Westpac levies tax on non-domestic online purchases

Westpac charges 3% for such purchases made on Visa and MasterCard, and 3.5% on American Express transactions.

Westpac notified customers of the new charge on the final page of bank statements sent out in February 2014. The charge, which came into effect on March 20, covers purchases where the consumer is quoted a price in AUD but the merchant receives payment in foreign currency.

The Australian Competition and Consumer Commission said the practice did not appear to be drip pricing, where fees and charges are progressively revealed by a merchant as a would-be buyer travels through the purchase process.

A Westpac spokesperson, cited by smh.com.au, has said the fee is set as a norm in the industry in order to cover the costs of processing foreign transactions and charges passed on by credit card schemes.