Banks, fintechs team up to woo young Indian travelers with zero-forex cards

When Shalini Warrier, the executive director at Federal Bank, talks about why young Indians are suddenly getting credit cards that don't charge them for spending money abroad, she starts with a simple observation: people hate uncertainty. The moment a traveler hears that their bank might tack on a three or five percent fee for every foreign transaction, the mental math becomes exhausting. Will the meal cost what they think? Will the hotel? By December, fintech startup Fi had decided to eliminate that friction entirely, dropping the foreign currency transaction fee on its Amplifi credit card from one percent to zero, matching what it already offered on debit cards. It was a small move that signaled something larger shifting in Indian banking.

The timing matters. India's outbound tourism industry has staged a sharp recovery since the pandemic ended, and the numbers tell the story: according to a McKinsey report from November, the country had already clawed back to sixty-one percent of its pre-pandemic travel volume. Thailand, Malaysia, and Sri Lanka had removed visa requirements for Indian tourists. Southeast Asia, Central Asia, and the Middle East had become genuinely affordable. A generation of salaried professionals—typically between twenty-seven and thirty-six years old, often working in software or consulting—had begun taking international trips as a regular part of their lives. For them, shaving three to five percent off every foreign purchase could mean the difference between staying within budget and blowing it.

Fi was not alone. Jupiter and Scapia, both fintech startups, had also launched zero-forex-markup credit and debit cards, each in partnership with Federal Bank. Equitas Small Finance Bank, SBM Bank, and DCB Bank had similar offerings through a different fintech partner, Niyo Global. Some of these cards came with conditions—certain debit cards waived fees only up to a monthly transaction limit, beyond which a 3.5 percent rate kicked in. Others had no strings attached. A few required customers to link a fixed deposit to the card; Niyo Global's offering through SBM Bank, for instance, needed a minimum FD of five thousand rupees, which would earn interest at up to 7.25 percent annually while also determining the card's credit limit. The FD essentially secured the credit line for the bank while giving the customer a dual benefit: interest income plus cheaper international spending.

What made these partnerships work was a fundamental mismatch that banks and fintechs could solve together. Federal Bank had branches, but those branches attracted neighborhood customers—small and medium enterprise owners, people living near the physical location. They were not reaching salaried millennials. Fintechs, by contrast, had digital reach and the ability to build personalized products for customers banks had never touched. But fintechs could not issue credit cards. Only banks could do that, and only banks had the regulatory backing and capital to operate at scale. So they merged: the bank provided the license and the money; the fintech provided the distribution and the innovation. Warrier explained that when Federal Bank sat down with fintech partners, it was not just business development people in the room. Compliance officers and risk managers came too. They walked through operational risk, credit risk, cybersecurity compliance. The bank was clear about what it would and would not accept.

The strategy was explicitly targeted. Warrier described the ideal customer: a tech-savvy salaried millennial, probably taking one international trip per year, someone for whom the certainty of knowing their exact costs abroad would be genuinely valuable. Anil Goteti, the founder and CEO of Scapia, said his company's products—a co-branded credit card with Federal Bank and an in-app travel booking platform—were built for exactly that person. Scapia's users had traveled across fifty countries on five continents using the app and card. The Scapia-Federal Bank card charged zero joining fees, zero annual fees, and zero forex markup. It was a complete elimination of the friction points that had historically made international travel feel expensive.

The financial picture underneath was more complicated. Jupiter, operating under Amica Financial Technologies Limited, had earned seven crore rupees in the fiscal year ending 2023, a jump from forty-two lakh the year before—but its losses had nearly doubled to three hundred twenty-seven crore. Fi, under Epifi Technologies Private Limited, had seen its losses shoot to three hundred two crore, a twenty percent increase, while its revenue from operations more than than doubled to thirty-eight crore. These were companies burning significant money to acquire customers and build market share. Scapia's finances were not public, but in November the previous year it had raised twenty-three million dollars in Series-A funding led by Elevation Capital and Binny Bansal's 3STATE Ventures, suggesting investors believed the model could eventually work.

What was clear was that the market had room for multiple players. Federal Bank alone had partnered with Scapia, Fi, and Jupiter on zero-forex cards, while also offering a one-percent-forex card with OneCard. The market was large enough, Warrier said, for all of them to coexist. The real question was whether the economics would eventually work—whether the customers acquired at such cost would stay, spend, and eventually become profitable. For now, the young Indian traveler had never had it better: the uncertainty was gone, the fees were gone, and the world was suddenly cheaper to explore.