What are International Card Payments and How Do They Work?

International card payments happen when customers from a country that is not yours buy from your online business using their own credit or debit card.

For you as a business owner, this means you can accept payments from people outside your country, and they can pay just like any local customer would using their regular bank card.

For example:

• You run a handmade jewellery store online, based in Mumbai.
• A customer from Canada finds your Instagram page, visits your website, and places an order.
• She pays using her Canadian Visa credit card.
• You receive the money in INR through your payment provider, like PhonePe PG.
• That’s an international card payment.

But not all International Card Payments work the same way. When accepting international payments, how the currency is shown and converted can vary.

There are two main types of international card transactions your customers might experience:

1. DCC – Dynamic Currency Conversion

• The customer sees and pays in their own currency (like USD, EUR, GBP etc.,).
• The payment processor or your website shows the converted amount.
• Conversion happens on your side, using your provider’s exchange rates.
• You still get paid in INR.

2. Non-DCC- Standard Cross-Border Payment

• The customer is charged in your currency (INR).
• Their bank converts the amount to their local currency later.
• The exchange rate is controlled by the customer’s bank or card issuer.

Understanding the difference can help you manage costs, improve customer experience, and choose the right settings for your payment gateway.

How do International Card Payments Work?

1. On the Business side:

Payment Gateway processes the card by checking:

• Card validity
• Fraud detection
• If the customer’s bank allows international transactions

Currency Conversion:

• If DCC is enabled, the conversion happens before charging the customer
• If Non-DCC, the customer’s bank does the conversion

Authorization & Capture:

• The payment is authorized by the cardholder’s bank
• The amount (after conversion and fees) is captured and sent to your merchant account

Settlement:

• The final amount is transferred to your Indian bank account in INR
• This may take 1–3 working days, depending on the provider

2. On the Customer’s side:

Product Selection:

• The customer browses your online store and selects a product.

Checkout:

• They enter their shipping address (outside India)
• They enter their card details (like a US-issued Visa or EU MasterCard, etc.,)

Currency Display:

• If you use DCC, the price may be shown in their local currency (e.g., USD)
• If you use Non-DCC, the price will be shown in INR

Click “Pay”:

• The customer clicks the button and completes the transaction.
• On their end, the payment is instant.

Notification:

• Both you and the customer receive a confirmation email or message

What Fees Should You Expect When Accepting International Card Payments?

When you accept international payments through PhonePe Payment Gateway, a few standard fees are applied. These are important to understand so you can price your products or services correctly and know exactly how much you’ll receive after each transaction.

Let’s break them down:

1. Transaction Fee – approx. 3% to 4.5%

This is the basic processing fee for accepting a credit/debit card issued outside India.

• Charged on each transaction
• Usually a percentage of the total amount
• Higher than domestic card fees due to additional risk and processing complexity

2. Currency Conversion Fee / Cross-Border Fee – approx. 1% to 2%

This fee is for converting the customer’s foreign currency (like USD or EUR etc.,) into INR.

• Applied when the card currency differs from your account currency
• Some providers label it as a “foreign exchange markup”

3. Other Possible Fees

Some providers may also charge:

• FX Spread or Markup: Built into the exchange rate (you might not see this separately)
• Gateway Setup or Annual Fees: One-time or recurring charges (e.g.,₹2,000–5,000/year)
• Refund/Chargeback Fees: Fees when a customer disputes a charge

4. Combined Fees (Bundled Model)

Some payment gateways offer a flat, all-in-one international fee,  often between 3.5% to 5% total.

This bundle typically includes:

• Card processing
• Currency conversion
• Cross-border risk handling

This makes it easier to calculate your net payout, though the exact breakdown may not always be shown. 

In a global economy, your business needs more than just local reach,  it needs the ability to serve customers anywhere in the world. With PhonePe Payment Gateway, accepting international card payments is seamless and secure. Customers can pay in their own currency using their existing cards, and you receive settlements in INR without any operational hassle. Backed by PhonePe’s trusted infrastructure, PhonePe PG enables you to expand globally, boost customer confidence, and grow your business without borders.