When a customer uses a different payment method than cash, cheque, or ACH, the company will charge a convenience fee.
What is the IRCTC’s convenience fee or service charge?
It is the fee that IRCTC, the only online railway ticketing service authorized by Indian Railways, charges users who purchase tickets online. It is comparable to what customers pay when they book airline tickets online, with the exception that IRCTC enjoys a monopoly in the Rail industry. Customers who choose to book online are limited to using IRCTC or other online platforms that have agreements with IRCTC.
IRCTC charges a convenience fee for each ticket you purchase through its portal. Approximately 80% of all reserved tickets in the railway industry are purchased online via the IRCTC website.
Who determines if a service charge is necessary and how much should be charged?
It has traditionally been up to the railway ministry, which serves as the IRCTC’s administrative ministry, to determine whether and how much of a convenience fee should be charged.
However, according to IRCTC’s most recent annual report for the fiscal year 2021, the Ministry of Railways had given the management of IRCTC permission to decide whether to impose or reinstate the convenience fee and how much to charge.
What was the amount of the service fee per ticket?
Depending on whether you are traveling in AC or Non-AC class, the convenience fee amount that IRCTC levies differ across ticket types. IRCTC levies a convenience fee of Rs 15 for non-AC tickets and Rs 30 for AC tickets, both excluding GST.
Since it started charging convenience fees again in September 2019, this has been the rate. IRCTC offers a reduction on the convenience charge for individuals who use the government’s Unified Payment Interface (UPI), BHIM, charging customers only Rs 10 for non-AC classes and Rs 20 for AC classes. These costs do not include GST
The largest contributor to profits and a significant source of income for IRCTC is the convenience fee applied to online tickets.
Internet ticketing was the only industry to report profits (of Rs 353.22 crore) in fiscal 2021, the year that COVID-19 disrupted passenger train operations, with other businesses like catering, rail neer (IRCTC-branded water), tourism, and others reporting losses.
The revenues from online ticketing reached Rs 492.68 crore in fiscal 2020, the year that IRCTC commenced charging convenience fees in the middle of the year. This is more than 4.5 times the next profitable industry, catering.