In fact, this is not a common practice. Most services or wallets will send the provided amount to the recipient as it is and will deduct the fees from what's left on your account's balance.
Deducting the fees from the sent amount makes it hard for the customer to calculate how much he needs to withdraw.
If I need to pay a merchant $10 then I should type $10 and the exchange can deduct whatever they want from the remaining balance.
@OP, what's the merchant's policy when they don't receive the full amount?