Amazon Singapore To Apply 0.5% Surcharge on Visa Credit Card Users

If you use a Visa credit card for your Amazon purchases, you might want to consider using a different card. Starting 15 September 2021, Amazon Singapore will apply a 0.5% surcharge on Visa credit cards transactions. Currently, the company plans to impose the surcharge on purchases of Singaporean users only.

Credit: Amazon

Most orders on Amazon.sg will have the surcharge applied to them. But Amazon Fresh groceries, in-app purchases from Amazon-owned site Twitch and other digital goods and services including Amazon Prime will not be affected by the change in fees.

The online retailer attributed the rise in transaction charges to Visa’s steep processing fees, and sent out emails advising customers to use a debit card or non-Visa credit card as the payment method instead to avoid the surcharge.

Credit: /u/Logical_Ad_3556 on Reddit

As an incentive, Amazon has allegedly sent out emails to selected users, offering a S$30 gift card once a new debit card or non-Visa credit card has been added as a payment method.

When asked if it will apply the surcharge to Amazon services in other countries, Amazon stated that the financial technology (fintech) concern is a global issue.

"Singapore is the first country we’ve decided to make changes in, but this is a global issue and is not isolated to Singapore," an Amazon spokesperson answered via email.

In an emailed statement, the company lamented how Visa’s payment costs are going up despite fintech developments.

"The cost of accepting card payments continues to be an obstacle to providing the best prices for customers. These costs should be going down over time with innovation and technological advancements, which allows merchants to reinvest savings into low prices and shopping enhancements for customers. Yet, despite these advancements, some cards’ cost of payments continue to stay high or even rise," wrote the online marketplace.

Credit: Grab

Earlier this year, Grab Singapore carried out a similar change in policy on 1 June 2021 as it added a S$1 processing fee to GrabPay Wallet top-up transactions paid with Visa credit cards. However, users who will top up S$400 and above will not be required to pay the fee.

The ride-hailing app explained that the surcharge will offset Visa’s service costs. Considering this, Grab encouraged users to top up their GrabPay Wallet with Visa debit cards, Mastercard or American Express credit cards to help them circumvent the price hikes.

Just like Grab, YouTrip began charging customers an extra S$1 for every top-up paid with a Visa credit card. This payment scheme came into effect on 1 August 2021.

Written by Sophia Lopez