfort level. You may even request to be alerted for all transactions charged to your payment card.


6.    When I make an online payment at some merchants, I am prompted to enter a One-Time Password (OTP). What is this OTP used for?

The OTP is generated when cardholders make a transaction at a merchant website that uses 3D Secure, an added layer of security for online payment card transactions. The OTP is used to verify that you are the cardholder and can be effective in protecting you against credit card fraud.


7.    Why am I not prompted to enter an OTP when I transact at some merchants?

Only some online merchants have implemented 3D Secure. Merchants who are not using 3D Secure will not ask cardholders to be authenticated by their card issuers. Hence you will not be prompted to enter an OTP. You may wish to note that customers are not liable for fraudulent transactions that are performed using their card information at non-3D Secure merchants.


8.    I bought something from an online store using my credit card and later received an e-mail that appears to be from the online store. The e-mail asked for my credit card details as the merchant has encountered issues with the charging of the transaction. Should I respond?

No. Any online transactions should only be done over a proper and secured channel; under no circumstances should you reveal your credit card details to an unidentified third party. The e-mail may be a phishing e-mail out to scam your money. Contact the merchant or your card issuer directly instead.


9.    How can I protect myself from card-fraud when using my credit card online?

Ideally, you should shop at reputable and legitimate merchants. Check if the merchant you are dealing with is using a secured website (i.e. the website address is “https:” instead of only “http”). Ensure that your computer’s firewall, anti-virus and anti-spyware applications are updated to minimise the chances of malicious codes, worms or viruses being loaded into your computer. You should also make it a habit to clear your cache after a shopping session to ensure that no confidential information is stored on your computer. Do not perform online transactions using computers in public places such as cybercafés, where your personal information is subject to a higher risk of being exposed and used.