Currently, the IRCTC website
allows card-based payments only for cardholders of Indian Overseas
Bank, Canara Bank, United Bank of India, Indian Bank, Central Bank of India,
HDFC Bank and Axis Bank.
A squabble between banks and
Indian Railway Catering and Tourism Corporation (IRCTC) over fees has resulted
in the latter disallowing a number of lenders from using its payment gateway
for debit cards. Bankers FE spoke to explained that IRCTC had stopped them from
operating on the website because they were unwilling to share a portion of the
convenience fees earned on customer transactions.
An email sent to IRCTC requesting
a comment remained unanswered. The Indian Railways subsidiary’s website is
among the most busy portals in the country. Currently, the IRCTC website allows
card-based payments only for cardholders of Indian Overseas Bank, Canara Bank,
United Bank of India, Indian Bank, Central Bank of India, HDFC Bank and Axis
Bank. Earlier this year, IRCTC had asked banks to share with it half the
convenience fee that lenders recover from card transactions on the website. The
Indian Banks’ Association (IBA) is understood to have been discussing the issue
with IRCTC and the Indian Railways with a view to resolving the matter.
Post-demonetisation, IRCTC had
waived the convenience fee of Rs 20 it was charging customers. “Every day we
are losing 50,000 transactions,” a senior executive with State Bank of India
(SBI) said on condition of anonymity. “Normally, the merchant pays the
acquiring bank. But, since IRCTC does not pay us, we were recovering our costs
from customers and that is how it had been all these years.” Merchants who use
the services of a bank for accepting card-based payments typically pay the bank
a charge, referred to as the merchant discount rate (MDR). Banks that have
refused to comply with IRCTC’s demand say they are doing so because it violates
the principles of the merchant-acquiring business.
