As the Indian digital payments touch $200 Bn mark, the segment has started gathering the attention of traditional players to test waters. As per reports, Indian Railways’ subsidiary IRCTC is looking to launch its own digital payment gateway.
Speaking to Inc42, a senior officer of Indian Railways confirmed the development; he, however, could not confirm the deadline for the digital payments gateway launch.
As claimed, the platform sold 573K e-tickets daily in 2016-17.
Why Is IRCTC Looking For Its Own Payment Gateway?
In a report, a few of the LiveMint sources shared that IRCTC is looking for additional revenues and reduce dependency on third-party payment services providers.
At present, firms like Razorpay, Mobikwik and Paytm lead IRCTC’s railway ticket booking transactions through their gateways. The companies have to pay “a one-time licensing fee to integrate with IRCTC’s website and mobile app and in return share revenues with IRCTC on every transaction that goes through them.”
The licensing fee ranges from $115.2K (INR 75 Lakh) to $153.68K (INR 1 Cr).
The person cited informed that “Other than the revenues, the biggest motivation for these payment firms to work with IRCTC is to get access to an instant high volume of transactions.”
In February, Razorpay partnered with IRCTC to enable UPI-based transactions on the platform. IRCTC has been processing more than 1.2 Mn tickets a month.
What Are The Plans Ahead?
For this, the company is planning to start a pilot project for its in-house payment gateway, which is being initially called ‘ipay’, over the next 4-8 weeks. The gateway will be rolled out in phases after testing, but until then ipay will be one of the payment gateways the e-ticketing platform uses for its online transactions.
As IRCTC completed its PCI-DSS (Payment Card Industry Data Security Standard) compliance last month, it “plans to offer its payment gateway services to other state and central departments post the integration with the online ticketing platform, e-catering portal and tourism platform,” as per media reports.
The state and central departments could include Life Insurance Corp. of India and Employees Provident Fund Organisation.
On the payment gateway project, e-ticketing platform is working with “MMAD Communications to provide technology and back-end support.” Based in Delhi and Bengaluru, MMAD Communications will act as a technology partner for IRCTC.
An email query sent to MMAD Communications’ cofounder Gopal Krishna didn’t elicit a response till the time of publication.
Further, the platform has also been partnering with various startups to enable better services on its platform and in railways. Recently, it has partnered with Ola to enable cab bookings from its platform for its millions of passengers. E-catering has also been continuously expanded on the IRCTC platform.
Being a major client to most of the digital payment companies, the effect of IRCTC bringing its own digital payment gateway will be major considering the large number of e-ticketing transactions the platform provides to these companies.