Internet handling fee –  BookMyShow under RBI Microscope

Internet handling fee – BookMyShow under RBI Microscope

Internet handling fee – charged by movie ticket booking sites and payment platform are under RBI microscope/scrutiny for charging ‘convenience’ and ‘internet handling’.

It is very easy and convenient to book a movie ticket online through app on ones mobile phone or a website using computer.  But one has to think what is the ‘internet handling fee’ that we pay against each ticket means.

Internet handling fees in India :

India is a country which produces over 1000 films every year, which is a record in itself. This tells us how crazy the country is.

Previously, there used to be movie theatres, single-screen movie theatres, where one movie would run once. Tickets were sold at counters and nothing was done online.

However, multiplexes came, multiple movies screened at a single time, seats became important, recliners were preferred and everything changed.

The movie-going experience suddenly went on a different level altogether. With that experience, the ticket prices and the mode of booking also became different.

The internet handling fees as of 2018 is 17% i.e. for a ticket of around 300 INR you pay Rs.50/-as fees. But that’s not it, since they are giving you a service you will have to pay the GST on top of this 17%.

Internet handling fees on BookMyShow :

BookMyShow gives all theatres featured on their portal an option to levy the payment gateway fee on the customer in the form of internet handling fees, when in fact, the theatres are supposed to pay that amount to the bank for each debit/credit card transaction.

BookMyShow is an aggregator service for the entertainment industry where they assist one with information and ticketing for movies and different events across many cities all over the Country.  They let one book movie tickets in cinema in the simplest, easiest and the smartest way without unnecessary glitz.

How it works :

The BookMyShow aggregator charges Rs.19.82 as internet handling fees that includes a booking fee of Rs.16.80 and Rs.3.02 Integrated GST (IGST) at 18%.  Most of the people don’t  mind paying a little extra cost to avoid standing in the queue.  The amount Rs.16.80 is to be paid by BookMyShow to the bank and not by the customer.

BookMyShow gives all theatres mentioned in their portal an option to levy the payment gateway fee on the customer in the form of internet handling fees, where in reality it the theatres are supposed to pay that amount to the bank for each debit or credit card transaction.

RTI Query – Internet handling fee :

A RTI query was lodged to the Reserve Bank of India by Sanjay Gopal, who happens to be the President of ‘Forum against Corruption’. RBI, therefore said that online ticket aggregators do not hold the right to charge any kind of fee as they are not authorized to do so.

It also said that, if any such charge is levied then a complaint can be lodged to RBI. It further stated that these companies are violating the law of Merchant Discount Rate (MDR).

According to the IT Act 6A (3) section, digital service providers are not allowed to charge such fee without permission from RBI.

For a service provider of this nature, to collect, retain and appropriate service charges, they need to take permission from the RBI.

Views of law on internet handling fee :

The RBI in an RTI query recently stated that online platforms through which movie tickets are booked do not hold the authority to levy handling fees from customers. The reply further explains that this is in violation of the RBI’s Merchant Discount Rate (MDR) regulations.

What is MDR (Merchant Discount Rate)?

MDR is basically cost paid by a merchant to a bank for accepting payment from its customers via credit or debit cards every time a card is used in their stores. This essentially means that it is the merchant/trader who has to pay the MDR and not the customer.

Therefore levying ‘internet handling fee’ on customers is in violation of the MDR regulations and therefore illegal.

The RTI query to the Reserve Bank of India by Vijay Gopal, president of ‘Forum Against Corruption’ a body fighting against corruption, showed that a user doesn’t have to pay extra while booking movie tickets online through a mobile app or website.

The RBI stated that online platforms through which movie tickets are booked, do not hold the authority to levy handling fees from customers. The reply further explains that this is in violation of the RBI’s Merchant Discount Rate (MDR) regulations.

Illegal charges – Internet handling fee:

MDR is the cost paid by a merchant to a bank for accepting payment from its customers via credit or debit cards every time a card is used in their stores. A cost which by its definition means that it should be borne by the merchant/trader and not the customer.

However, today’s platforms such as BookMyShow, Paytm and PVR cinemas continue to charge exorbitant ‘internet handling fee’ from customers, which is in violation of the MDR regulations and therefore illegal.

Public action :

Those who want to complain about these problems against such RBI regulated entities can do so now.  To report a violation by a merchant, one has to approach the bank that is being used by the merchant to make the transaction.  But in a majority of cases, the information is often not available to the customer who is making the payment.

If the bank rejects to take action within 30 days or if the bank answers negatively, the consumer can approach the office of the Banking Ombudsman.

Statistics – Internet handling fee :

Network18, the investor company of BookMyShow reported consolidated revenues of rs.1538 crore for the quarter ended 31st December 2018.  It shows a 250% jump from the same quarter last year.

BookMyShow witnessed a 7 million app downloads. The aggregator managed ticketing for Pro-Kabbadi League for 4 teams, football league ISL 2018 and to some of the electronic music events. 

Last year in July,  Big Tree Entertainment the parent company of BookMyShow  raised a series of D funding of $100 million led by TPG Growth, with participation from existing investors.

How the Internet handling fee is charged?

For example if a customer purchases a premium ticket at the Cinepolis in Orion East Mall, Bengaluru, the customer have to pay a total of  Rs.297.46 which also includes the original ticket price of Rs.260 plus Rs.32 as ‘booking fees’ and IGST amounting to Rs.5.76.

Online booking sites serving movie buffs are passing on the burden to the customers. 

This looks like a daylight robbery by the service providers.  Strict regulations are the need of the hour.

Digital libraries  – Karnataka – Bengaluru

Digital libraries – Karnataka – Bengaluru

Digital libraries will soon be a
reality in Bengaluru city and in other places in Karnataka. 

Cloud based digital libraries will be set up in 30 districts, 26 cities and in 216 taluks in Karnataka State.  This facility offers its members access to books and other resources.  A member of a library can study and test materials through websites and mobile app.

Over the past few years, libraries throughout the world have been in a state of transformation as a result of the impact of information technology.

No area of the library has remained untouched. The impact on collections, services, staff, and facilities has had major ramifications on budgets, planning, and training.

Thus
the concept of Digital Library has come which focus on access and service not
on buildings and volume.

Digital library :

A digital library is a collection of documents in organized electronic form, available on the Internet or on CD-ROM (compact-disk read-only memory) disks. Depending on the specific library, a user may be able to access magazine articles, books, papers, images, sound files, and videos.

Digital
library has certain characteristics, which make them different from traditional
library. It has expansive and accurate system of searching with large volumes
of text, image and audio-video resources. Digital libraries do not need physical space
to build collection and it can be accessed from anywhere, any time.

Need of E-library :

Digital libraries are systems providing user with coherent access to a very
large, organized repository of information and knowledge Digital library is a global virtual library. As a
result of this there is a worldwide need and trend to collect organize manage, protect and
distribute information in digital form.

The digital/Electronic Library System enables users to obtain open digitized
data from anywhere in the world by online access. With the various functions as
shown below, the Electronic Library System supports a series of user’s
actions for searching and reading books.

History
:

The
early history of libraries is poorly documented, but several key thinkers are
connected to the emergence of this concept. Predecessors include Paul Otlet and
Henri La Fontaine’s Mundaneum.  An
attempt begun in 1895 to gather and systematically catalogue the world’s
knowledge, the hope of bringing about world peace.

The
establishment of the digital library was total dependent on the progress in the
age of the internet. It not only provided the means to compile the digital
library but the access to the books by millions of individuals on the World
Wide Web.

An
early example of a digital library is the Education Resources information
Center (ERIC) a database of education citations and abstracts, which was
created in 1964 and made available online through DIALOG in 1969.

There are four major
types of libraries:

  1. Academic libraries serve colleges and universites.
  2. Public libraries serve cities and towns of all types.
  3. School libraries serve students from Kindergarten to grade 12.
  4. Special libraries are in specialized environments, such as hospitals, corporations, museums, the military, private business, and the government.

Advantages:

A digital library is not confined to a
particular location or so called building it is virtually distributed all over
the world. The user can get his/ her information on his own computer screen by
using the Internet. 

  1.  No Physical boundary
  2. Round the clock
    availability
  3. Multiple access
  4. Structural approach
  5. Information retrieval
  6. Preservation and conservation
  7. Space
  8. Net working
  9. Cost

Disadvantages :

The computer viruses, lack of standardization
for digitized information, quick degrading properties of digitized material,
different display standard of digital product and its associated problem,
health hazard nature of the radiation from monitor etc. makes digital libraries
at times handicap.

  1. Copyright
  2. Speed of access
  3. Initial cost is high
  4. Band width
  5. Efficiency
  6. Environment
  7. Preservation

Importance
of e-library :

Libraries play an important role in the educational and research process. A digital library can provide access to many of the knowledge networks around the world, which is a necessary component of any research experience.

Access to information and knowledge are
fundamental for education and development. 
It is important  as well for being
an essential requirement for improving the quality of life for people living in
regions where the population has not yet reached a high level of economic and
social development.

Libraries play an important role in the
educational and research process. A digital library can provide access to many
of the knowledge networks around the world, which is a necessary component of
any research experience.

Digital library concept :

Digital library is the concept of information stored digitally and made accessible to users through digital systems and networks, but having no single location.Traditional libraries collect, organize, provide access to, and preserve objects in their collections.

Traditional libraries collect, organize,
provide access to, and preserve objects in their collections. A library
collection may include books, magazines, journals, theses, dissertations,
manuscripts, audio-visuals, maps, etc.

The flexibility of digital technology allows it
to handle new kinds of object efficiently. Digital library collections can
include things without direct physical analogs, such as algorithms or real time
data feeds. They also may include digitized representations of what have
traditionally appeared largely in museums and archives.

With the rise of cost of paper publications and
library storage, increasing use of computers, decreasing budgets, many
libraries have to reduce their acquisition of books as well as their journal
subscriptions. Documents in electronic form can become more easily available
and widely used because the cost of digital storage and processing is going
down.

Evaluation of Digitization Work and Digital Library System :

A digital library may be evaluated from a number of perspectives, such as collaboration pattern, system, access and usability, user interfaces, information retrieval, content and domain, services, cost and overall benefits and impact.

An important issue under discussion across
various communities is the set of metrics to be used for evaluating digital
libraries. Selection of digital library metrics should be considered from both
system-oriented and user-oriented viewpoints.

Digital
libraries in Karnataka :

The
Department of Public libraries has put forth a request for proposal to open
digital libraries in the State.  The proposal
includes 1088 Android tablets and 544 desktop computers which are needed in
libraries. 

The
department is in receipt of technical bids and will open the commercial bids
after the end of model code of conduct (General elections 2019).  The facility will meet the requirement of 25
lakh members of public libraries and around 10 lakh students in government high
schools and pre-university colleges.

Pilot
project at other places in Karnataka :

A
pilot project is being set up in Haveri, Chamarajanagar and Tumakuru
districts.  The bids will be opened after
April 23 elections.

The
cloud based platform will be having digital rights management protected contents. 

The
library members will access the content by using their membership cards no. but
no member will delete, modify or copy the contents. The digital contents will
help those who appear for competitive examinations and to civil services exams.

Non-academic
books for all age groups will be available. 
Any authors can donate their digital books to the library.

Conclusion :

The information and communication technology has
changed the complexion of today’s libraries on a large scale and we the people are
in the middle of  information explosion
and information technology revolution leading to the emergence of electronic
information era.

Rapid advances in information processing,
storage and communication technologies have revolutionized the role of
worldwide libraries in information services to their users. As a result,
libraries are facing new challenges, new competitors, new demands, new expectations
and variety of information services from users tailored to their wants and
needs.

Libraries around the world have been working on
this daunting set of challenges for several years.  They have created many digital library
initiatives and projects, and have formed many  national schemes for jointly exploring key
issues.

As with most other technical developments in libraries over the years, one has to move forward in small, manageable, evolutionary steps, rather than in a rapid revolutionary manner.