It is very easy to book a movie ticket online through a mobile phone application or a website on your computer. But did you know what this extra ‘internet handling fee’ on each ticket means?
An RTI query was filed by Vijay Gopal, the president of the Hyderabad-based ‘Forum against Corruption’ with the Reserve Bank of India. . It reveals that these platforms that provide online movie ticket booking services do not have any authority to levy such charges. This is a violation of the RBI’s Merchant Discount Rate (MDR) regulations.
The MDR is a payment gateway fee. It is paid by the merchant to the bank for accepting customer payments via debit or credit cards. The RBI, in its response stated that the fee has to be paid to banks by merchants for internet-based online transactions. But for movie tickets, this fee is now being passed on to the consumer by online booking portals, like BookMyShow.
For instance, a movie ticket booked through BookMyShow portal costs Rs 157.82. The same ticket costs just Rs 138 when booked at the box office. The portal charges Rs 19.82 as internet handling fees. This comprises a booking fee of Rs 16.80 and Integrated GST (IGST) of Rs 3.02. Most of us don’t mind paying this little extra cost to beat the queue. However, this Rs 16.80 is to be paid by BookMyShow to the bank and not by the customer.
BookMyShow gives all theatres featured on their portal an option to levy the payment gateway fee on the customer in the form of internet handling fees. This in fact, the theatres are supposed to pay that amount to the bank for each debit/credit card transaction.
The organization moved a consumer court in Hyderabad against BookMyShow, PVR and the Department of Information Technology under the Ministry of Electronics and Information Technology. The case will be heard on March 23.
Harish Anand Thilakan, CEO, Influx Worldwide, built the ticketing apps of PVR Cinemas, Inox and Cinepolis amongst others in India, and for over 26 other cinema chains globally. He said, “The cost is essential for a premium service to consumers. This particular fee covers more than just TDRS. The cost actually encompasses pretty large spends that cinemas need to incur in order to run efficient online ticketing engines. When any of these players allow you to log on through an app or website, keeping these running takes a lot of money. The cost of infrastructure to keep this going is big”.
To report a violation by a merchant, approach the bank used by the merchant to make the transaction. But in most cases, the banks do not give any information. If the bank takes no action within 30 days or if the bank’s answer is not satisfactory, the consumer can approach the office of the Banking Ombudsman. In the meantime, these firms can levy their internet handling fees on the consumer. The RBI has no regulations in place to penalize a merchant violating the MDR regulations.