Kotak Mahindra Bank DCC fee hike from August 1: What debit cardholders should know

Kotak Mahindra Bank has announced a revision in its Dynamic Currency Conversion (DCC) fee. The revised rates will come into effect from August 1, 2026.

As part of the revision, the DCC fee on Kotak debit card transactions has been hiked from 1% plus GST to 3.5% plus GST of the transaction amount.

Dynamic Currency Conversion (DCC) is a service offered by merchants wherein, while using your debit or credit card internationally or on international websites, you can choose to make the payment in your home currency instead of the local currency.

“The DCC fee is applicable on transactions conducted at international merchants, including transactions initiated within India but processed by overseas merchants,” Kotak Mahindra Bank said in its notification.

To avoid the DCC charge, customers may opt to make the payment in the merchant's local currency.

The DCC mark-up fee will be applicable on all ATM, POS/in-store, and online transactions, the bank added.

For the same underlying purchase amount, customers will now be required to pay a higher DCC fee. For instance, if you spend ₹1 lakh on an eligible transaction, the DCC fee from August 1, 2026, will increase from the current ₹1,000 to ₹3,500, before GST.

Furthermore, frequent payments made in Indian rupee at international merchants could add up to a substantial amount over multiple transactions.

The change is more relevant for customers who frequently shop on overseas websites or transact with international merchants. Therefore, before deciding on the mode of payment, it is advisable to calculate the final rupee cost you will have to bear. This is as paying in the local currency or via any other mode that carries a lower foreign-mark up may prove to be cheaper.

Earlier, another private sector lender, ICICI Bank, increased the DCC fee from 1% to 3.5%, effective June 21, 2026.