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International Transaction Fee on US$ Merchant account

Latest Bank Ripoff.

     
8:40 pm on Jan 26, 2009 (gmt 0)

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One of our customers was charged an International Transaction Fee on a US$ merchant account.

We are a Canadian Company, however we went to the extra effort in dealing with PaymentTech, in obtaining separate US$ and CAN$ merchant accounts, to avoid any currency conversion fees for our American customers.

In 10 years of eccomerce, we have never received seen a International Transaction Fee on a US$ account before.

First, I don't understand, that with a US$ merchant account with an american provider processing the transaction against an american credit card payment gateway, how the bank figured out we were a Canadian company.

We informed the customer to contact her bank to get the charge reversed.

However I am getting worried that this may be a trend for the future, where there is some flag on our US$ merchant account flaging that we are a foreign merchant.

It's frustrating, that you setup your systems so your customer will avoid things like foreign exchange, and associated fees, and the US banks find out ways to screw the customer anyways.

Hopefully this was a coding error, and not an indication of things to come. Anybody else see these?

9:12 pm on Jan 26, 2009 (gmt 0)

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Technically, a merchant account is 'based' where the money goes.

Is the DDA for the PaymenTech account at a US or Canadian Bank?

9:53 pm on Jan 26, 2009 (gmt 0)

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lgn1,

Yes, its relatively new. We have a US Bank Account at a US Bank in Chicago and we still had it happen to at least one of our American customers. I guess it has to do with our mailing address. It was fine for 9 years, suddenly it changes.

There must be some new banking regulations or something for this to happen to the both of us.

Very frustrating and it may force us to incorporate in the US .. maybe that is the goal.

10:10 pm on Jan 26, 2009 (gmt 0)

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The money is going into a US dollar account at a Canadian bank, that has offices in the USA. I always assume the US dollar account is associated with the Canadian Bank's US offices, but I guess this is not the case.

I was told by the merchant provider, that I need to open an account in the states, but due to the partriot act and other reasons, we would need to incorporate in the USA, which opens a whole bag of tax issues. It's not going to happen.

Since the funds are being deposited into a Canadian Bank without conversion, VISA and Mastercard charges a same currency international fee of 0.8% since April 2008. Amex does not charge this fee on same currency transactions.

I guess the banks are just begining to pass these charges on to the consumer. For some reason, the customer in question, deals with a bank that added another 4% padding to the fee.

The only satisfaction Im having is that due to the fact that American banks have such an excellent record of risk management, they will be soon be nationalized or bought out by the Canadian banks anyways :)