BNPL Lifestyle

Book Now, Pay (More) Later: Why NOT To Use Agoda’s BNPL Service

If you’re planning to book your hotel with Agoda’s “Book Now, Pay Later” service, STOP!

Read this post first before deciding if it’s the best option for you.

Buy now, Pay later (BNPL) services have become increasingly common in recent times.

Many businesses offer such an option to customers either directly or via a 3rd party like Atome.

Recently, I used Agoda’s BNPL service for hotel bookings that I made on my recent vacation, and it left a bad taste in my mouth.

Today, I’ll talk about my experience with using this service and why I won’t recommend anyone to use it – at least, in the case of Agoda.

Why Use BNPL?

Just because this service is being offered doesn’t mean you have to or should use it – most of the time, you should be allowed to pay now if you wish.

Usually, I don’t use BNPL services unless there is some exclusive discount (Atome tends to offer them frequently).

But with Agoda’s own BNPL service, there was no such promotion – so why did I opt to use it?

Well, the reason was to maximise my credit card rewards.

I play the game of miles, and the only credit card I currently own that is worth using to earn miles is the HSBC Revolution card.

It earns 4 miles per dollar (mpd) on online travel expenses like flight and hotel bookings but is capped at a spending of S$1,000 per calendar month.

When I was looking to book my hotel, I had already paid for other expenses in the same month that exceeded S$1,000.

If I had gone ahead and paid for my hotel booking, I would’ve earned only 0.4 mpd instead of 4 mpd, which of course I didn’t want.

Seeing that Agoda offered the option to “Book Now, Pay Later”, I decided to go with that.

This allowed me to delay the payment of my hotel until the following month when I could earn 4 mpd on that payment, which was what I wanted.

BNPL seemed to be an option that made sense for my situation, so I decided to take advantage of it.

The Booking

After monitoring hotel prices for a few weeks, I finally found a good deal for one of the hotels I was eyeing on Agoda.

Not only was the price the lowest I’d ever seen across multiple platforms, but the booking also included free cancellation and allowed me to BNPL.

As I explained above, choosing BNPL allowed me to maximise the miles earned from the payment, so I was happy about that.

I looked around on the booking screen to see if there was any important information about using their BNPL service, but nothing seemed alarming.

Free cancellation until 1 day before my stay, the price in foreign currency will be charged to me in SGD on the payment date, etc. – everything seemed fine.

There was also a small link to their terms of use that could affect the price, but I brushed it off and ignored it.

Needless to say, that was a mistake, but more on that later.

I completed my booking and received the confirmation email.

Again, no details mentioned in the email seemed to raise concerns – it was largely similar to the booking page.

I was left feeling contented thinking that I had just managed to secure a good deal on my hotel booking while also earning miles efficiently – the best of both worlds!

The Payment

When it came time for the payment to be charged to my card, I checked my HSBC app just to see if it had already been charged.

I was shocked to find that my card had been charged, but at a higher price than I expected to pay.

For context, the amount I expected to pay for my booking was ~720,000 KRW, which was listed as 735 SGD at the time of booking.

However, the final price charged to my card came up to 775 SGD – a 40 SGD increase, or 5.4%.

Now, I was expecting there to be a slight variation in the final price charged since exchange rates vary every day.

But given that there was only 1 month between my booking and payment dates, and that SGD had appreciated against KRW in that time, I didn’t expect the price to vary much.

If anything, I was expecting the final price to be cheaper in SGD than the original booking price, not 5% more expensive.

I knew the price variation of > 5% was too high to be attributed to just the movement in relative currencies, so I contacted Agoda’s customer service seeking an explanation.

The Revelation

I used the Agoda Customer Service chat function in the mobile app to seek clarity on this issue.

Once I was connected to an agent, I presented my concern about being charged more than I expected for my BNPL booking.

The reply provided was that they used their “adjusted exchange rate” as described in their terms of use.

I had assumed that this was simply Agoda’s own exchange rate that is below the market rate so that they could profit off of arbitrage, similar to the exchange rate provided by banks.

But still, 5% was simply too much of a variation – for context, banks only charge a 0.75% premium on exchange rates.

After more questioning, the agent finally told me that they include a “small fee” in their “adjusted exchange rate”, as described in their terms of use.

That’s when it hit me.

I looked up their terms of use and found the answer to my concern.

Buried in section 8.1(d)(ii) of the document of fine print was the following:

(ii) Product Currency-Related. You may make a booking with Pay Later or an equivalent option selected (“Pay Later Booking”), in which case you would make such booking on a certain date (“Booking Date”) but would be charged for such booking on a later date (“Charge Date”). If your Charge Currency is different from the Product Currency for a Pay Later Booking, your Charge Price will be calculated from the Product Price using the Bloomberg Rate plus five percent (“Bloomberg +5%”) on the Charge Date, unless: (A) you are making your booking from an IP address located in the United Kingdom; (B) you are paying with a US-issuer payment card whose default currency is USD; or (C) you are paying with a US-issuer payment card and booking from an IP address located in the United States. If the conditions for applying both section (i) above and this section (ii) are otherwise met, only the price increase described in this section (ii) would be applied.  

Agoda’s Terms of Use

To supplement the terms used in the point above, here are the definitions:

(ii) “Charge Currency” means the currency in which you are charged for a booking, which you may have the option to change.

(iv) “Product Currency” means the currency in which the Travel Supplier provides its prices to Agoda, for its Travel Product listings. The Product Currency is the official currency in the territory where the relevant Travel Product is located or provided, unless the Travel Supplier or Agoda, as the case may be, requests otherwise.

(v) “Bloomberg Rate” means the applicable Bloomberg Generic Composite Rate mid-rate on the then-current day. Other relevant definitions are also incorporated into the clauses below.

Agoda’s Terms of Use

The main point here is that making a BNPL booking on Agoda almost always warrants a fee of 5%.

That’s because the product currency is likely to be the currency of your destination country, ie KRW in my case.

And the charge currency is likely to be the currency of the country where the credit card used for the booking is issued, ie SGD in most cases.

Then, the exchange rate that Agoda will use to process your payment is Bloomberg’s exchange rate + 5%.

So even though the final price is displayed to me as 735 SGD on Agoda’s platform, and my booking says that I will be charged an equivalent of 720,000 KRW, that really isn’t the case.

I was bound to pay the 5% fee because of the difference in currency between my hotel and my card.

Was It Worth It?

If I had known that I was going to pay a 5% fee, I probably wouldn’t have gone ahead with the BNPL option and would have instead chosen to pay immediately.

Earning 4 mpd in exchange for a 5% fee isn’t actually the worst value – it should be fairly easy to redeem miles at a value such that the rewards rate of 4 mpd is > 5%.

However, the alternative is that I could have used a general miles card to still earn some miles on my booking, albeit at a lower rate of 1.2 mpd.

That would have allowed me to earn miles and lock in the lower booking price.

This means that the difference in miles earning rate is now only 4 – 1.2 = 2.8 mpd, which cost me 5% in fees.

In order to make the miles worth it, each mile would need to be redeemed for a value of ~2 cents per mile, which can be hard to do.

In my opinion, paying the 5% fee in exchange for earning 4 mpd on the booking was not worth it.

The Lesson

After reading about the terms of use, I knew there was nothing more I could get from Agoda’s customer service.

To be honest, this was my fault for choosing not to read the terms of use before making my booking, even though Agoda did subtly hint that there might be ways that the booking price may be affected.

I didn’t think much of it at the time and assumed that there were no outright fees being charged since it wasn’t mentioned.

But of course, that isn’t how large corporations do business, and I should have known better to read the fine print as I usually pride myself on doing.

Still, I find the way that Agoda went about trying to bury the fact that they do charge a fee for their BNPL service really shady.

I know I’m not the first victim of this as I’ve read similar rant posts on other forums, and there are definitely many others who might not even have known that they paid this 5% fee to Agoda.

It’s perfectly fine to want to charge a fee for additional services, but I hate it when companies aren’t upfront about them.

It comes across as very sneaky and makes me not want to continue using their services in future.

Regardless, the moral of the story is to always read the fine print before using a company’s services if you don’t want to be surprised by additional fees.

If you’re planning to book your hotels on Agoda, hopefully, this post was helpful for you.

Feel free to share this post with others who you think might benefit from this post and spread awareness!

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