Over the past few days discussions blew up on social media suggesting that Bilt Rewards credit cards were adding a 0.2% foreign transaction fee, despite the cards being advertised as not having one. Here’s one example.
- There’s often confusion with no foreign transaction fee cards, where there’s a ‘hidden cost’ in that the consumer is getting a markup versus the interbank rate.
- And a bunch of customers were comparing what they were charged to the Mastercard site where the payment network has a calculator for the exchange. However that’s not a slam dunk because of timing issues, and because Mastercard itself says its converter is only indicative and that banks may not use that same rate. A mismatch there is actually normal!
- However what was not normal were some reports that the same foreign transaction showing one amount in US dollars in the Bilt app appeared 0.2% higher amount on the card statement. That looked like an add-on post-conversion.
I’m headed out of the country myself and planned to test this. And I didn’t cover this yesterday because it seemed like I was close to having information to share. And now I do.
- This was not intended (‘a feature, not a bug’) as some had surmised
- Anyone charged extra will see that money back.
According to a Bilt spokesperson, any overcharges – fees or add-ons that hadn’t applied to foreign transactions on their earlier Wells Fargo cobrand – will be refunded.
We are aware of the questions surrounding final transaction amounts for foreign transactions and are actively reviewing this matter with our card partners that manage the program. There should be no change to foreign transaction fees vs. the 1.0 card, and if any fees have been added, we will ensure our partners refund them. We will communicate when we have more information.
0.2% probably wouldn’t move the needle on my choice of cards. It’s $6 on $3,000 in charges. But it’s not what was promised so I’m glad to see a commitment not just to rectify going forward but to refund as well.
…only because there was backlash.
Their operations are sketch AF
Thanks Gary for following up with this!
@Matthew — And, supposedly, instead of investing in an actual customer service department, they’re doubling-down on performative nonsense, like this Neighborhood Concierge AI stuff, and a $30 million acquisition of Sion, a travel concierge AI. Priorities, folks… heh, at least Ankur’s wife-y is gonna be a on Real Housewives…
Sure it’s $6 on $3000 but why would I want to buy Bilt/cardless/ankur a cappuccino at Starbucks!
Bilt 2.0 has been one of the worst product roll outs of all time. I’ve never seen a company fail so spectularly.
@RC — It really has felt like Mr. Toad’s Wild Ride…
@1990
So, finally the backlash has started coming. Writing from Christchurch, I can only repeat what I said before, Merchants are universally tackling on 1-2% surcharges on all transactions. Same in AKL and WEL. As well as in Europe. I have merchants here why? And they said tired of high merchant fees.
Get used to it.
This is more likely just a lack of understanding on the card processor BILT is using (Cardless). Within the Mastercard settlement files, there are three pertinent data element to this topic.
DE005 Recon amount (amount the issuer owes Mastercard)
DE006 Cardholder billing amount (amount intended to be passed to the cardholder’s account)
CC111 Currency Conversion Assessment (CCA) (fee Mastercard collection from issuers via settlement)
DE006 + DE111 = DE005
End of the day, the issuer owes DE005 to Mastercard. Typically banks route DE006 to the cardholder’s account; DE111 is moved to an internal expense account/GL so the full amount owed can be remitted to MasterCard.
In this case it seems Cardless is passing DE006 to the cardholder’s account, thus embedding the 0.20% CCA that Mastercard collection via the settlement process.
As someone who created a Payfac (Payment Facilitator, where as a business I signed up my 10k+ customers to process credit cards and ACH) these types of hidden fees happen all of the time. We didn’t catch one where the insurer was charging an extra $50+ for non-value “PCI-Insurance” which is always just a BS fee. It was a large amount, hundreds of thousands, and worse, customers left us because of it. They did make us whole, but the problem lies in the fact that CC companies are always Ready, Fire, Aim.