Making e-payments when you travel: How to save on fees and guard against fraud

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SINGAPORE – Digital payments may be catching on around the world, but a recent study has found that 56 per cent of people in Singapore use cash most often when making payments overseas.

 

Their main concerns are bank charges levied on overseas spending, and security risks such as malware and data breaches.

 

It is not just older folks who prefer physical currency. Even digital natives aged 16 to 24 say it helps them stick to a budget, with two-thirds of them – higher than the national average – making cash their top choice.

 

These are some of the findings from a study conducted in May for The Straits Times by market research firm Milieu Insight, which polled 1,000 respondents here.

 

Singaporeans’ preference for cash payments is in line with the global average of 58 per cent, according to an August 2022 study by YouGov, an international online research data and analytics technology group.

 

This is partly due to the prevalence and perceived security of e-payment options overseas.

 

More people turned to cashless payments in countries such as Australia and the United States, compared with neighbouring Vietnam, Thailand and the Philippines.

 

Frequent flier Koo Sok Mien, 43, who travels about once every two months for work, sticks to cash in countries such as Thailand, where she believes fintech developments are less advanced.

 

A close shave with credit card fraud in 2022 has also made her cautious.

 

After returning from a trip to Amsterdam, she realised multiple charges were still being made on her card, which she immediately cancelled and reported.

 

“Somehow, my details had been stolen while I was there. If I return to Amsterdam, I would be more inclined to use cash,” says Ms Koo, who is the Asia-Pacific business development and marketing vice-president for a robotics company.

 

But she uses bank-issued credit cards in countries such as Japan and Australia, where e-payments are common. Her pick is Citibank’s PremierMiles card, which she uses to accrue KrisFlyer miles.

 

Her spending habits are in line with those aged 35 to 54, who favour bank-issued credit cards for their convenience, as well as collecting air miles or cashback.

 

Meanwhile, consumers aged between 25 and 34 lean towards digital multi-currency accounts offered by YouTrip, Wise and Revolut. These tout lower foreign exchange rates and charge minimal to no currency conversion fees.

 

In comparison, DBS charges up to 3.25 per cent for transactions made overseas or through overseas-based online merchants.

 

Fintech companies say they have no less stringent security measures compared with banks, such as two-factor authentication for logins and round-the-clock monitoring for suspicious activity.

 

YouTrip co-founder and chief executive Caecilia Chu says: “We noticed that user education is most effective when people are alerted to unusual activity, such as multiple low-value transactions during a short time frame. This allows us to provide users with tips on fraud prevention when we check in with them to verify the transactions.”

 

As more countries embrace cashless payments, customers will be nudged towards making the shift.

 

On a trip to South Korea in May, recruiter Sunny Lo, 27, mostly used the American Express Singapore Airlines KrisFlyer credit card and found that even small retailers were going cashless.

 

“Many places in Busan and Seoul preferred e-payments and some were reluctant to take cash or had difficulty coming up with change,” she says.

 

So, the next time you travel, spend smartly and guard against fraud with these e-payment tips.

 

1. Making a payment to an unfamiliar company, or in a foreign country? Use virtual cards for an additional safeguard.

 

Wise lets a user hold up to three virtual cards, which exist on his or her mobile phone. Users can freeze or delete these any time, and generate new card details when needed.

 

Think of this like calling the bank to cancel and replace a credit card in case of a fraudulent transaction – except that you can do this yourself and get the new card details immediately.

 

Wise’s senior product manager Yu Mei Lay He says customers might use each virtual card for a different type of expense, such as hotel reservations and online bookings, and freeze cards after each payment.

 

YouTrip, meanwhile, rolled out a similar feature on Monday, issuing users a virtual card with a different 16-digit number from the physical one. This can be locked, terminated and replaced instantly without restrictions to the physical card, so that users will not be stranded without a means of payment.

 

2. Banks such as DBS allow you to block a credit card between payments or if you suspect a fraudulent transaction.

 

I used this feature recently when making payment to a foreign travel agent that was slow to deliver the goods, and wanted to guard against further charges.

 

3. Exchange foreign currencies when rates are low and store them in an e-wallet for future trips.

 

YouTrip allows users to do this for 10 currencies, including the Japanese yen and Australian dollar, while Wise supports around 50 currencies.

 

For instance, people in Singapore have been storing the Japanese yen for future trips since 2022, when the currency softened. The yen now trades at around 103 to one Singapore dollar, compared with around 80 yen in 2019.

 

• Streetwise is a series on smart travel tips. For more travel stories, go to str.sg/travel.

 

 

Source: The Straits Times © SPH Media Limited. Reproduced with permission.

 

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