India's outbound travel sector is experiencing remarkable growth, with projections indicating over 55 million international trips by 2034. This surge is driven by rising incomes, evolving aspirations, and technological advancements in travel and financial services. Sectors such as travel technology, fintech, and hospitality are poised to benefit significantly from this trend.
Travel is Booming, But So Are Hidden Costs
More Indians are exploring the world than ever before, ticking off bucket-list destinations and immersing themselves in new cultures.
But while the thrill of travel is unmatched, the hidden costs of spending abroad can quickly turn excitement into frustration.
Imagine landing in Paris, eager to sip coffee at a charming café. You tap your phone, expecting UPI magic—only to be met with a confused cashier shaking their head.
You fumble for your Visa or Mastercard, but they charge an extra fee you never accounted for.
Or picture this: You’re in Tokyo, craving street food, but the vendor only accepts cash. You rush to an ATM, only to be hit with unexpected withdrawal charges and a baffling exchange rate that makes you wonder—did I just overpay?
For many Indians traveling abroad, these moments aren’t just minor inconveniences; they add up to unnecessary stress and expenses.
Unlike India, where UPI and digital payments rule, many developed countries still rely heavily on cash or local payment systems, leaving you scrambling for alternatives.
And then there’s the foreign exchange hassle. You either exchange cash at airports (where the rates are notoriously bad) or use third-party services that quietly deduct hidden fees.
Credit and debit cards seem like the easy solution—until you realize every transaction abroad carries a 1-3% markup, making your trip more expensive than planned.
Travel is about experiences, not financial stress.
But without the right payment strategy, you could be losing thousands of rupees—without even realizing it.
💡 Before we explore ways to navigate these hidden costs, let’s first break down some key terms that are essential to understanding foreign transactions.
Forex Markup
Forex markup is an additional fee (typically 1-3.5%) charged by banks or card networks on currency conversion when making international transactions.
It is applied on top of the exchange rate, increasing the overall cost of foreign purchases.
Foreign Transaction Fee on Top Credit Cards
| Credit Card | Foreign Transaction Mark-up Fee |
|---|---|
| HDFC Bank Regalia Credit Card | 2.00% |
| Axis Bank Magnus Credit Card | 2.00% |
| HSBC Visa Platinum Credit Card | 3.50% |
Prepaid Cards
Prepaid cards are reloadable payment cards that let users spend only the preloaded amount, without needing a bank account or credit line.
Forex Cards
Forex Cards are prepaid travel cards that allow users to load and spend multiple foreign currencies, offering a convenient and cost-effective way to make international transactions.
Prepaid Cards vs Forex Cards
Not all prepaid cards are Forex cards.
- Forex Cards are specifically designed for international travel and support multiple foreign currencies.
- Other prepaid cards may be used domestically or for specific purposes like gifting, shopping, or payroll, without supporting foreign transactions.
LRS in India
The Liberalized Remittance Scheme (LRS) is a framework by the Reserve Bank of India (RBI) that allows resident individuals to remit up to USD 250,000 per financial year for:
- Travel
- Education
- Investments
- Foreign asset purchases
Under LRS, individuals can also open a foreign bank account and transfer money from their Indian bank account to that overseas account for permitted transactions.
Smart Money Moves: How to Travel Without Losing on Fees
The good news? You don’t have to fall into the trap of hidden fees and unfavorable exchange rates.
With the right tools, you can spend abroad seamlessly—just like you do in India.
Use Zero Forex Markup Cards
Instead of paying 1-3.5% extra on every card transaction, switch to a zero forex markup card.
These cards let you spend internationally at real exchange rates with no hidden fees.
-
Niyo Global Card – Offered by Niyo in collaboration with State Bank of Mauritius (SBM) and DCB Bank, this card supports transactions in over 130 currencies with zero forex markup.
Users can load Indian Rupees (INR) via UPI and spend internationally without additional fees.
Benefits: Complimentary domestic & international lounge access, three free monthly ATM withdrawals, and no joining or renewal fees. -
BookMyForex Card – A multi-currency forex card that can be obtained without a bank account and supports loading in 14 currencies.
Zero fees for issuance, reloading, unloading, and annual maintenance.- No markup fees for transactions in the loaded currencies.
- 3.5% cross-currency usage fee applies if spending in a currency not loaded on the card.
-
IDFC First Bank WOW Credit Card – A secured credit card requiring a fixed deposit (FD) of at least ₹20,000, offering a credit limit equal to the FD.
- Zero forex markup for international transactions.
- Lifetime free card with no joining or annual fees.
- 4X reward points on every spend.
- Interest-free cash withdrawals for up to 48 days.
- Additional perks: ₹2 lakh personal accident insurance, complimentary roadside assistance, and discounts at select restaurants & wellness outlets.
💡 Why it matters: A regular card with a 3.5% forex markup means ₹1,00,000 in international spending costs ₹3,500 extra—money that could go towards an extra night at a hotel or a fine dining experience.
Withdraw Cash Wisely
When cash is necessary, avoid airport exchanges and Dynamic Currency Conversion (DCC) traps at ATMs. Instead:
- Use a zero-fee global debit card like Niyo Global to withdraw cash at ATMs with minimal or no fees.
- Choose "local currency" at ATMs – opting for INR often triggers inflated conversion rates, leading to higher costs.
Choose the Right Forex Strategy
If you prefer carrying forex cash, follow these smart strategies:
- Use services like BookMyForex or Unimoni to order forex cash online at interbank rates, instead of relying on expensive airport kiosks.
- 📅 Plan ahead – getting forex in India usually offers better exchange rates than exchanging money abroad.
Consider International Bank Accounts
If you travel frequently, opening a foreign bank account under the Liberalized Remittance Scheme (LRS) can help you hold and spend in local currency.
However, be mindful of:
- Remittance costs from India.
- Tax implications like Tax Collected at Source (TCS).
Keep an Eye on Emerging Fintech Solutions
Global fintech companies like Revolut are making strides to enter the Indian market, aiming to revolutionize the forex landscape:
- Acquisition of Arvog Forex – In 2022, Revolut acquired Arvog Forex Private Limited, a licensed forex business in India, marking its commitment to the Indian market.
- Regulatory Approvals – By 2024, Revolut secured an in-principle authorization from the Reserve Bank of India (RBI) to issue Prepaid Payment Instruments (PPI), including prepaid cards and wallets.
- This complements its existing license as an Authorized Dealer II (AD II) for multi-currency forex cards and cross-border remittances.
- Upcoming Services – Revolut plans to offer wallets facilitating both forex and domestic payments through prepaid cards and UPI, with a targeted launch in the second half of 2025.
As Revolut and similar platforms establish themselves in India, travelers can anticipate more competitive and user-friendly forex solutions, potentially reducing reliance on traditional banking methods and their associated fees.
Travel Smarter, Spend Smarter
A dream vacation shouldn’t come with financial regrets. By switching to a zero-forex markup card, making informed ATM withdrawals, and planning your forex needs wisely, you can travel the world without breaking the bank.
Next step? Check if your current bank card has forex charges—or switch to a smarter travel card today!
📢 Stay Tuned for More!
Enjoyed this blog? Stay tuned for more insights, tips, and strategies to make your international travel smarter and stress-free!
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Sources
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