The Bank of Thailand is continuing to freeze the attempt to charge an additional 1% fee to local credit cardholders, prompting card issuers to explore alternative solutions.
Some credit card issuers recently announced on their websites they are waiving the 1% fee charged for credit card payments made in baht when spending at merchants and online shopping platforms registered overseas.
In March, local card issuers said they planned to charge Thai credit cardholders a fee of 1% of total spending for foreign currency conversion when spending in baht at overseas merchants using Visa and Mastercard cards.
The fee, known as dynamic currency conversion (DCC), was to become effective from May 1 this year.
The fee also applies to the withdrawal of baht banknotes at ATMs overseas.
Shortly after the announcement, numerous local credit cardholders expressed dissatisfaction with the new fee, prompting the Bank of Thailand to urge all parties involved to create greater understanding among consumers and ensure fairness, as well as reasonable banking fees.
The surge in overseas payments via credit card and online payments on foreign platforms by local cardholders caused credit card issuers to absorb significant costs, leading to the attempt to pass on some of these expenses to consumers.
Currently local credit card providers charge a foreign currency conversion fee with a maximum rate of 2.5% of total spending for Thai-issued Visa and Mastercard cards for spending via foreign currencies overseas and online platforms registered abroad.
A source in the banking industry who requested anonymity said credit card issuers are likely to waive this fee indefinitely, in line with the central bank's directive.
The regulator wants credit card providers to understand cardholders' complaints about the fee, and is encouraging providers to seek alternative payment methods that benefit cardholders.
Earlier, Kulthirath Pakawachkrilers, president of the Thai E-commerce Association, said DCC will affect high-purchase spending for consumers who use Visa and Mastercard.
She said consumers may opt for other payment choices, such as e-wallets.
Ms Kulthirath said the platforms likely to be affected by the DCC include Spotify, VIU, Agoda, Booking.com, Expedia, Klook, Airbnb, Trip.com, Facebook, Google, TikTok, Paypal, Alipay, eBay, Amazon, Alibaba and Taobao.
Among the platforms that should not be affected are Shopee (Thailand), Lazada (Thailand) and Grab Taxi (Thailand), she said.
Ms Kulthirath said the Bank of Thailand report on e-payments last year put their value at 28.8 trillion baht, up 10.4% from 2022.
Card payments tallied 5.9 trillion baht, up 8.2% from 2022.