Multi-currency wallet, cashback or miles? How to choose the best way to pay overseas

Travellers may also want to check what kind of cashback is offered, which can vary depending on the destination, the card and whatever ongoing campaigns there may be – keeping in mind that these time-bound promotions are temporary.

The DBS UnionPay Platinum Debit Card offers up to 5 per cent cashback in China, while UOB FX+ Debit cardholders can get 1 per cent cashback on mobile contactless spend in Malaysia, Thailand, Indonesia and Vietnam from Sep 1 to the end of the year.

Trust Bank and MariBank also offer cashback on overseas spend.

Those who want to get rewards in the form of miles would choose cards from the banks, such as the UOB PRVI Miles Card, the DBS Altitude Card or the OCBC 90°N card.

These cards offer accelerated miles for every foreign dollar spent, though cardholders must factor in the banks’ foreign transaction fees, which can eat into the overall value of the rewards.

THE BEST FIT

Depending on the destination, some payment methods might be more suitable than others. 

Places like Japan and Taiwan still rely on cash, while QR code payments are used heavily in China and Southeast Asia.

The three local banks offer scan-to-pay features on their apps, while other options may need to be combined with WeChat or Alipay to be used in China.

UOB said the number of scan-to-pay and peer-to-peer payment functions in foreign countries has grown strongly.

“This reflects customers’ preferences for a free, convenient and safer alternative to carrying large sums of cash in a foreign country,” said Ms Jacquelyn Tan, head of group personal financial services at the bank.

The type of transaction also matters, with MariBank’s head of consumer business Huo Haiyan recommending credit cards for retail and hotels. 

“Credit cards offer consumers additional protections that they may not get with a payment wallet, such as the ability to raise chargebacks for any potential fraudulent merchant transactions,” she said.

For travellers who need to withdraw money overseas, fees may apply depending on what card or app they use.

Using a credit card would incur cash advance fees, and administrative fees may also be charged for debit cards.

Revolut, Wise and YouTrip offer fee-free ATM withdrawals of between S$100 (US$79) to S$400 per month, though the operator may impose its own fee. 

Consumers should also consider their preference when it comes to debit versus credit cards. 

For debit cards, their account needs to be topped up, but they are able to lock in exchange rates by purchasing the foreign currency ahead of time.

For credit cards, consumers do not need to transfer money into a multi-currency account, but will be at the mercy of fluctuating exchange rates.