Key Takeaways:
Foreign transaction fees are extra charges that can apply when you pay in a foreign currency, or when a foreign merchant or bank processes the payment.
For Malaysian businesses, these fees often show up in less obvious places, like SaaS subscriptions billed in USD, overseas supplier payments, and ad spend on Google and Meta.
Airwallex lets you hold, spend, and pay in multiple currencies, so you can avoid repeated conversion costs and save on FX fees.
Foreign transaction fees are easy to overlook because they're often buried in exchange rates, card charges, or bank fees rather than listed as a separate cost. They can apply whenever you pay in a foreign currency or make a payment that is processed by an overseas merchant or financial institution.
On a single transaction, the amount may seem small. But for businesses paying overseas suppliers, software subscriptions, advertising platforms, or international service providers, those small charges can quickly add up.
In this guide, we'll explain what foreign transaction fees are, who charges them, where they typically appear, and how Malaysian businesses can reduce or avoid them altogether.
What are foreign transaction fees?
A foreign transaction fee is an extra charge that applies when your payment crosses a border or a currency. It is not the exchange rate, but a separate fee added on top of the converted amount.
It usually shows up for two reasons:
Currency conversion: you pay in a currency that is not Ringgit, so your card or bank converts the amount and charges a fee for it.
Foreign processing: a foreign merchant or bank handles the payment, even if you are billed in Ringgit. This is why an online order from an overseas seller can trigger the fee with no foreign currency at checkout.
This is where many businesses get caught. You might think the fee only hits travel or obvious USD payments. But it can apply to a subscription, a software licence, or an online order from a seller based outside Malaysia.
It also helps to tell the fee apart from normal currency movement:
What it is | Who sets it | |
|---|---|---|
Exchange rate | The market price of one currency against another | Moves on its own with the market |
Foreign transaction fee | A fixed charge added to each foreign payment | Set by your card network and bank |
The fee is shown as a percentage of each transaction. On a single payment it looks small, so it is easy to ignore. It becomes clear only when you add up a full year of foreign spending.
How foreign transaction fees work in Malaysia
When you spend in a foreign currency, the final cost is built from more than one charge. Knowing each part shows you why the figure on your statement is higher than the price you saw.
When the fee applies
The fee applies whenever your card touches a foreign currency or a foreign merchant. That covers spending overseas, withdrawing cash abroad, and online orders from sellers based outside Malaysia. It can also apply when you pay in Ringgit but the merchant processes the payment overseas.
Who takes a cut
Two parties usually charge you. First, the card network (Visa or Mastercard) adds a conversion fee. Second, your bank adds its own markup on top. The exact split depends on your bank.
Here is what major Malaysian banks charge for spending in a foreign currency:
Maybank: a 1% bank fee plus a 1.25% network conversion cost, so about 2.25% in total on Visa and Mastercard.¹
CIMB: a 1% administrative cost, plus the network rate.²
Public Bank: a foreign exchange spread of 1.25% on its credit cards.³
HSBC: a 1% conversion cost, plus the network rate.⁴
UOB: a 1% markup, plus a network charge of up to 1.22%.⁵
Standard Chartered: a 1% administration fee, plus the network rate.⁶
The information in this list has been reviewed to be accurate as of 29 May 2026.
Why the final cost is often higher than you expect
The network sets the exchange rate on the day it processes your payment, not the day you buy. That rate can move against you while you wait. Fees also stack. A card advertised with a "1% fee" can still cost you more than 2% once the network charge is added on top.
Dynamic currency conversion can cost you more
Some overseas merchants and ATMs ask if you want to pay in Ringgit instead of the local currency. This is dynamic currency conversion, or DCC. It sounds helpful, but it usually costs you more.
What DCC is
DCC lets the merchant convert the price into Ringgit at the point of sale, so you see a Ringgit figure before you pay. The catch is that the merchant sets the exchange rate, not your card network. That rate is almost always worse than the one Visa or Mastercard would use.
Why paying in the local currency is the better choice
When you pay in the local currency, your card network handles the conversion at its own rate.
When you accept DCC and pay in Ringgit, you face two costs: the merchant's marked-up rate, and often your bank's DCC fee on top. UOB, for example, charges a 1% DCC fee on the converted Ringgit amount.⁵ So you pay more, not less.
Simple DCC example in Ringgit
Say you buy something for US$1,000, at an illustrative rate of US$1 = RM4.20 (so RM4,200 before fees).
If you let your card convert, a card like Maybank's adds 2.25%.¹ If you accept DCC, you get the merchant's worse rate plus a 1% DCC fee.⁵
How you pay | Roughly what you pay |
|---|---|
In USD (let the card convert) | ~RM4,295 |
In RM (accept DCC) | ~RM4,400 |
The information in this table has been reviewed to be accurate as of 29 May 2026.
That is around RM100 more on a single purchase, just for choosing Ringgit at the checkout. The rule is simple: always pay in the local currency.
Where Malaysian businesses get hit by foreign transaction fees
For businesses, foreign transaction fees are mostly a recurring cost. Here are a few areas in which you might be incurring these fees:
SaaS subscriptions billed in USD
Most business software is priced in USD. When you pay for tools like cloud hosting, design software, or a customer database, the charge is converted to Ringgit and a foreign transaction fee is added.
A subscription that looks like USD99 a month actually costs more once the fee is applied, and it repeats every billing cycle.
Paying overseas suppliers
If you buy stock or materials from suppliers in China, Europe, or the US, card payments in their currency carry the same fee. Paid across dozens of orders a year, this adds into a significant cost.
Google and Meta ad spend
Advertising is one of the most common hidden sources. Google and Meta often bill Malaysian businesses in USD. Every ad payment is then a foreign currency transaction, so the fee applies on top of your media budget. The more you scale your advertising, the more you pay in fees.
Team expenses on personal or bank-issued cards
When staff pay for foreign tools or travel on personal cards, each transaction carries a foreign transaction fee, and you reimburse the full amount. You also lose sight of what was spent and where. Using personal cards for business spending makes the cost harder to track and harder to control.
How to reduce or avoid foreign transaction fees
Here’s how to reduce and avoid foreign transaction fees wherever possible:
Decline DCC
When a merchant or ATM offers to charge you in Ringgit, say no. Choose the local currency every time. This keeps the conversion with your card network instead of the merchant's worse rate, and it avoids the extra DCC fee.
Check the billing currency before you pay
Online, the currency is not always obvious. A site may show prices in Ringgit but process the payment overseas. Before you confirm, check which currency you are charged in, and whether the seller is based abroad. That tells you in advance if a fee will apply.
Avoid using personal cards for recurring business spend
Personal cards make foreign fees harder to see and control. Each staff payment carries its own fee, and you only find out at reimbursement. Moving recurring foreign spending onto dedicated business cards gives you clearer records and tighter control.
Consider multi-currency accounts and cards
A multi-currency account lets you hold foreign currencies and spend them directly, so you skip conversion when you already hold the currency.
Some banks offer this, and so do most cross-border payment fintechs like Airwallex. The right setup can remove the fee on most of your foreign payments.
Why Malaysian businesses choose Airwallex
Airwallex lets you hold money in the same currencies you spend and receive. When you pay in a currency you already hold, the payment settles like-for-like in supported currencies, and this completely eliminates FX fees.
When you do need to convert, you can access competitive rates that save you up to 80% on FX fees compared with traditional banks.
Here’s what you get with Airwallex:
Hold and pay in the same currency
With an Airwallex multi-currency business account, you can hold 20+ currencies. Collect from international customers in their currency, then spend it later without converting back and forth.
Save up to 80% on FX fees
Airwallex FX rates are both transparent and competitive, at 0.4% to 0.6% above interbank. With these rates, you save up to 80% on FX fees as compared to traditional banks.
Spend with no foreign transaction fees
Airwallex corporate cards let your team spend directly from held balances. There are no foreign transaction fees when you spend from your balances, so software, ad spend, and supplier payments stop carrying a markup.
Pay suppliers at competitive rates
Airwallex lets you pay suppliers and vendors in 200+ countries, with 94% of transfers going through local rails with no transfer fees. You skip the SWIFT fees and stacked markups of a traditional bank transfer, and your supplier gets paid faster.
Frequently asked questions (FAQs)
Do foreign transaction fees apply to online purchases?
Yes. The fee can apply when you pay online in a foreign currency, or when the seller is based or processes the payment overseas, even if the price shows in Ringgit.
What is a typical foreign transaction fee in Malaysia?
For most Malaysian credit cards, your bank's markup is usually around 1%, but the all-in cost is higher once the network fee is added.¹ The exact rate depends on your bank and card.
Is a foreign transaction fee the same as a currency conversion fee?
Not quite. The conversion fee is the network's charge for converting the currency. The foreign transaction fee is the full cost, usually that network fee plus your bank's markup.
Can I avoid foreign transaction fees completely?
Sometimes. If you hold and spend the same currency through a multi-currency account, you skip the conversion and its fee. Airwallex corporate cards let you spend from held balances with no foreign transaction fees.
Do debit cards charge foreign transaction fees too?
Yes. Debit cards are treated like credit cards when you spend in a foreign currency or with a foreign merchant, so the fee is not limited to credit cards.
Sources:
https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/banking_fees/credit_card.page
https://www.cimb.com.my/en/personal/help-support/rates-charges/profit-rates-charges/fees-and-charges/credit-cards.html
https://www.pbebank.com/media/gmkfrx0f/pds-pib-credit-card-en.pdf
https://www.hsbc.com.my/content/dam/hsbc/my/docs/credit-card-product-disclosure.pdf
https://www.uob.com.my/personal/useful/fees/creditcard.page
https://www.sc.com/my/credit-cards/journey/
This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [[email protected]]. Airwallex (Malaysia) Sdn. Bhd., a company incorporated under the laws of Malaysia with company registration number 201801007747 (1269761-X), is regulated as a licensed remittance business under the Money Services Business Act 2011 (Licence number 00743 with an expiry date of 3 August 2028, an E-Money Issuer and a registered merchant acquirer under the Financial Services Act 2013.
Cherie Foo
Growth Content Manager
Cherie is a Growth Content Manager at Airwallex, where she develops content for businesses in Singapore and across Southeast Asia. She focuses on turning complex topics like cross-border payments, business accounts, and spend management into clear, practical guides that help founders and finance teams make confident decisions.
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