Vivek Bagree, a senior executive at the financial services firm Niyo, ran the numbers. The result: international travelers who choose the wrong payment method can burn through cash at a rate they rarely notice until the trip is over. Bagree, the firm’s Chief Business Officer for Cards, calculated that the difference between the cheapest and most expensive option can reach 12 percent per transaction.
That is not a rounding error. That is a structural cost built into how banks and card networks handle foreign spending.
The analysis targets two specific pain points. The first is the forex mark-up. Most traditional credit cards tack on between 2 and 4 percent on every international transaction, and then Goods and Services Tax gets applied on top of that.
A single coffee purchase looks harmless. Bagree’s filing points out that over a full trip, the cost compounds quickly.
The second pain point is ATM cash withdrawals. On a regular credit card, an overseas withdrawal typically triggers a cash advance fee of 2.5 to 3.5 percent, subject to a minimum. Interest starts accruing the same day.
The forex mark-up on the rupee equivalent is also applied. Travelers often overlook this entirely. Bagree did not declare a single “best” option.
The analysis breaks down three choices: credit cards, forex cards, and pre-paid travel cards. The right pick depends on how a traveler spends, the trip duration, and how much certainty they want.
That is a nuanced answer. The market, however, tends to push people toward whatever card is already in their wallet. That is where the cost hides.
The cumulative difference, Bagree stated, is often larger than travelers anticipate. For individuals who travel two or three times per year, the savings can accumulate to the equivalent of a free trip every few years.
That is a concrete, measurable outcome. It is not about abstract financial optimization. It is about whether a family’s vacation budget leaks money into bank fees or stays in their pocket.
What drives this? The numbers suggest a gap between product design and consumer behavior. Card issuers profit from the status quo.
The forex mark-up is a steady revenue stream. The cash advance fee on ATM withdrawals is another.
There is no incentive for traditional banks to simplify the math for customers. The burden falls on the traveler to compare options before departure. Bagree’s analysis provides the framework, but it requires action on the consumer side.
The likely outcome is incremental change. More travelers will shift to pre-paid travel cards or specialized forex cards as awareness spreads.
Financial services firms like Niyo will continue to publish comparative data, hoping to capture market share from incumbents. The 12 percent figure is a powerful hook. It is specific, it is large enough to matter, and it is tied to a behavior — international spending — that is growing as travel rebounds post-pandemic.
But the core problem remains structural. The fees are embedded in the system. No single analysis will eliminate them.
What Bagree’s filing does is arm the consumer with a number. A traveler who knows they can save 12 percent per transaction has a reason to switch.
Whether they actually do is a different question. The coffee purchase still looks trivial. The trip cost still looks like one lump sum.
The fees are invisible until someone like Bagree pulls them into the open.
