Why FNB charges an extra fee for Netflix, Spotify, and Google subscriptions

FNB has started charging an “international payment fee” for using one of its cards to pay for popular online services like Netflix, Spotify, Steam, and YouTube Premium.

Several FNB customers have complained about the fee appearing on their account statements from July, after FNB’s price changes for the 2022/2023 period came into effect.

While the bank’s latest pricing guide mentioned a 2% charge on international payments, it specifically stated this was for currency conversion.

However, the payments the customers had made were all rand-denominated.

One FNB customer found the bank had slapped him with a R3.18 fee on top of a Netflix Standard monthly subscription of R159, and R2.20 on a YouTube Premium Family plan priced at R109 per month.

The fees were listed separately in his transaction record.

This had never occurred in preceding months, during which he subscribed to both services. FNB only levied its previous 2.75% currency conversion charge against payments made in foreign currency.

Several other customers on the MyBroadband Forum reported the same charges.

They also complained of fees for other services such as Spotify, Steam, and PlayStation Plus, all of which had rand-denominated subscriptions.

The services confirmed to include the new international payment fee were as follows:

  • Amazon Prime Video
  • Bookings.com (local accommodation included)
  • BritBox
  • F1 TV
  • Google Play Store purchases for games and apps
  • Netflix
  • PlayStation Plus
  • Spotify
  • Steam
  • YouTube Premium

Interestingly, FNB itself encourages using some of these services to help customers earn points to move up in eBucks Rewards programme levels.

An FNB consultant told one of the complaining customers that it was charging these fees because the businesses to which the payments were made were not collecting revenue in South Africa.

“These transactions, although quoted in rand, are linked to international companies, and therefore should fall under international spend,” the bank said.

It justified this by explaining it incurred costs for international transactions.

“The bank has absorbed the costs on the rand transactions for as long as the transactions have been in place, but with increasing e-commerce (and international spend), this is no longer viable.”

“Therefore, from 1 July, all customers are charged a fee for these transactions.”

MyBroadband contacted FNB for comment, and it provided similar feedback.

FNB said it incurs “international transaction processing costs” on locally priced payments to services like Netflix, Airbnb, PayPal, Apple iTunes, Booking.com, Google, Amazon, Facebook, Bolt, Spotify, YouTube, Microsoft, Alibaba, and others. 

“Even though these transactions are denominated in rands, they still involve international companies, and the bank incurs international transaction processing costs,” the bank said. 

“We reduced the fee across all currencies to 2% for pricing simplicity and consistency, and it now also applies to rand-denominated transactions, in line with the industry norm.”

No currency conversion

South African banks charge a foreign transaction fee for payments made while abroad or online in foreign currency that ranges between 1% and 2.75%.

On platforms like Amazon.com, customers can choose to pay in US dollars or the applicable foreign currency and be subjected to their bank’s conversion fee.

Alternatively, they can use Amazon’s conversion tool and get charged in rand, negating the bank-dependent currency conversion rate.

However, Amazon generally offers a much worse exchange rate than South Africa’s domestic banks.

In such cases, the bank should supposedly not charge the foreign transaction fee — or at least not the full amount — as it should not be doing any currency conversion.

However, certain banks, such as Standard Bank, have been charging foreign transaction fees for payments of international payments regardless.

A source familiar with the financial workings of international streaming services told MyBroadband that this was a known issue in the industry and was not the banks’ fault.

“It is not specific to any streaming service or bank but related to the international payment processing setup with Visa and Mastercard,” they said.

Streaming services like Netflix, Amazon, and YouTube process all payments in South Africa with global processing partners, and settlement happens in dollar or euro even though prices are offered in local currency.

Banks might be exposed to forex exchange fluctuations, and some of them decide to compensate for this with an additional fee for consumers.


Now read: FNB testing tap-to-pay at toll booths

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Why FNB charges an extra fee for Netflix, Spotify, and Google subscriptions