Heavy convenience fees blocking cashless India, say 3 of 4 Indian consumers

New Delhi, Sep 12 (IANS) Three in four consumers say excessive convenience fees for digital payments are coming in the way of cashless India, a report showed on Monday.

About 77 per cent say they are being charged convenience fees for the majority of tickets/services procured online, according to the report by community social media platform LocalCircles.

About 93 per cent want government departments and services like IRCTC (NS:) to stop charging convenience fees. They also want caps on convenience fees charged for online tickets/service transactions.

IRCTC charges a convenience fee of up to 10 per cent.

A convenience fee is a charge that consumers end up paying to digital service providers for the service or the convenience they offer, which could be for payment of electricity, broadband, or railway or air tickets.

Recently, the RBI made some comments on UPI charging a transaction fee in future which was later clarified by the government, explicitly stating that UPI transactions will continue to remain free and platforms need to find other ways to monitise.

The survey revealed that 38 per cent customers said they have been charged “Convenience fee for all services purchased online”, 39 per cent paid “convenience fee for majority of the services purchased online”, and 18 per cent were “charged convenience fee only for a few services purchased online”.

There were only 2 per cent of consumers who have “never been charged a convenience fee for services procured online”, while 3 per cent couldn’t say.

About 75 per cent consumers pay convenience or service charges for online purchase of tickets or services though they disapprove of it.

Most consumers want convenience or service charges to have an upper limit as absolute value of Rs 50 or 0.5 per cent of transaction value.

“Currently, there are no rules to regulate ‘convenience fee’ in India, and most digital service providers continue to charge consumers such fees,” said the report.

Consumers say that most service providers add convenience fees just before checking out or making the final payment and not share it upfront.

Undoubtedly, India has seen exponential growth in digital payments and pandemic has accelerated the adoption of digital payments further.

“However, there is still a long way to go. In most tier 2, 3 & 4 towns, digital payments are still not the primary mechanism for payment; it is cash,” the report mentioned.



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