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How are exchange fees applied at PaySika?

Are you a keen foreign traveller?
Although online payments have revolutionised the way we shop, it's important to understand how foreign currency transactions work, especially when it comes to exchange fees.
If you are planning to travel or make online payments with the PaySika bank card in a country outside your local area, this article is for you.
We will explain everything you need to know about exchange fees to avoid unpleasant surprises.

What are exchange fees?

Exchange fees, also known as foreign exchange commissions or currency conversion fees, are additional costs charged by your bank or card issuer when you make a payment in a currency other than the currency of your account.
These fees cover the cost of converting the foreign currency into your local currency.

Why do foreign exchange charges apply?

Foreign exchange charges apply for several reasons:

Currency Conversion: Your bank or card issuer must convert the foreign currency into your local currency.

Currency Risk : Fluctuating exchange rates between different currencies can present a financial risk for financial institutions.

Banking services : Fees also cover the costs of banking services, including the processing of international transactions.

How exchange fees are calculated

Exchange fees can vary depending on a number of factors:

Exchange Rate: The exchange rate is the rate at which one currency can be exchanged for another. Banks often apply a margin on the market exchange rate.

Bank commission : A fixed commission or percentage of the transaction amount may be added to the exchange rate.

Card type: Charges may differ depending on the type of card you use (Visa, Mastercard, etc.) and the card issuer.


NB: Exchange fees at PaySika only concern users with USD cards. This is for the moment because it has been applied by our partner.

The exchange fees are 3% of the transaction amount in USD + 0,5$.

As an example:
You want to buy an item online for NGN 30,000 using your USD card. Assuming you are charged 1 NGN = 0.00066 USD. So the amount of your transaction is 0.00066 * 30 000 = 19, 8 USD
This is how your exchange fee will be calculated:
19.8 USD * 3% = 0.597+ 0.5 USD = 1.094 USD
The total amount debited from your PaySika account will be: Transaction amount + Transaction fees + Exchange fees.

Updated on: 31/05/2024

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