If you transact online—be it to book tickets or to pay bills—chances are that you have paid an extra amount as convenience fee. This charge is levied by the channel that allows you to pay for a product or service using its platform or payment mode.
WHEN DOES IT APPLY?
Usually, convenience fee is applicable on small-ticket purchases and services. For instance, if you book a movie ticket, flight ticket, pay an electricity bill or school fee online, a convenience fee will be levied on the transaction. Convenience fee can also be referred to as Internet handling fee.
Sometimes, online portals club convenience fee and service tax together without giving the break up. For most websites, convenience fee is one of the revenue models.
The idea behind convenience fee is to charge for the ‘privilege’ you get of using alternative payment options. It is also to cover the payment processing charges and what payment gateways have to pay banks for online transactions. The fee is usually non-refundable if you cancel the product, say, tickets or clothes you bought.
