Axis Bank and Kotak Mahindra Bank are set to make overseas card transactions costlier by sharply increasing Dynamic Currency Conversion (DCC) charges on select credit and debit cards. The revised fee structure will come into effect in August and aligns DCC charges more closely with the foreign currency markup typically imposed on international card transactions.
Dynamic Currency Conversion (DCC) is an option offered to customers making purchases abroad. Instead of paying in the local currency of the country where the transaction takes place, cardholders can choose to pay in Indian rupees. In such cases, the overseas merchant or its payment processor converts the transaction into rupees rather than the issuing bank.
While paying in rupees may appear convenient, DCC often involves additional costs because the exchange rate is determined by the merchant or payment processor. Banks may also levy a separate DCC fee, along with applicable Goods and Services Tax (GST), making the transaction more expensive than paying in the local currency.
Axis Bank And Kotak Mahindra Bank Revise DCC Fees
According to Axis Bank’s updated terms and conditions, the DCC fee on several credit cards will increase from 1.5 per cent to 3.5 per cent, effective August 28, 2026.
The revised 3.5 per cent DCC charge will apply to MyZone, Select, Privilege and Neo credit cards. Premium products will see comparatively lower revisions, with Magnus and Magnus for Burgundy cards attracting a 2 per cent DCC fee instead of 1.5 per cent, while Olympus cardholders will be charged 1.8 per cent.
Kotak Mahindra Bank has also revised its pricing. Beginning August 1, 2026, the lender will increase the DCC fee on debit card transactions from 1 per cent plus GST to 3.5 per cent plus GST.
The move follows a similar revision by ICICI Bank, which increased the DCC charge on all its debit cards to 3.5 per cent plus GST from 1 per cent on June 21.
It is important to note that DCC charges are separate from foreign currency markups. Under DCC, the exchange rate is generally determined by the merchant or its payment processor, and the issuing bank’s DCC fee, along with GST, may be added on top of that conversion rate. As a result, customers should carefully compare payment options before choosing to pay in Indian rupees during overseas transactions.
