That 80 percent of rail tickets in India are booked online speaks volumes of the quantum jump made by the nation in digitisation and hoi polloi warming up to online commercial transactions.

Time was when booking counters would open at railway stations for a few hours in ungodly hours with a belligerent and bleary-eyed booking clerk truculently closing the shutters no sooner than they opened saying tickets sold out.

To be sure online transactions spare the customer the tedium of hot-footing to the booking counters, standing in serpentine queues and fishing out wads of cash from the purse. But, isn’t it equally true that commercial establishments too benefit in equal measure, in fact, more from online transactions?

Booking centres are either owned or rented. So, there is saving on investment and rent. Then there is a huge saving on counter clerks’ and supervisors’ salaries. Handling cash is cumbersome and fraught. There is a whole lot of savings on these and more for the service provider. Why then do we wink at the convenience fee payable by the customer when it is a win-win for both? Some airlines impose an unconscionable convenience fee of Rs 300 per passenger when the reality is self-booking is akin to self-service at restaurants.

To be sure, payment gateways have to be paid but that hardly justifies convenience fee, especially given the fact that net-net, the service provider benefits as much as the customer.

The issue came back into public discourse recently when the Railway Board sought to put a shovel into Indian Railway Catering and Tourism Corporation’s (IRCTC’s) sizeable earnings from convenience fee. In the pandemic year of FY 2021, revenue from internet ticketing was the biggest chunk of IRCTC’s total operational revenue -- accounting for 57 percent. In the pre-pandemic year of FY 2019-20, revenue from internet ticketing was the biggest chunk of IRCTC’s total operational revenue was at a much lower level of 27 percent

Small wonder, the Railway Board hungrily sought 50 percent of it only to sheepishly backtrack when IRCTC shares slumped in the bourses in the wake of the Railway Board avarice.

The amount IRCTC charges as a convenience fee varies across categories of tickets, depending on whether one is travelling AC or Non-AC class. Excluding the goods and services tax (GST), IRCTC charges Rs 15 as convenience fee per ticket in the Non-AC category and Rs 30 per ticket in the AC class tickets. This has been the rate since it resumed levying convenience fee from September 2019. For those using the government Unified Payment Interface (UPI), BHIM, IRCTC gives a discount on the convenience fee charging them only Rs 10 for Non-AC per ticket and Rs 20 per ticket for AC Classes.

That IRCTC is a separate company, a listed one, and that does not justify the impost any more than airlines are. We pay our electric bills, water bills, telephone bills, municipal taxes and what have you online. Net banking and online purchases of insurance products belong to the same genre. What if all these service providers wake up to the potential of convenience fee taking a cue from IRCTC and airlines?

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Convenience fee is a euphemism for fleecing the customer and a perverse impost on them for doing it themselves. IRCTC must make profits from its catering services by improving the quality and safety of its food. Its robust portal can give a stiff competition to the Amazons and Flipkarts of the world. But, instead it has chosen to pluck the low hanging fruit without batting an eyelid.

Shouldn’t the Competition Commission of India (CCI) stop this monstrosity? CCI should read the riot act to the so-called convenience providers---you can’t reap the benefits of online transactions and in a manner of double take make a grievance out of it which is what slapping convenience fee on hapless customers amounts to.

Come to think of it, online transactions benefit both the service providers and their customers. It is disingenuous therefore to say that the customer alone benefits. The boot is, in fact, on the other leg inasmuch as service providers stand to benefit immensely, a lot more than what customers benefit. Digitisation and online transactions in addition leave a transparent trail conducive for mainstreaming the economy. Let us not even remotely penalise the customer for gravitating towards openness and a cashless ecosystem.

— S. Murlidharan is a CA by qualification and writes on economic issues, fiscal and commercial laws. The views expressed in the article are his own.

Read his other columns here

(Edited by : Kanishka Sarkar)

First Published:Nov 6, 2021 7:30 AM IST