IRCTC harbours fintech ambitions with new payment aggregator entity

With RBI's in-principle nod for IRCTC Payments, the rail PSU plans to process transactions in-house, cut costs, and expand payment services beyond railways

Indian Railway Catering and Tourism Corporation (IRCTC), India’s largest online ticketing platform, is gearing up to foray into the country’s fintech space.

 

The Reserve Bank of India (RBI) has already granted an in-principle nod to its wholly-owned arm, IRCTC Payments, to operate as a payments aggregator.

 

The move is significant for one reason — scale. With about 100 million registered users and more than 1.4 million transactions daily, IRCTC sits on a payments goldmine.

 

Until now, this volume has been routed through multiple third-party payment aggregators along with iPay; its own digital payments gateway.

 

A dedicated payment aggregator (PA) licence changes that equation — IRCTC can now process a chunk of the transactions in-house. It can also cut costs and monetise its payments infrastructure beyond the railways ecosystem.

 

“It looks like a value creation proposition. There is already so much volume on IRCTC. It can generate the same volume for a different line of business,” said a senior executive at a top payment aggregator. 

 

IRCTC also has its own digital payment gateway IRCTC i-Pay providing payments through modes such as internet banking, debit and credit cards, wallets and Unified Payments Interface (UPI), among others.

 

iPay posted a revenue of ₹126 crore in FY25, a 10 per cent growth from ₹115 crore in FY24.

 

The incorporation of a subsidiary in the form of IRCTC Payments comes at a time when it plans to expand the payment aggregation business ‘beyond IRCTC’. It expects full authorisation from RBI within one year.

 

“The vision behind establishing IRCTC Payments Limited is to extend payment aggregator services not only within IRCTC but also to a wider ecosystem. They include various government departments and private organisations,” it said in its annual report. IRCTC did not respond to Business Standard’s query.

 

“Eventually, I don't see any reason why IRCTC can't get into card issuance,” the source added.

 

IRCTC now getting its own PA licence also means it does not need to have third-party tie-ups for payments subject to how it scales its technology architecture.

 

“We’ll have to see if IRCTC is wanting to wean off its existing payment aggregator partners. It has historically worked with multiple partners for processing payments,” a second payments executive at a fintech company said.

 

Intensifying competition

 

In the past, large online merchants such as Zomato, too, had received RBI’s authorisation to operate as online payment aggregators.

 

The company, in 2024, surrendered its certificate of authorisation given significant competition in the payments space from major incumbents.

 

“Companies go for a licence just because it gives them the ability to handle funds in their escrow account. They also do it just because they only want to service their captive user base. But, that’s more of a money movement problem,” one of the people quoted above added.

 

A large marketplace like IRCTC may end up saving payment processing costs with an independent payment aggregation operation while expanding it for more clients.

 

“In this case, a public sector bank may work in the back-end to support IRCTC’s payment aggregation operation. The bank earns a float while IRCTC ends up saving costs,” another executive said.

 

However, fintechs said they are not concerned by the expanding operation of government-owned entities in the digital payments space.  It’s a technology game of wait-and-watch, they said.