DBS Bank has unveiled its plans to help customers save on their overseas spending by avoiding high foreign exchange (FX) and conversion fees.
Starting from 18 January, customers with a DBS Visa Debit Card linked to a DBS Multi-Currency Account (MCA) can use their card to spend overseas in the country’s given local currency without any additional charges, which is the first of its kind in Southeast Asia.
DBS said that the savings will be greatest for Singapore customers who shop in overseas-based online stores or who perform credit/debit card payments overseas and choose to pay in SGD. When they pay in SGD overseas, their payment undergoes a process called “Dynamic Currency Conversion” (DCC) and customers can incur additional merchant charges of between 7 percent to 15 percent.
DBS also said that customers who choose to pay in the country’s local currency also get to avoid any additional charges such as FX fees and any other conversion charges. For example, a Singapore traveller who intends to visit the U.S. can change currencies via their DBS MCA account (e.g. from SGD to USD), which offers competitive FX rates.
It noted that this can be done on-the-go or when rates are favourable via DBS mBanking or iBanking. When spending in the U.S., the traveller can simply use their DBS Visa Debit Card to pay for purchases in USD. The amount is then directly deducted from their DBS MCA’s USD balance with no other charges incurred.
Jeremy Soo, Head of Consumer Banking Group (Singapore) at DBS, said, “With travel and ecommerce expenditure rising rapidly in Singapore, we decided to be on the front foot and introduce a game-changing scheme for customers and the industry. With the DBS MCA and DBS Visa Debit Card, customers can convert their currencies at a competitive rate using DBS iBanking or mBanking without needing to make a trip to the money changer.”
“They will also get to skip FX fees and conversion charges for their overseas spends. Our hope is that this will incentivise Singaporeans move towards the security and convenience of cashless payments,” he added.
DBS said that it introduced the scheme particularly timely given that it has witnessed close to a 30% increase in foreign currency payment volumes – which includes foreign currency eCommerce and point-of-sales payments – from debit cardholders since 2014. For DBS Visa Debit cardholders in particular, foreign currency payments make up more than 20% of total payments. DBS also sees some SGD560 million in overseas cash withdrawals every year by customers.
Ooi Huey Tyng, Visa Country Manager for Singapore and Brunei, said, “Travel is becoming increasingly popular amongst Singaporeans and based on the Consumer Travel Poll jointly conducted by Visa and DBS, more than half of them take two to four leisure trips a year. Visa cardholders are increasingly using their payment cards when they travel and cross border transactions by Singapore debit cardholders is growing close to 15% year-on-year.
“Today, 95% of Singaporean travellers change money into foreign currencies before they travel and the main reason is because they want to avoid the uncertainty of foreign exchange costs. The introduction of this first in market product in Southeast Asia by DBS and Visa supports Singapore’s move to be truly cashless,” he added.
DBS noted that customers will need to sign up for both the DBS MCA and DBS Visa Debit Card to enjoy the benefits of the scheme. In addition, the customer’s DBS MCA must be linked to their DBS Visa Debit Card as a primary account.
Further details on how to be eligible for the scheme’s benefits are available at go.dbs.com/sg-mca.