Axis and Kotak raise overseas card conversion charges, narrowing the gap with forex markups
Axis Bank will raise its dynamic currency conversion fee to 3.5% from 1.5% on August 28, while Kotak Mahindra Bank will charge 3.5% plus GST on debit-card DCC from August 1. The changes raise costs for overseas travel, international e-commerce and offshore digital subscriptions.
What happened
Axis Bank and Kotak Mahindra Bank are raising dynamic currency conversion fees on overseas card transactions, aligning charges closer to standard forex markups.
Key facts
- Axis Bank DCC fee: 3.5% from 1.5%, effective August 28, 2026
- Kotak Mahindra Bank debit-card DCC fee: 3.5% plus GST from 1% plus GST, effective August 1
- ICICI Bank debit-card DCC fee: 3.5% plus GST from 1%, effective June 21
- Magnus and Magnus for Burgundy DCC fee: 2% from 1.5%
- Olympus DCC fee: 1.8%
- Typical foreign-currency markup: around 3.5%
Why this matters
Payments and travel-commerce players have an opening to partner with fintechs or issuers offering transparent, lower-cost FX conversion to win customers dissatisfied with bank-led DCC pricing.
What to watch
- Customer complaints, social-media attention or RBI scrutiny of DCC disclosure and opt-in practices.
- Changes in overseas card transaction volumes, international e-commerce authorization rates and average ticket sizes after the August effective dates.
- Competitor responses from HDFC Bank, ICICI Bank, SBI Card, Amex and travel-card fintechs on forex markups, DCC charges and rewards.
- Growth in transactions where customers decline DCC and choose local-currency billing.
- Foreign-exchange volatility, which could make transparent pricing and lower-markup products more salient.
- Axis, Kotak and peers are likely to clarify whether the higher fee applies only when customers opt into DCC, while promoting local-currency payment as the lower-cost choice.
- Card issuers may revise international-spend reward structures, launch limited-time forex-markup waivers or push premium cards to retain affluent travelers.
- Travel platforms, airlines, hotels and global merchants may face more customer complaints and checkout abandonment where DCC is preselected or poorly disclosed.
- Fintech forex-card, neo-banking and cross-border payment providers may intensify campaigns around transparent exchange rates and lower all-in conversion costs.
- Banks may broaden fee increases to adjacent international transaction categories if customer attrition remains limited and interchange economics stay pressured.