Aussies being overcharged on WP7 app purchases

Australian Windows Phone 7 users are being slugged transaction fees for every app they purchase, according to avid Microsoft blogger Long Zheng.

Writing on istartedsomething, Mr Zheng claimed the international transaction fees are adding around AU$1 to every app purchase, with the user not aware of the extra charge unless they check their credit card bill. The issue appears to lie with Microsoft processing app purchases via Microsoft’s Asia Pacific head office in Singapore, making every purchase an international transaction.

By comparison, apps on the Android Market are converted to local currencies by Google, with the exchange rate determined by the user's credit card provider. iDevice users pay a premium of about AU$0.20 on a US$0.99 app, with the extra cost rising to around AU$1 on a US$2.99 app. With the Australian dollar hovering around parity with the greenback, and around 7 billion total downloads from the App Store as of October 20 this year, even those small extra costs represent a large windfall for Apple.

Mr Zheng has reached out to Microsoft for comment, but in the meantime Aussie WP7 users are advised to use carrier billing rather than paying via credit card. The fee issue comes a month after an Australian Windows Phone 7 launch plagued by stock shortages.

It isn't the first time Microsoft has drawn fire for billing issues - in August, Neowin reported that Australian Xbox Live users were paying nearly 20% more for Microsoft Points, the currency powering purchases on the online gaming service, than US users.

Image Credit: istartedsomething

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29 Comments

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well considering MS already have an presence in the country via Microsoft.com.au shouldn't payments be processed by them and not in Singapore thereby negating any international fees

don't worry me OZ neighbors we in NZ probably suffer the same problem actually we do HP.nz pulls the same stunt with it's laptop win7 upgrades by forcing you to get them via singapore and charging US dollars for the PnP for what should be an $10nzd pnp winds up being $37nzd

zkid2010 said,
Poor Aussies. Be nice to them, they're like some of the coolest people on the planet. Thanks.

Why thank you zkid2010

This fee is charged on top of purchases, and users aren't being told about it pre-purchase - thus it's wrong. If it's the banks, Microsoft is still at fault and needs to sort it out ASAP.

On that point, I'd rather be charged in USD rather than an inflated old exchange rate. Our mining industry has worked hard to rape the land in order to build up our economy and help reduce the prices of technology goods and services,

This fee is charged on top of purchases, and users aren't being told about it pre-purchase - thus it's wrong. If it's the banks, Microsoft is still at fault and needs to sort it out ASAP.
Since when was its Microsoft's responsibility to inform you of your bank fees? MS doesn't set the fee and nor do they know if it's going to be charged (it will completely vary depending on which card you have, and which bank you use..some will have high fees...some will have no fees).

They don't inform you that you might incur overdraft fees if your balance goes below zero, why don't we see an article on that too?

/- Razorfold said,

They don't inform you that you might incur overdraft fees if your balance goes below zero, why don't we see an article on that too?

Because that has nothing at all to do with Microsoft, this does. Microsoft is the one that launched a product in a country without having the infrastructure set up to bill locally. While they're not legally required to inform you that you're going to end up with international billing charges if they want happy customers they should definitely start doing so. Even better would be to just set up billing properly so they aren't charged in the first place, with smart phone app prices being as low as they are a $1 surcharge is pretty substantial compared to the price of what they are trying to buy.

Kitty Karloso said,

Because that has nothing at all to do with Microsoft, this does. Microsoft is the one that launched a product in a country without having the infrastructure set up to bill locally. While they're not legally required to inform you that you're going to end up with international billing charges if they want happy customers they should definitely start doing so. Even better would be to just set up billing properly so they aren't charged in the first place, with smart phone app prices being as low as they are a $1 surcharge is pretty substantial compared to the price of what they are trying to buy.

Does Steam have a disclosure on these fees, as according to some commenters, this is also charged on Steam purchases.

sviola said,

Does Steam have a disclosure on these fees, as according to some commenters, this is also charged on Steam purchases.


That is incorrect. If you buy from the aus steam store you don't get the transaction charge but you get the over-inflated prices . Where as , if you can buy from the US store you get the cheaper prices but you also get the bank charge. win-win i guess

This happens to me every time I make an android market purchase from some dude in Europe (frequently). Blame the banks...they make, well, bank off of us.

Yinchie said,
There should be a news post about Steam overcharging Europeans...

Aussies already get overcharged for steam as it is... SWFUII = 89 AU compared to the 39.99US yet we are still charged in USD for both of them..

It's also worth nothing that as they're transaction fees, Microsoft don't get any of the extra money themselves - so no, they're not doing it to steal your monies, in case someone undoubtedly suggests it.

Perhaps a worldwide currency merger is in order, now that international borders are crossed with the click of your mouse?

Wow - imagine that, go on, I dare ya

Tidus4eva said,
Perhaps a worldwide currency merger is in order, now that international borders are crossed with the click of your mouse?

Wow - imagine that, go on, I dare ya

But if that happens then.. *insert every conspiracy theory here*!

And we don't want that now

Tidus4eva said,
Perhaps a worldwide currency merger is in order, now that international borders are crossed with the click of your mouse?

Wow - imagine that, go on, I dare ya

paypal?

Tidus4eva said,
Perhaps a worldwide currency merger is in order, now that international borders are crossed with the click of your mouse?

Wow - imagine that, go on, I dare ya

That would be unlikely. Too many economical implications that would probably end on a war.

Um blame the banks and credit card companies for coming up with ridiculous fees? What do you want Microsoft to do? Open a bank account and division in every single country of the world?

Oh and look, the istartedsomething article even mentions that:

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.

And it's not like Microsoft / Apple / Google get this money either, its a bank fee. The banks keep it.

/- Razorfold said,
Um blame the banks and credit card companies for coming up with ridiculous fees? What do you want Microsoft to do? Open a bank account and division in every single country of the world?

They already have offices in Australia. So yes, they should be charging Australians in Australian dollars. It's not a backwater, you know. There's 22 million here compared with around 5 million in Singapore.

Steeley said,

They already have offices in Australia. So yes, they should be charging Australians in Australian dollars. It's not a backwater, you know. There's 22 million here compared with around 5 million in Singapore.

They are charging Australians in Australian dollars, it's just the payments are processed in Singapore. Like I said, Microsoft isn't earning this "$1 fee per app"..the bank is. Go complain to them or get a better account / card.

But them for them to process payments in Australia, they would probably be taxed as a result. So now they have one of two options, either process the payments in another country and let the consumer decide whether or not he wants to take on the international fee (which is determined by which bank you use, and what benefits your card offers) or to increase the prices on the apps to cover for the tax. Yes in an ideal world there would be no taxes and everything would cost the same worldwide..but we don't live in an ideal world.

/- Razorfold said,
They are charging Australians in Australian dollars, it's just the payments are processed in Singapore. Like I said, Microsoft isn't earning this "$1 fee per app"..the bank is. Go complain to them or get a better account / card.

But them for them to process payments in Australia, they would probably be taxed as a result. So now they have one of two options, either process the payments in another country and let the consumer decide whether or not he wants to take on the international fee (which is determined by which bank you use, and what benefits your card offers) or to increase the prices on the apps to cover for the tax. Yes in an ideal world there would be no taxes and everything would cost the same worldwide..but we don't live in an ideal world.

Microsoft shouldn't be passing the buck onto their customers

Subject Delta said,

Microsoft shouldn't be passing the buck onto their customers

The day any business doesn't pass any costs to the customers pigs will fly.

Subject Delta said,

Microsoft shouldn't be passing the buck onto their customers

Why not..because they can afford not too? Well banks can afford to not charge you fees too, but they do so don't they?
I get so tired of so many crybaby when it comes to Microsoft. if all of you don't like MS why do you keep buying their products?