If you use your debit or credit card while travelling abroad or shopping on international websites, this update is important.
Axis Bank and Kotak Mahindra Bank have increased their Dynamic Currency Conversion (DCC) charges, which means some foreign card transactions could now become more expensive.
Axis Bank Raises DCC Charges
Axis Bank has increased the DCC fee on many of its credit cards from 1.5% to 3.5%. The new charges will apply from August 28, 2026.
However, some premium cards will have lower charges:
Magnus and Magnus for Burgundy: 2% DCC fee
Olympus: 1.8% DCC fee
MyZone, Select, Privilege, and Neo: 3.5% DCC fee
Kotak Mahindra Bank Also Hikes Fees
Kotak Mahindra Bank has also raised DCC charges on its debit cards. The fee has gone up from 1% + GST to 3.5% + GST, and the new rates will be effective from August 1, 2026.
Earlier, ICICI Bank had increased DCC charges on all debit cards to 3.5% + GST in June 2026, showing that several major banks are now following a similar pricing structure.
What Is Dynamic Currency Conversion (DCC)?
When you make a payment outside India or on an international website, you are usually given two options:
Pay in the local currency (such as US Dollar, Euro, or Pound)
Pay in Indian Rupees (INR)
If you choose to pay in INR, it is called Dynamic Currency Conversion (DCC). In this case, the foreign merchant or payment processor converts the amount into rupees, and your bank may also charge a DCC fee for the transaction.
Why Are Banks Increasing These Charges?
According to experts, banks are raising DCC fees to earn more from international transactions and recover the costs of cross-border payment processing and card networks.
With more Indians travelling overseas, shopping from global websites, and paying for international digital services, foreign card transactions have increased significantly. Banks are now looking to benefit from this growing demand.
How to Save Money on International Payments
If you are paying with your card abroad, experts generally recommend choosing the local currency instead of INR whenever possible.
Choosing DCC can increase your total payment because it may include:
A higher exchange rate set by the foreign merchant or payment processor
An additional DCC fee charged by your bank
Before confirming any international payment, always check the currency option displayed on the payment screen. Selecting the right option can help you avoid unnecessary charges and save money.