It's fairly common to hear people mixing up concepts when talking about international and foreign exchange (FX) payments. However, the difference between them is quite simple:
International payments are transactions made to foreign merchants, irrespective of the currency used.
FX payments are transactions made using foreign currencies, irrespective of the country of the merchants used.
See below for more details on how Alaan handles international payments.
Availability
This is an easy one: Yes, Alaan cards are corporate Visa cards, which means you can use your Alaan card with any merchant that accepts VISA cards. This applies to pretty much every country, except those where international sanctions are in force, e.g. (Iran, Syria, or Russia).
Currency
In line with the previous point, you can use Alaan cards to pay in any foreign currency accepted by Visa.
When you make a payment to a foreign merchant, even in your local currency (eg. AED in UAE or SAR in KSA), Visa must convert the funds to a foreign currency, which incurs conversion costs.
It's important to note that foreign merchants may take advantage of this by adding a conversion charge of 4-12% when you pay in AED. Fortunately, you can avoid this extra charge by paying in the merchant’s local currency (e.g., USD in the US).
Fees
Every transaction processed through Alaan outside the country where the card was issued incurs a fee by VISA. This fee is applicable irrespective of the currency used to make the payment.
This fee reflects the intricate process of transferring funds internationally, where VISA serves as the intermediary, seamlessly facilitating the movement of money from your local bank account to the merchant's account in a foreign country.
🇸🇦 KSA
As per ZATCA's regulations, VAT must be applied to international transaction fees.