When booking a domestic flight or hotel using a South African credit card, neither travel agents nor their clients would expect to incur a cross-border transaction fee. Yet, the way some travel suppliers process payments can mean a seemingly local transaction attracts international charges.
The issue was recently brought to light by Melanie Tucker of Mel Tucker Travel, who shared her experience on Travelinfo’s OpenJaw after noticing unexpected cross-border fees on a domestic BSP airfare booking.
“If we make a reservation in our local GDS and we issue those tickets on a South African credit card, not on an overseas card, there should be no cross-border fees,” Tucker told Travel News.
“If the airline seems to have a local merchant account, there is no way to know we will be charged cross-border fees and we can’t tell our clients. If our clients then get charged, they get upset with the agent because it was not part of the quote, and then agencies may end up having to cover those hidden costs.”
The explanation lies in the way some airlines and hotels process card payments behind the scenes.
“Many airlines and hotels in South Africa use international acquirers,” Paulina Klotzbücher, CEO of Glyde Pay, told Travel News. “An international acquirer will acquire payments from all over the world but then settle the transaction into a local bank account.
“These ‘global’ transactions are not subject to Balance of Payments card reporting and are not seen as international transactions by the South African Reserve Bank (SARB). However, the schemes do see them as international and charge international rates accordingly.
“What you end up with is a domestic transaction charged at international transaction rates. These fees are subsequently recovered from the cardholder.”
Is it legal?
While the use of an international acquirer is not illegal in South Africa, SARB recently flagged the practice as a concern, particularly because of the additional costs imposed on consumers.
In its Directive for conduct within the national payment system in respect of issuing and acquiring payments for goods and services provided by offshore merchants 2026, SARB identifies the practice as a form of ‘misclassification’.
SARB noted that common examples of this included payments for domestic e-hailing services or accommodation.
“Misclassifying and processing domestic payments as cross-border transactions presents material challenges for the National Payment System (NPS). It can undermine the SARB’s efforts to safeguard and preserve domestic payment processing capabilities, restrict effective regulatory oversight of retail payments within SA, and impose undue costs on customers by charging international transaction fees for domestic goods and services.”
According to the directive, SARB may in the future require cross-border payment facilitators to obtain authorisation as domestic acquirers if their transaction volumes or market concentration pose risks to the stability and efficiency of the NPS.
Why cross-border fees are difficult to predict
For travel agents, identifying which airlines or suppliers use international acquirers isn't straightforward.
“Very often the airlines may not acquire all their volumes via an international acquirer. Sometimes they only process NDC, GDS, ancillaries, upgrades or transactions above a certain amount via the international acquirer. It is also difficult to find out if they settle the money into a South African merchant account,” said Klotzbücher.
She highlighted two of the most popular international acquiring banks for airlines, World Pay and Nuvei. These companies house airline clients including Qantas, Turkish Airlines, RwandAir and even SAA. However, she emphasised that they may not use these international acquirers to process South African payments.
“Airlines often do this to improve their automations and centralise their transaction processes, but because they are acquiring overseas, the downstream impact is higher cardholder fees,” she said. “The very high fees are unfortunate, but this impact is not intentional.”
