One afternoon, he paid AED 120 for a quick lunch. The SMS came instantly: ₹2,910. He frowned. The mid-market rate that day would’ve put it closer to ₹2,815. Not a disaster, but enough to feel slightly cheated.
“It’s supposed to be zero fees,” he muttered. It’s a line I’ve now heard from more travellers than I can count.
The irony is that he did everything right. He avoided airport money changers, chose a card with no visible foreign transaction fee, preloaded it, and even cross-checked the schedule of charges. And yet, he lost money—quietly, invisibly, and in ways most Indians don’t realize.
Indians are travelling more, and bleeding small amounts abroad without noticing it.
RBI data show overseas travel spending has touched $17 billion and is growing every year. Families now travel to Dubai, Bangkok, London, and Singapore more frequently, sometimes twice a year. But while Indian travel habits have evolved, the way cross-border payments are priced hasn’t kept pace.
Most travellers assume the villain is the visible “fee”. It isn’t.
No free lunch
The truth is simple: there is no such thing as a zero-cost card.
Every international transaction has two components.
First, the upfront fee—the part providers want you to notice.
Second, the exchange rate—the part they hope you won’t check.
When you Google a currency pair, you see the mid-market exchange rate, the midpoint between global buy and sell prices. It’s the fairest benchmark.
But most “zero forex” cards don’t use this rate. Instead, they recover revenue through subtle exchange-rate padding.
If the mid-market AED–INR rate is 23.50 and your provider gives you 23.85, that 35 paise gap is the real fee. It’s not written anywhere, not disclosed upfront, and certainly not advertised.
You only see the final rupee deduction. It looks close enough. And most travellers don’t run side-by-side comparisons. That’s how people overpay while believing they’ve chosen the cheapest option.
Then there’s the biggest leak of all: dynamic currency conversion (DCC).
If there is one personal finance rule that saves more money abroad than any budgeting hack, it’s this: when a machine asks, “Would you like to pay in INR?”—the answer is always no.
Paying in INR triggers DCC. This allows the merchant—not your bank or card issuer—to set the exchange rate. And merchants have no incentive to offer fair pricing. DCC margins routinely range from 4% to 10%.
Even financially savvy travellers fall for it because INR on the screen feels transparent. It isn’t. It’s a psychological comfort trap. Always pay in the local currency of the country you’re in.
What to check
There are no truly zero-cost international payments. If you use a zero forex card, look for three things.
First, how close is the exchange rate to the mid-market rate—the one you see on Google?
Second, what are the obvious and non-obvious charges? Inactivity fees, loading and unloading fees, foreign transaction fees, ATM withdrawal fees—all of these add up.
Third, do you understand DCC and know how to avoid it?
Think less in terms of zero forex and more in terms of transparent forex.
Why it persists
Most of us are careful with domestic spending. We compare prices, check discounts, and shop around. But the moment we step into another country, our financial instincts soften.
There are a few behavioural reasons.
- Information asymmetry—you don’t know what a fair rate looks like.
- Time pressure—airport kiosks, hotel lobbies and taxi queues don’t encourage comparison.
- Lack of transparency—providers highlight what’s free, not what’s inflated.
- Legacy beliefs—“forex is complicated, just get it done.”
Cross-border payments thrive on urgency. And people in a hurry rarely compare anything.
The bigger issue is that travellers believe they are being careful. They avoid Indian credit cards abroad, buy no-markup travel cards, track ATM fees—and still return confused about why they spent more than expected.
That’s because they optimize for visible costs while quietly losing money on invisible ones. Traditional providers are not required to use the mid-market exchange rate, and many don’t.
You cannot control what you cannot see. And today, most cross-border payment products are built to keep the real cost hard to see.
Transparency matters
India is one of the world’s fastest-growing travel markets. As our global footprint expands, transparent pricing shouldn’t be a luxury feature—it should be standard.
Until the industry moves in that direction, awareness remains the traveller’s strongest currency. A five-second check of the mid-market rate before tapping your card may not feel like much. But across a week-long holiday, it can save more than you expect.
Travelling is meant to broaden your world, not your hidden fees.
Taneia Bhardwaj, South Asia expansion lead, Wise, a global fintech firm
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