Axis Bank and Kotak Mahindra Bank are raising fees for Dynamic Currency Conversion (DCC) on international card transactions to 3.5%. These adjustments, effective in August 2026, align DCC charges with standard foreign exchange markups, likely increasing costs for international travelers and online shoppers using rupee billing.
Axis Bank and Kotak Mahindra Bank have announced significant increases in fees for Dynamic Currency Conversion (DCC) transactions, a move that will affect customers making payments in Indian Rupees while shopping at international websites or traveling abroad. DCC is a service that allows customers to pay in their home currency at the point of sale, but banks are now aligning these charges with standard foreign-currency markup fees.
Axis Bank Fee Adjustments
Starting August 28, 2026, Axis Bank will increase its DCC fee on various credit cards to 3.5%, up from the current 1.5%. This change impacts a wide range of card products, including the MyZone, Select, Privilege, and Neo variants. For premium cardholders, the hike is more moderate; the Magnus and Magnus for Burgundy cards will see the fee rise to 2%, while holders of the Olympus card will be charged 1.8%. Investors and customers should note that these higher rates are being applied across the bank's popular product categories, potentially affecting a large base of frequent international shoppers.
Kotak Mahindra Bank Debit Card Changes
Kotak Mahindra Bank is set to implement its own fee revision for debit card transactions earlier, effective August 1, 2026. The bank is raising the DCC fee to 3.5% plus GST, a sharp increase from the previous rate of 1% plus GST. This adjustment represents a significant rise in transaction costs for customers who prefer to settle their overseas purchases in local currency.
Strategic Shift in Cross-Border Fees
The banking sector is increasingly standardizing these charges. ICICI Bank previously raised its debit card DCC fee to 3.5% plus GST in June 2026, signaling a broader industry trend toward uniform pricing for cross-border transactions. By bringing DCC charges in line with the standard 3.5% markup typically applied to direct foreign currency transactions, banks are effectively removing the pricing advantage that rupee-billing options previously offered.
From a business perspective, these moves are designed to help banks cover the rising costs associated with card networks and the complexities of processing cross-border payments. As international travel and global e-commerce volumes continue to grow, banks are looking to optimize income from these transaction flows. However, the move may influence consumer behavior, as the cost difference between choosing rupee billing and standard foreign currency conversion is now minimal. The next phase for customers and observers will be to see if other lenders follow suit or if these higher costs lead to a shift in how frequently consumers use DCC services at international merchant checkouts.