International purchases and the sweet kick on the butt
Imagine that you are following an artist on Instagram.
They do fantastic work, and you plan to learn from them. You visit the artist's profile and find a probable link to the course he authored.
When you clicked on that link, it took you to the course's landing page. The price of the course is on the higher side. The artist is from the USA, and they are charging a small amount as per their standards.
But sitting in India, it's not a tiny amount.
For the same price, you could get almost all OTT subscriptions available in India for a whole month, yet you purchased their course.
It asked for a credit card. You enter the card details and OTP. You get a notification saying X $ are deducted from your card. You weren't expecting the charge to be in dollars since the price shown on the website was in rupees. You finally feel good that you made your first international purchase.
After a few days, your credit card statement is generated, with an additional charges section you haven't seen before. A quick Google search reveals that it's incurred when making an international purchase. You call up the card's customer service agent to request if the additional charge can be waived off since it's your first time, but the agent says it's common sense and gives you some unexpected Gyan(knowledge)
That's when you realise that you got cheated. But who cheated you is not clear. But you know it was your sole mistake.
With this experience, you are very careful about your purchases on new websites, even if artists endorse them. Making a single transaction itself is a pain now. So you avoid subscriptions to avoid recurring transactions.
You see my point, right?
This story is essentially an incident from my life.
I plan to purchase courses online and support my favourite artists on Patreon and GitHub. But to my disappointment, things are not that easy.
Why is it costly to make international transactions
It's because for two reasons
- Purchasing Power Parity and
- Foreign Exchange charges.
I'll not go too deep into Purchasing Power Parity, but here's a small example.
Water (0.33-litre bottle) costs 14.52 rupees in India. But the same thing costs 128.73 rupees in the USA, and that's nearly ten times more than what we spend in India.
Most artists in the USA provide their courses keeping their standards in mind, creating an unnecessary burden on customers in other countries.
Finally, coming to the forex markup charges, it's nearly 3% of your actual amount. Though it looks small, the forex markup costs pile up if you make multiple purchases or have an active subscription payment.
Suggestions to Artists
If there are any suggestions I can give to the artists who offer these courses, they would be:
- Think about purchasing power parity. Charge your user based on the country, not by your standards.
- Educate your users about forex markup costs. Many students will be on a tight budget. Understand what they have to go through because of unexpected foreign exchange charges.
I have written this article considering that the user is from India, but the suggestions I proposed in this article can also apply to other countries.