Forex Charges

Last Updated – 4 years ago

Have you ever transacted in foreign currency through your debit or credit card? Did you check forex charges levied on your transaction? Ever wondered what might be various forex charges levied on a forex transaction? Today, I will take you through some of the common fees that are levied by banks or card providers when you transact in a foreign currency.

Exchange Rate

Rate which is known to almost everyone who transact in foreign currency. Exchange Rate is value of one currency denominated in another currency & it is also known as Inter-bank rate. This rate is typically shown as USDINR or EURGBP. USDINR is value of USD (US Dollar) denominated in INR (Indian Rupee). This rate varies daily & it is dependent on economical performance of your country. You can check the latest conversion rate on XE.

July 15, 2019 : 1 USD = 68.5292283 INR

Now notice throughout the article, how various fees will affect the real exchange rate.

Service Provider Fees

Bank ties up with one of the network providers like visa, mastercard, amex, diners etc. & offer you card. I coined this term while writing the post. It is my dream that every service provider a.k.a network providers let user transact on exchange rate. However, it is very unlikely to happen because they need to make money to run the business. Thus, card or network providers like Visa, Mastercard, AMEX & Diners charge a fee on top of exchange rate. Typically this rate is very close to interbank rate.

You can check the exchange rates of Visa & Mastercard after applying service provider fees. I couldn’t find any link to Amex & Diners exchange fees calculator. (What are they hiding?). Let’s look at the rates of Visa & Mastercard on July 16, 2019.

Visa : 1 USD = 68.613139 INR (+ 0.12 %)

Mastercard 1 USD = 68.670433 INR (+ 0.20 %)

Mark-up or Bank Fees

Here comes the real enemy. When you transact in your home currency, credit / debit card don’t charge any fees but the moment you transact in foreign currency, those lengthy TnC bank sent you with the card starts playing with you. Yes, even I throw them in dustbin as soon as I open the envelope & remove my card.

Card providers usually charge up-to 3.5% of mark up or bank fees on your foreign currency transaction. This is over & above service provider charges. This is profit to the bank out of your foreign currency transaction. Let’s look at exchange rate after mark up fees. For illustration, I will consider only Visa variant & 3.5% mark up fees.

1 USD = 71.0145989 INR (+ 3.50% )

Banks may waive this fees for you if you have good relationship with the bank. There are few credit as well as debit cards which offer 0% mark up fees by default. One such card is GoNiyo Multi Currency Forex Card. By choosing right card or having good relationship with your bank can indeed make a lot of difference.

Service Tax

Service tax or GST is baby tax considering all other fees. Network / Service Provider fees is inclusive of service tax however, if mark up fees is levied, you will see GST tagged along with it. GST is 18% in India. Let’s look at our 1 USD conversion with GST on Visa variant card.

1 USD = 71.4468616 INR (+ 4.25% )


Transacting with your card abroad makes life easy but you need to be aware of what “real” price are you paying for it. You can avoid forex charges like mark up fees & taxes by choosing right card but avoiding service provider fees is difficult. Although, these fees are negligible it makes huge impact on foreign expenses. After all, every penny saved is every penny earned 🙂

By Pranav Date

Author is a credit card fan. Loves investing without any frills. Believes in every penny saved is penny earned.

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