Paytm and Inox face FIR for charging illegal internet handling fees

Key Highlights

Inox and Paytm face FIR in Hyderabad for charging an illegal and immoderate fee over movie tickets.

As per RBI any merchant, online trader, or e-commerce company can’t charge a payment gateway fees.

Any movie ticket gateway is not allowed to charge booking charges, convenience fee, and cancellation charges.

Movie hall chain major Inox and Paytm are facing FIR in Hyderabad for charging an illegal and immoderate fee over movie tickets. FIR raised by a social activist Vijay Gopal highlighted that they are charging payment gateway fee on consumer transactions and don’t have proper authorization for doing so and are violating IT Act 2016. Gopal stated that Paytm works as a booking gateway for movie tickets and it is not allowed to charge booking charges, convenience fee, and cancellation charges. He also mentioned in his complaint that “The levying of such charges is illegal as it has not been authorized by the RBI.”

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As per The News Minute Report, Gopal has purchased two tickets having a real cost of Rs. 276 but was charged Rs. 80 under convenience fees, booking fees as well as cancellation protection fees.

It is also observed that BookMyShow is not charging any such fees as Paytm. Enraged over illegal charges Gopal asked the ministry of Electronics and Information Technology and RBI whether they have authorized Paytm to levy a payment gateway charge on consumer transactions or not. In response, they denied approval to any merchant, online trader, or e-commerce company for levying such fees.

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These charges of illegal fees are the violation of RBI’s Merchant Discount Rate (MDR). MDR is the cost charged from consumers by a merchant on behalf of the bank for accepting payment via credit or debit card. As per section 6 A(3) of the IR (amendment) Act 2008, A merchant cannot charge extra for the service it provides to consumers unless the service charge has been authorized by the appropriate government.

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