Consumers dislike convenience fees for digital payment for services: survey
Convenience fees for digital payments are inconvenient but don’t entice people to disconnect, three out of four users said in an online survey.
Digital service providers charge convenience fees on services such as paying electricity bills, broadband or buying train and plane tickets. IRCTC, the railroad’s ticketing website, charges a convenience fee of up to 10%.
LocalCircles, a social media community platform, found in the survey that 75% of consumers pay a convenience or service fee when buying tickets or services online.
Consumers frown on fees, but they don’t switch to offline payment. Only 9% of consumers said they would “purchase the ticket or service at a physical counter” instead of paying high convenience fees. As many as 15 percent of survey participants said they gladly paid the fees, as they did not want to stand at the counters.
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Convenience or service fees are levied to cover internal information technology costs, as well as costs that businesses pay to payment processors. The fee is usually a fixed amount or a percentage of the sale, which varies by company.
“A common consumer complaint that LocalCircles has continued to receive over the past 12 months is high ‘convenience fees’ charged by various service providers for digital transactions,” the platform said.
The survey received over 30,000 responses from citizens in 344 districts of India. No less than 65% of the respondents were men while 35% of the respondents were women.
While the government has maintained its intention to boost digital payments in the country, the IRCTC and state power companies are charging fees on digital payments. As many as 93% of participants said the government should eliminate convenience fees for online booking of services or tickets provided by its departments and businesses.
The study found that most digital service providers charge consumers a convenience fee, which is not regulated. The final question asked consumers how convenience fees for online ticketing and service purchases should be better controlled. In response, 63% said it should “be set as an absolute value with a maximum of INR 50”. No less than 30% want it “to be capped at 0.5% of the value of the transaction”.