RBI recently declared that ticket booking apps such as BookMyShow and others cannot charge an internet handling fee to consumers anymore. According to the RBI, charging this internet handling fee is a direct violation of the body’s Merchant Discount Rate (MDR) regulations, which is why these apps need to stop doing so immediately. This revelation of the RBI has led to a case being filed against BookMyShow and PVR by Vijay Gopal, the president of the ‘Forum Against Corruption’, which is based out of Hyderabad.
How did this all go down?
After Vijay Gopal filed an RTI query regarding online ticketing apps charging internet handling fees, he received a statement regarding the RBI’s official stance on the matter. Armed with this knowledge, he then filed a complaint against BookMyShow and PVR Cinemas in court. The hearing has been scheduled for 23 March and can be one that will change the way booking apps in India currently operate.
Moreover, it is important to note that this online internet handling fee is not just something that ticketing apps use. These fees are charged by multiple platforms across various industries. Apps that offer food delivery, cab booking, and others all charge this. So, this case will be quite momentous in terms of changing the way that many of the apps consumers use on a daily basis work.
What is the Merchant Discount Rate?
The merchant discount rate is basically an online gateway fee that all merchants have to pay the bank. When this is paid to the bank, it accepts the payments that have been initiated by the merchant’s customers, making the transactions valid. This fee is something that the merchant has to pay, not the customers of the merchant. However, by charging ‘internet handling fees’ these merchants are ensuring that they charge the amount to the customer and cut down on their losses.
The charges that platforms add are over and above the base charges of tickets. Customers have to pay needless amounts of cash when using these platforms, which is why Vijay Gopal filed the RTI in the first place.