Understanding Cross-border Charges at Miden

Overview

At Miden, all cards issued to our customers are US-issued USD cards. This is important because cross-border charges are determined by the relationship between the issuing country (United States), the merchant's acquiring country, and the transaction currency.

Understanding how cross-border charges work helps businesses accurately forecast transaction costs, structure pricing, protect margins, and plan their settlement and card usage strategy effectively.

What Are Cross-Border Charges?

Cross-border charges are fees applied to transactions that are processed outside the normal domestic processing flow of a Miden-issued USD card.

A transaction is considered cross-border when:

• A Miden-issued USD card (US issuing country) is used to pay a merchant whose acquiring bank is located outside the United States.
• A merchant located in the US settles transactions in a currency other than USD.
• A merchant located outside the US settles transactions in a currency other than USD.
• A merchant charges your Miden card in any currency other than USD.

The transaction is still considered cross-border if the merchant's acquiring bank is not in the United States, even when the customer is charged in USD.

In simple terms:
If your Miden USD card is used at a merchant processed outside the United States, or the transaction is processed in a currency other than USD, the transaction is considered cross-border.

Cross-border is determined by:

• The issuing country (United States)
• The merchant's acquiring country
• The transaction currency

It is not determined by:

• Your physical location
• Your nationality
• Where you are making the payment from

What Are Cross-Border Fees?

When a transaction qualifies as cross-border, Miden applies a cross-border fee.

Unlike many providers that charge only a percentage, Miden's cross-border fee consists of:

• A fixed (constant) fee
• A percentage of the transaction value

The exact amounts are outlined in Miden's commercial terms and pricing schedule.

These fees cover:

• International network processing costs
• Cross-jurisdiction settlement
• Increased compliance and fraud monitoring requirements
• Additional card network charges applied to international transactions.

Why Cross-Border Charges Are Higher

Cross-border transactions attract higher charges for several reasons:

1. Increased fraud and compliance risk

Banks apply stricter fraud monitoring and compliance checks on international transactions.

2. Currency conversion

When transactions require settlement in a currency other than USD, currency conversion is required. Conversion rates may fluctuate based on market conditions, affecting the final amount charged.

3. Additional network handling

Payment networks perform additional validation and routing for international transactions.

4. Regulatory differences

Different regions have different interchange regulations, resulting in varying cross-border costs.

How Cross-Border Charges Are Applied

Cross-border charges are applied when the transaction is settled, not when the transaction is initially authorized.

If there are insufficient funds on the card when the cross-border charge is due:

• The charge remains pending.
• The merchant or business may retry the charge within the same calendar month.
• If the charge remains unpaid by the end of the month, the outstanding amount is charged to the business as part of its monthly settlement process.

Example

You use your Miden-issued USD card to pay a merchant whose acquiring bank is in the United Kingdom.

Even if:

• The transaction is charged in USD.
• You are located in Nigeria, the United States, or anywhere else.

Because the issuing country is the United States and the merchant's acquiring country is the United Kingdom, the transaction is classified as cross-border and the applicable cross-border fee applies.

Impact on Businesses Using Miden

Cross-border charges can affect businesses in several ways:

1. Higher processing and settlement costs

Cross-border fees increase the overall cost of processing international transactions and may affect merchant margins.

2. Pricing and fee strategy

Businesses can incorporate cross-border costs into their pricing models, either by passing the cost through transparently or applying a markup where appropriate.

3. Reconciliation complexity

Foreign exchange fluctuations and multiple fee components require accurate reconciliation and reporting.

4. Product and market strategy

Businesses may adjust:

• Customer fees
• Supported payment methods
• Cross-border acceptance rules.

Impact on Customers

Customers may experience:

• Cross-border charges
• Foreign transaction fees
• Currency conversion charges
• Slightly higher total purchase amounts
• Occasional declines due to fraud controls on international spending.

What This Means for You

Understanding cross-border charges helps you:

• Accurately forecast transaction costs.
• Structure pricing for customers.
• Protect your margins.
• Plan your settlement and card usage strategy.
• Decide whether to pass through or mark up Miden's cross-border costs within your pricing model.

As a Miden customer operating globally, understanding how merchant location, acquiring bank location, and transaction currency affect cross-border charges helps ensure there are no surprises and gives you greater control over how you manage those costs.