Using Indonesian debit card abroad

jstar

Mr. 10,000
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Since the elections had not take place yet, and the € had dropped quite a bit, 'she who is in control' instructed me -after some testing at ATM machines in my home country which gave very positive rates- to take quite some euro in cash directly from the Indonesian rupiah accounts, using a debit card. Monkey see, monkey do.

So perhaps a bit overconfident, yours truly though it would be a good idea to use the card also to fill up the empty gas tank of the car with a 70 liter capacity at a liter price of more than €1,45.

A day later I asked her what the amount was that was subtracted from the account. And it was .......... over 4,8 Juta !!??? Which is almost three times the euro amount with the average rate. Of course something had to be wrong with rates or costs; or was it?

She called the Indonesian bank. They stated they had nothing to do with it, and said I would have swiped my card three times. I yelled to her over the phone: "Idiots! Do they even know how a payment terminal looks like? There is no swiping whatsoever!" And no terminal at gas stations ever had this problem, unless visited by Rumanian DIY-ers. So I decided to call the helpline of Maestro / MasterCard in Europe, to ask their opinion. Obviously they wouldn't/couldn't assist me since it seems to be continent specific, but they advised me to contact the merchant (Shell) first. They had never heard of this before.

When I called the customer service of Shell, I was interrupted even before I fully explained. "Ah yes, it's the bank. For safety reasons they allocate a larger amount with foreign cards and that will be refunded later." ? Wouldn't it be the merchant though who takes a larger 'deposit' to make sure the amount was fully covered? For currency fluctuations or stolen cards? "No no, it's the bank! It can take days or sometimes even weeks but you will get the money back."

Indeed, three days later the surplus was refunded. Still, a weird story.


images
 
I guess to make sure of currency fluctuations on a larger scale but yes very weird
 
To add a little more information, to draw money from ATM in Australia (in AUD) from my AUD account at Commonweath Bank Indonesia,via their debit card, costs a flat fee of about 1 dollar a withdrawal.
 
Actually this is completely normal; whenever I fill up with my domestic bank card (which is actually a Visa in disguise) it allocates (authorizes) +/- 150 euros on the card, then you fill up, and by way of much voodoo magic they refund the bit you didn't use.

If you do that with a foreign (read: non-EU usually) card, the amount is usually doubled, and if your bank card happens to be a Cirrus, Maestro, V-Pay or some similar type debit card, the authorization actually disappears from your account instantly. The mechanism of refunding is the same, but also, for non credit cards, can take a while to show.

The whole thing is due to how an actual credit card transaction is done; first there's an authorization which can be put in place for a certain time, this doesn't actually debit any funds, but locks them as a reservation. Gas pumps will then let you pump gas, and when the gas is fully pumped, they will modify that first authorization, then run a charge against that. At the end of the day, the charge is then "settled" and actually debited. Authorizations themselves expire after (IIRC) 7 days if no charges are applied against them, and can also be released by the vendor. They do, however, take a bit of time to fully "disappear" from the system.

The fun starts when you're using a debit card, any authorizations are in fact directly debited, and only when the charge made against an authorization is settled (or the authorization is released) do you get a refund for the difference. Mostly because an authorization is used as a "can you afford X" type deal, and on a debit card the only way to find that out is to actually debit the amount.

(Source: I used to be balls deep in credit card transaction software)
 
So that would mean this only occurs when (to put it simplistically) one creates an open tab? That explains one would notice it rather seldom (with getting gasoline at an automated system as one of the more obvious examples).
 
So that would mean this only occurs when (to put it simplistically) one creates an open tab? That explains one would notice it rather seldom (with getting gasoline at an automated system as one of the more obvious examples).

Pretty much, yeah, it is like opening a tab. It's just that on a credit card it's all magicked behind the scenes and you really don't notice it, debit cards using the visa/mastercard infrastructure are a complete hack on that system so you will notice the whole thing happening - unfortunately, it directly affects your balance - and in the case of using an IDR backed account, you may actually get shafted on the conversion fee or currency fluctuations if it times just right (e.g. your rate is 1:10.000 on charge but only 1:9000 on refund).
 
I try to never use Indonesian debit or credit cards outside the country. FOREX fees and problems if you have to dispute the charges are the biggest reasons.

Even within Indonesia, I usually use my US cards. With no FOREX fees, and up to 4% cashback on purchases, please easy transaction disputes, it’s a no-brainer.
 
Honestly I trust to use the cards abroad more than over here. Esp. the non mandatory PIN works on my nerves. For credit cards that is, not talking about NFC on the debit card (i.e. keeping it close to the payment terminal). Although I did get an 'automatic approval' of a substantial amount lately on a RI MasterCard in a restaurant in Europe; no signature, no PIN, nothing.

Afterthought: With these e-wallet systems and the deal they offer, the whole debit and credit cards will probably be a thing of the past anyway. They just can't compete with the Go-Pay's and OVO's here. Now abroad it's a bit of a different story; there have been many trials and failures as Tap & Go and many other NFC mobile wallets. There needs to be some shaking of the tree.
 

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