Convenience fee became nothing less of a headache for IRCTC in the recent past. The Railway ministry’s diktat to IRCTC to share half of the convenience fee caused the shares of the ticketing platform to slide by more than 25 percent.
What is a convenience fee? All you need to know
Convenience fee is a fixed amount which consumers have to bear as they do their bookings on the portal of an aggregator or its app. Read further to know more on this
Fortunately, the matter was resolved soon after when the ministry rolled back its decision, helping the stock prices also to recover. But until then, only a few investors and consumers could discern the significance of a small monetary fee that appears innocuous to most consumers.
Whether you are booking your flights tickets for your forthcoming vacation, or making a hotel reservation for the next trip to Maldives with friends – convenience fee appears on your phone screen as a pop-up, justifying the small but unavoidable difference between the price you thought you would pay, and what you actually end up paying.
What exactly is convenience fee?
Convenience fee is a direct source of income for online transactions for aggregators, some of whom only have this as their only source of income. The other source of revenue for these portals include cancellation charges, cross-selling, rescheduling charges etc.
On the face of it, it is an extra charge the consumers have to pay for doing the bookings from the comforts of their home. The service providers argue that this convenience fee is a reasonable amount charged from the customers for putting a strong infrastructure in place, and for covering the administrative charges.
Convenience fee is a fixed fee that is charged irrespective of the amount of tickets booked. Sometimes, however, it increases with the type of booking, for instance a higher fee for international flights, instead of domestic ones.
For instance, IRCTC charges ₹15 for non-AC tickets and ₹30 for AC tickets. For the bookings done on UPI platforms, the convenience fee is generally lower.
At the same time, travel portals charge a convenience fee, which could be somewhere around ₹300- ₹500 for a flight ticket to one side.
As a matter of fact, consumers have no choice when it comes to paying convenience fees. They are made to pay whenever they have to make a booking. However, there are some platforms such as EaseMyTrip which prevent the payment of convenience fees directly from the consumers.
As we understand, convenience fee is a necessary amount, which the consumers have to pay to be able to avail the services of booking portal or aggregator.