BookMyShow, PVR Illegally Charging Internet Handling Fees; Case Filed In Consumer Court
RBI's MDR rule state that the merchant needs to pay this fees to the banks, not consumers
How often have you wondered about that extra ‘Internet Handling Fees’ charged by online ticketing portals and movie chains while booking tickets online?
You must have convinced yourself that this charge is for maintaining the website/app, and is justified.
But you were wrong!
Internet Handling Fees Is Illegal
Vijay Gopal, who is the President of the Hyderabad-based ‘Forum Against Corruption’ filed an RTI with Reserve Bank of India, asking this very question: Can BookMyShow, PVR and others charge this Internet Handling Fees for booking tickets online?
As per the RTI reply, Merchant Discount Rate (MDR) is a fee which the merchant needs to pay to the bank, for every transaction done by a consumer.
Hence, say you book a ticket at BookMyShow, whose price is Rs 138, there will be a MDR of Rs 16.80, which BookMyShow needs to pay to the bank, whose card/online banking platform was used for the making the payment.
But in reality, BookMyShow charges this extra Rs 16.80 from the consumer and labels it as Internet Handling Fee. This is clearly wrong, because RBI’s MDR rule clearly states that the merchant needs to pay this fees to the bank, not the consumer.
Rs 3.02 Integrated GST (IGST) at 18% will also be charged on a movie ticket of Rs 138, which the consumer needs to pay.
Vijay said, “When we go to shopping malls, these payment gateway charges are not included in our bills. If a product costs Rs 100, you pay Rs 100. But here, PVR and other movie theatres don’t want to give up a cut from their revenue to the banks and so portals like BookMyShow give the theatres an option to either bear the payment gateway charges or pass it on to the customer,”
Case Filed Against BookMyShow, PVR
Forum Against Corruption has filed a case against BookMyShow and PVR at Hyderabad’s Consumer Court, and the complaint has also been registered with the Department of Information Technology under the Ministry of Electronics and Information Technology.
On March 23rd, the Court will start the hearing.
But Websites/Apps Needs Money To Run The Operations
Influx Worldwide has created ticketing apps for PVR, Inox, Cinepolis and 26 other global cinema chains. As per Harish Anand Thilakan, CEO of Influx Worldwide, these ticketing apps have huge expenditure to run, and this fees charged by the companies from consumers helps them to run the show.
Hence, despite RBI’s MDR rule, charging Internet Handling Fees from consumers is justified, as per Harish.
He said, “This cost actually encompasses the pretty large infrastructure spends the cinemas need to incur in order to run efficient online ticketing engines.”
If you feel that any merchant or bank has charged you incorrectly, for any financial transaction, you can lodge a complaint here.
We will keep you updated, as more details come in.