68% cashless transactions: Digitisation on express mode in Indian Railways

Indian Railways seems to be among the fastest to embrace the government’s digitisation push. The national transporter, which already conducts 97% of its freight business in the cashless mode, has seen half of its passenger business going cashless, too. 

The Railways will soon launch two mobile applications enabling ticket reservation through all wallets and cards instead of only Rail Wallet, which was launched in April 2015. Currently, this facility is available only through the website of the Indian Railway Catering and Tourism Corporation (IRCTC), which gives around three dozen payment options, said Mohammad Jamshed, member traffic, Railway Board. 

The percentage of cashless transactions on reserved tickets zoomed from 58% to 67.8%, with the revenue jumping by Rs 20 crore a day from Rs 49 crore on November 8 to Rs 69 crore on January 1. 

To turn totally cashless, the Indian Railways will require 30,000 point-of-sales (PoS) machines — probably the highest number among all merchandise and service providers. The machines will be needed to cover all the stations, unreserved ticket counters, suburban ticket counters, parcel and catering offices. 
 

“We were using 72 PoS machines earlier. The number has gone up to 1,200... Cashless services are now being extended to even feature phones and also through automatic ticket vending machines,” said Jamshed. 

The Railways has tied up with State Bank of India for the PoS machines. Interestingly, connectivity for these machines may not be much of a problem since the Railways has a well-laid out telecommunication system. Besides, RailTel has been asked to provide WiFi facilities in booking counters and stations, which are in far-flung areas, he said. 

Cashless transactions on Passenger Reservation System jumped from Rs 49 crore daily to Rs 69 crore on January 1, 2017. 

Much to the surprise of Railways officials, in a span of 50 days since the demonetisation of old Rs 500 and Rs 1,000 notes, the share of cashless transactions in the passenger segment zoomed from 38% to 50.5%; it is still increasing on a daily basis. 

“The primary reason for this increase was the sops that the government had announced for cashless booking of railway tickets,” Jamshed noted. By January 15, the IRCTC Rail Connect application on mobile will have multiple payment options. 

Similar facility will be offered through Unreserved Ticketing System (UTS) on Mobile. Till now, UTS on Mobile was offered only on suburban services; it will now be extended to all unreserved ticketing.

Among the discounts that the Suresh Prabhu-led ministry had lined up for online transactions, the highlight was the decision not to levy service charge for tickets booked via the IRCTC website. This decision will lead to a revenue loss of about Rs 500 crore annually for the Railways, for which the ministry has asked for compensation from the Union government. IRCTC shares half its service charge earnings with the Railways. The service charge waiver, however, expires on March 31, 2017.

The Railways is also giving a 5% discount on payments made online for availing services such as e-catering and online booking of retiring rooms. Besides, insurance cover of Rs 10-lakh is given to passengers booking tickets online, which might also lead to a revenue loss of around Rs 30 crore for the Railways annually. 
 

As of now, 99.9% of the payments that Railways make, including salaries and payments to contractors, are cashless. In the freight segment, penalties and demurrage charges are paid in cash.