In an RTI filed by Vijay Gopal to the Reserve bank of India, it was revealed that the ticketing service providers PVR and BookMyShow do not have any authority to levy handling fees on customers and that they are in violation of the RBI’s Merchant Discount Rate (MDR) regulations.
An MDR is the rate charged to a merchant for payment processing services on debit and credit card transactions. The merchant must set up this service and agree to the rate prior to accepting debit and credit cards as payment.
According to the RBI website, the MDR transactions range between 0.30% for Rs 200 transactions to 0.80% on Rs1,000 transactions.
In one of its reports, Newsminute.com quoted VIjay Gopal, the president of the Hyderabad-based ‘Forum Against Corruption’, saying that “When we go to shopping malls, these payment gateway charges are not included in our bills. If a product costs Rs100, you pay Rs100. But here, PVR or any other movie theatre, 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.”
As of now, the BookMyShow service charges 11.41% on a ticket price of Rs175-185. The charge, according to the rule, is to be paid by the service to the bank. However, the services often pass off the charges as part of the ticketing service to the customers.
Forum Against Corruption moved a consumer court in Hyderabad against BookMyShow and PVR, as well as the Department of Information Technology under the Ministry of Electronics and Information Technology.
The case is expected to be heard on March 23.