Consumers dislike convenience fees for digital payment of services: Survey

People prefer making transactions online but regard service charges as unjustified and costly

Convenience charges for digital payments are inconvenient but won’t prompt people to move offline, three in four users told an online survey.

Digital service providers levy convenience charges on services like paying bills for electricity, broadband, or buying train and air tickets. IRCTC, the railways ticketing website, charges a convenience fee of up to 10 per cent.

LocalCircles, a community social media platform, found in the survey that 75 per cent of consumers pay convenience or service charges for online purchase of tickets or services.

Consumers disapprove of the charges but they are not shifting to offline payment mode. Only 9 percent of consumers said they would “buy the ticket or service at a physical counter” instead of paying a high convenience charge. As many as 15 per cent of survey participants said they happily pay the charges, for they don’t want to stand at counters.

Also Read: India leads the world in real-time digital payments, says PM Modi

Convenience or service charge is levied to cover internal information technology costs, as well as the cost businesses pay payment processing companies. The fee is typically a fixed amount or a percentage of the sale, which varies depending on companies.

“A common consumer complaint that LocalCircles has continued to receive in the last 12 months is that of high “convenience fee” levied by various service providers for digital transactions,” said the platform.

The survey received more than 30,000 responses from citizens across 344 districts of India. As many as 65 per cent of respondents were men while 35 per cent of respondents were women.

While the government has maintained its intent to boost digital payments in the country, IRCTC and state-owned power corporations charge fees on digital payments. As many as 93 per cent of participants said the government should eliminate convenience fees for online booking of services or tickets its departments and companies provide.

The study found that most digital service providers charge consumers convenience fees, which are not regulated. The final question asked consumers how the convenience charges for online ticketing and service purchases should be best kept in check. In response, 63 percent said it should “be defined as an absolute value with a maximum of INR 50”. As many as 30 percent want it to “be capped at 0.5 percent of the transaction value”.