The best of your favourite apps, such as BookMyShow, PVR, PayTM, TicketNew, etc. are your go-to buddies when it comes to booking tickets online. But they often charge what is known as ‘internet handling fees.’
Most of us are ready to pay this extra amount of money, that varies in accordance with the amount of transaction we make. This is because of the convenience of letting a third party book the tickets for us.
But a recent suit, filed against BookMyShow, revealed that according to the law we should actually be ‘exempted’ from paying such extra fee while booking a movie ticket because it is in violation of RBI’s Merchant Discount Rate (MDR) Regulation.
What is MDR?
Every time you make a transaction with any shop or outlet using your debit or credit card, the merchant with whom you are trading is expected to pay a certain percent of the transaction money to the related base bank.
This money has to come entirely out of the merchant’s pocket and the burden of the amount to be paid cannot be shifted to the customer, aka, you.
If the above doesn’t make the picture clear to you, here’s is something that will help you to know more about Merchant Discount Rate.
The Case Against BookMyShow
Activist Vijay Gopal filed a case in the consumer court of Hyderabad against BookMyShow and PVR along with Department of Information Technology under the Ministry of Electronics and Information Technology. The court shall start the hearing on March 23rd.
Gopal shall be speaking as a representative of Forum Against Corruption.
“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,” says Vijay Gopal
Here’s what the activist recently tweeted about the case.
The fact that he brings out here is- whenever internet portals are charging ‘internet handling fee’ they are actually levying MDR, which merchants should have to pay, on behalf of customers.
To put it in an example, if your ticket costs 310 INR, along with this cost you shall be paying an extra sum of Rs 43.66 as internet handling fees that includes a booking fee of Rs 37 and Rs 6.66 Integrated GST (IGST) at 18%
Although we don’t mind paying the extra Rs. 37, we need to realize that we are under no obligation to actually pay this money. This amount, on the other hand, cannot be included in our ticket and has to be separately given out by the concerned theatre to the banks instead.
If you also have a grievance against any such violations of regulations, this is where you should go in order to bring your complaint into notice
Rationale Given By Websites
The websites, however, were not quite about this whole suit. Influx Worldwide, which has created a number of ticketing apps for PVRs and many cinema chains and platforms, had something to say about the matter.
Harish Anand Thilakan, CEO of Influx stated that the cost charged as internet handling fee is actually needed and necessary for the proper functioning of the online portals. He believes that without this cost, the infrastructure of internet platforms will collapse, and they shall not be able to provide smooth services to their customers.
“This particular fee covers more than just TDRS. This cost actually encompasses the pretty large infrastructure spends the cinemas need to incur in order to run efficient online ticketing engines. So when any of these players allow you to log on through an app or website, keeping it running takes a lot of money. The cost of infrastructure to keep this going is big,” while spekaing to TNM, an online news portal
As the case hearing will begin on 23rd March, we have to wait for the ruling of the court on the matter. But for now this much can be positively said, that a large number of people were cheated off significant sums of money over the course of the years.
As a matter of fact, according to BusinessToday, in order to ensure that the merchants do not feel the pinch of MDR, the amount of money they had to pay out to banks was significantly reduced in 2018, and somehow theatres and cinema complexes continue to charge ‘internet handling fee’ so blatantly from all their customers.
If all fares well, the court of justice will definitely favour what’s right and we might have to pay a little less for all the tickets that we might be booking in the future.