BookMyShow, PVR face consumer court proceedings over convenience fees

A Right to Information query filed by Hyderabad-based Forum Against Corruption has brought under scrutiny the internet convenience or handling fees currently charged by online ticketing platforms such as BookMyShow and e-commerce companies. Specifically, the RTI challenges whether such platforms have the right to pass on Merchant Discount Rate charges to the consumer.

This is the subject of a case being filed by the body at a consumer court in Hyderabad which challenges BookMyShow and film entertainment company PVR, which also runs its own online ticketing platform. The hearing for the case is scheduled for 29 March 2019.

When contacted, BookMyShow refused to comment, stating that the matter was sub-judice.

Internet handling charges or convenience fees include operational charges and revenue share charged by the platform and MDR. Ticketing platforms like BookMyShow also pay multiplexes a fixed fee for integration of their application programming interfaces from the convenience fee charged.

The Reserve Bank of India’s response to the RTI application filed on 16 January 2019 clearly mentions that BookMyShow as an entity is not regulated under The Payment and Settlement Systems Act, 2007.

Vijay Gopal, president of the Forum Against Corruption, said that it was unfair for platforms to bill MDR to users instead of the traders or merchants, or in this case, the online platform. “We had also filed a complaint with the Ministry of Electronics and Information Technology (MeitY) on 21 January but they haven’t responded to the same,” he added.

MDR, which is the fee that merchants pay banks to process an online transaction, is typically charged at 1-3% of the value of the transaction. An executive with a ticketing platform said on condition of anonymity that it is charged on the base price of the ticket, and not on the entire transaction value.

In its response to the RTI application, which asks whether it was legal or allowed for merchants, traders or online sellers to bill consumers for payment gateway charges, the central bank stated, “The RBI has not authorised any merchant, online trader or e-commerce company to levy payment gateway charge on the consumers’ transaction and pass the same to the consumer.”

The issue at hand has precedence in a public interest litigation filed by Sunil Lulla in the Bombay High Court in 2013 which challenged a number of theatres and ticket booking platforms for levying additional charges on the consumer. The multiplexes and theatres that were in the spotlight then were BookMyShow, Big Cinema, Fame India, INOX, Fun Multiplex, Sterling, Globus Cinema, New Excelsior, 24 Karat Multiplex, HDIL Broadway, Abhiruchi City Pride and E-Square.