Australians hit with international transaction fees for Windows Phone 7 app purchases (updated)

What’s worse than getting billed in a foreign currency with an international transaction fee for Windows Phone 7 marketplace purchases in Australia? Getting billed in Australian Dollars (AUD) with an international transaction fee of course.

For Windows Phone 7 users in Australia, using credit card billing to purchase apps and games on the WP7 marketplace could cost much more than advertised.

The issue seems to lie with how and specifically where Microsoft is billing Australian users. Even though Microsoft took the liberty of charging purchases in the correct local currency, however they’re processing these transactions in Singapore (Microsoft’s Asia Pacific head office) which unfortunately makes these international transactions.

Whilst different Australian banks and card issuers specify their own international transaction fees, on average it’s a negligible 3%. But true to the evil nature of banks, these transaction fees could be rounded up to the nearest dollar.

Thanks to Microsoft’s individualised billing of each purchase, the infamous $0.99 mobile application actually incur a 101% surcharge.

I’ve since contacted Microsoft Australia to look in to the issue and hopefully offer a solution soon. In the meantime, Australian WP7 users should either switch to carrier billing or hold off buying more fart apps.

Although I’m fairly certain Microsoft is not intentionally screwing with Australians (because we had universal health care for so long :P), I wouldn’t blame you if you’re starting to doubt it.

Update: I’m also reading some users are claim not to be charged any international transaction fees for WP7 apps purchased in Australia with a credit card. I’m now trying to find out how those transactions are different.

38 insightful thoughts

  1. Its been the case for a while now. With Xbox Live purchases too! Ripped off with the use of Microsoft Points, then incurring a Bank fee for the transaction…

  2. Well this isn’t something I am looking forward to. I just purchased my first app tonight “Flight Control” so I will wait to see before I purchase another app.

    Lucky most I have installed are currently free atm.

  3. All these International Fees are tied to some government regulations invented some hundred years ago before the world is united by the internet. I am surprised how much we are being screwd with VATs and Customs etc charges for nothing, and the worst thing is you can’t do anything about it.

    Worst still, you loose money each time you cross currency boundaries, and guess is laughing all the way to the bank? Yes the banks! Ridiculous in this 21st century.

    Until we the Internet generation protest these archaic laws, we will not be free of the burden imposed upon us by these old people. The world is now a village, our financial transactions should also be treated as such.

  4. @McAkins,

    Not true for the iTunes App store. You are billed in Australian Dollars and that’s it. No international transaction fee. Of course Apple might have included that in the price but I certainly can’t see it and wouldn’t be as high as what Microsoft is charging. The word double dipping comes to mind.

    I think Microsoft needs to fix this. Otherwise I the Windows Phone 7 store will go down as just another poor copy of it’s competitors.

  5. thier zune originals online store in canada dont chage tax & as for ms points were just charged the predetermined amount in our own currency not like nintendo who charges US in funds for nintendo points(wii/dsi shop CH.)

  6. International fees have nothing to do with governments today – they’re a complete fabrication by financial institutions and card vendors. Let me give you an example – in Sweden, there are no surcharges to use your card overseas in foreign currencies and their exchange rates are reasonable. They don’t even have fees if you withdraw cash from your card. These fees simply line the pockets of bank board members and shareholders.

    1. I’m with Telstra but even when I hit the app store it says I don’t have a credit card on file and I need to attach one via zune.net. Where do I set this up?

  7. This is crap. First, our prices are much higher than they should be given the value of our currency. Second, you can’t charge someone in local currency and then charge an international transaction fee.

    FFS Microsoft, stop screwing Australia around. Give us the same pricing, regional features and services that you give to Americans.

  8. Microsoft, please fix this! Otherwise, the iPhone guy who sits next to me will never let me hear the end of it!

    Question: do you get stung by these charges even if you’re having the charges billed to your carrier as opposed to direct credit card billing?

  9. So far the carrier billing doesn’t add the charge (I can see in yet to be billed).

    Not only should Microsoft simply move where the charges are being made, but banks should seriously stop charging these fees.

  10. I heard a rumour a while ago that the main reason why there isn’t a marketplace in AU is that Microsoft aren’t wanting to pay AU corporate tax. Could be wrong but all signs are pointing to it!

    Offshore processing of payments, delay of Zune Music subscriptions.

  11. this whole thing just leaves a foul taste in your mouth. I’m against the iPhone for a variety of reasons – but, I’d say this is enough to put off a lot of people!

    Funny there’s no mention of this on SMH yet?!

  12. Another question with this…

    Will I get slugged with the Internation transaction fee EACH time I buy an app? Or if I buy several apps in one session will I just get charged once?

    Anyone know?

  13. can australian users buy music from zune marketplace?
    canada still cant and i really dont know why. zune has been in canada since 08.
    any reason why?

    1. our copyright laws make it hard for any legit online music service to operate licencing-wise were lucky we even got zune video marketplace or netflicks(which doesnt have same selction as US ver.)

      1. just to add aswell our xbl service only has the music videos part of the music service for xbl.

        wonder if Rhapsody or some other service(maybe napster?) will come onto wp7 & be released into cdn area?

  14. On the subject of Australians being ripped off for Microsoft transactions…

    I got an email about renewing my Technet subscription the other day, and looking at the prices, even though the Australian and US Dollars are pretty much equal at the moment, the renewal fee here is 75% more than the same subscription in the US.

  15. I’ve been using Windows Phone 7 since launch day in Australia and I haven’t been charged any international fees at all. The charges just show up as normal on my statement. Hexic was $4 inc GST and the only change on my card from that day was $4. My credit card is a Visa with Citibank. It may be per bank, perhaps why it wasn’t addressed prior to now.

  16. Mine doesn’t have the extra charge

    08/11/2010 MICROSOFT *BILLING BILL.MS.NET $7.30

    it’s missing the SG yours has on the end, I’m on VISA with commonwealth…

  17. I ended up buying some apps and I WASN’T charged the international transaction fee. I purchased through the phone, with details entered in Zune previously, with a ANZ Visa Qantas Frequent Flyer card.

    Icy

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