Axis Bank, Kotak Mahindra Bank Raise Overseas Card Transaction Fees

Customers of Axis Bank and Kotak Mahindra Bank will soon face higher charges for their international card transactions. Both banks have announced increases in fees for credit and debit card usage overseas, impacting Indian retail customers who travel abroad or make international online purchases.

Axis Bank is set to significantly raise its Dynamic Currency Conversion (DCC) fee on credit cards. From August 28, 2026, this fee will jump to 3.5% from the current 1.5%. This change applies to transactions where a customer opts to pay in Indian Rupees (INR) for purchases made outside India or on foreign websites, and the merchant processes the currency conversion at the point of sale.

Similarly, Kotak Mahindra Bank has announced an increase in its debit card transaction fees for overseas usage. Effective August 1 this year, the fee will be revised upwards to 3.5% plus Goods and Services Tax (GST), significantly higher than the existing rate of 1% plus GST. This adjustment will affect all debit card users making payments internationally, whether for online subscriptions or physical purchases abroad.

Understanding the Impact on Your Wallet

These fee hikes mean that international spending will become more expensive for customers of both banks. Dynamic Currency Conversion (DCC) is often offered by merchants abroad, allowing you to see the transaction cost in INR immediately. However, the exchange rate provided by the merchant, coupled with your bank's DCC fee, can often result in a higher overall cost compared to letting your bank convert the local currency transaction.

For Axis Bank credit card holders, choosing to pay in INR when overseas or on international e-commerce platforms will incur a substantially higher fee starting in 2026. Kotak Mahindra Bank debit card users, on the other hand, will experience an immediate increase in costs for any international purchase from August 1, 2024.

Tips for International Payments

• Be Mindful of DCC: When presented with the option to pay in local currency or INR for an international transaction, consider opting for the local currency. This typically allows your bank to perform the conversion, often at a more favourable rate, though your bank's standard foreign transaction markup (separate from DCC fees) will still apply.
• Review Bank Statements: Regularly check your bank and credit card statements for international transaction charges to understand the full cost incurred.
• Explore Alternatives: For frequent international travellers or online shoppers, it may be beneficial to explore alternative payment solutions such as multi-currency forex cards, travel-specific credit cards with lower foreign exchange markups, or digital payment platforms that offer competitive rates.

Customers are advised to review the updated terms and conditions issued by Axis Bank and Kotak Mahindra Bank on their respective websites and plan their international financial transactions accordingly to manage these increased costs.

This report is for informational purposes only and does not constitute financial advice.