Must we pay fees just to make a payment?

Aneth Ng-Lim

Posted at May 29 2023 03:32 PM

I hate paying fees. I especially hate paying fees just so I can make a payment. That’s twice the pain, when one should be enough. I confess that as much as I can avoid paying them, I would try to find a way, even if it means showing up personally, or waiting longer than needed, or going to another branch, or taking my place behind a long ATM queue.

These fees are called by many names. You may have seen them presented as convenience fee, or as processing fee, or as network fee. They started as small amounts, that later became a percentage of the transaction amount, and last night, I discovered a P1,400 fee just to pay for a budget airline ticket!

Years ago, the Department of Trade and Industry cracked down on surcharge fees, or charges passed on to consumers for using a credit card. Back then, most appliance stores had two price tags: one for cash and another for credit card. Choosing to pay with a credit card meant paying a higher amount as you will have to cover the surcharge fee, which store owners were quick to explain do not go to them, but actually go to credit card companies (for example BDO or BPI) and network providers (such as MasterCard and Visa).

With the DTI Department Administrative Order No. 10 issued in 2016, the imposition of a surcharge for the use of credit/ATM or debit cards for payment of purchases of consumer products and services became illegal. Retailers found violating this order can be fined up to P5,000 and/or imprisonment from one month to six months. A second conviction carries with it the penalty of revocation of the store’s business permit.

Let’s hope a government crackdown will happen soon on these “payment” fees that are being charged by banks, electronic wallet providers, other financial service companies, even budget airlines! Or at least rationalize them so there is transparency on why we have to pay what we are being asked to pay. Until then, here are some ways to avoid these fees.

#1 Find a fee-free option

Follow your payment trail to see if there are any additional fees being charged to you before check out. I used to settle my water, phone and internet bills via Shopee when they offered rebates until one day the rebates disappeared and they started charging a handling fee. It was a small amount but since I pay several bills, I decided to look for fee-free options. There is always at least one and if you can’t find it, you can call the customer service hotline of the company you are paying for best up-to-date information.

#2 Always ask for waivers

It never hurts to ask, and some banks, credit card companies, and other financial service providers may be willing to offer a one-time waiver, or a continual waiver if you meet certain conditions. In the case of credit cards, several fees that can be painful are over-limit fees (when you go over your credit line) and returned payment fees (when your check payment is returned for lack of funds or other reasons). For first-time “offenders”, most credit card companies are willing to waive the fee.

#3 Find no-fee workarounds

During the pandemic, I started paying our Meralco bills on their website for convenience. When the lockdown was lifted, Meralco began charging a convenience fee which the fine print stated will go to their payment partner. I tried to pay via Bayad Online and found the fee was even higher. Turns out I could enroll my Meralco account to my credit card and enjoy fee-free and on-time payments. Just keep asking and googling until you find a fee-free workaround.

If you are a heavy user of electronic wallets, check out the terms and conditions to enjoy zero cash-in fees. Some look for total transaction amount (cash-in for Gcash is free for P8,000 or less in a given month), or offer it free with certain partners (cash-in for Maya is free with Smart Padala and SM Department Stores). Try to stay within these fee-free zones as much as you can.

#4 If you must pay, shop for the lowest fee 

When it looks like you have to pay, then try to pick the cheapest option for you in the menu of payment options. But I would also suggest that you start looking for a way to end this “paying to pay” cycle as soon as possible by switching credit cards, or utility companies, or electronic wallets. If they value their clients’ business, these companies must give at least one option where they do not penalize customers for simply paying. 

#5 Know when to walk away

I was looking for the lowest airfare for a quick trip to Taipei and was directed to the website of a regional budget airline. The local budget carrier would cost a couple of thousand more, so I decided to give this Southeast Asian budget airline a try and was ready to check out when I discovered that all payment options require an additional fee between P1,400 to P1,800! That’s pretty steep for a "budget" airline, and the fee is nearly 10 percent of our airfare. There is no escaping the fee, whether I choose to pay via bank deposit, or via debit card, or via credit card. I decided to ask Google for tips and saw all these links advising travelers to beware of this airline's hidden charges. Good thing it was not a trip I really had to take, so I just closed the browser and said no go. 

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You may think that these fees are not much in the short term, but they can cost you in the long run. It’s always a good idea to read the fine print and check totals before making any payments. The less fees you pay, the more money stays in your wallet that can go to your savings and investments.


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