Nearly 50% train tickets still purchased in cash: RailYatri survey

Amid the push by Modi govt on digital payments more than half of train tickets are purchased in cash

Amid the push by the government on digital payments, a study by online portal RailYatri has found that more than half of the train tickets in India are purchased in cash.

"And this is not because the train travellers necessarily prefer it that way, but the sale of reserved train tickets through authorised agents (contributing an estimated half of reserved ticket sales) continues to be in cash. The primary cause for this is the dis-incentive eco-system which rewards cash while penalising online transactions," Railyatri said in its report based on a countrywide survey of consumers and ticketing agents.

The study found that the rule of imposing a cap on Payment Gateway (PG) charges at 0.7% (for train tickets prices less than Rs 2,000) is completely out of tune with the average bank charges, which the agents have to pay. According to RailYatri, the typical PG charges vary between 1.5% to 2% depending on the provider, with most providers falling on the higher side. Agents, understandably, are unwilling to pay for the difference over 0.7% to the payment banks from their own pocket. Any instance of charging above 0.7%, even if the money is finally kept by the bank, exposes the agent to steep fines and penalties. Hence, they prefer for cash.

An estimated 65,000 of these small businesses are spreadacross the country. "A significant consumer section of India depends on managedservices, especially when the complexity of their need is high. And because ofthe supply-demand mismatch & other uncertainties around train travel, ticket booking falls in this bucket. This has in turn led to the popularity oftrain ticket booking through these mom-and-pop travel agents." says Manish Rathi, co-founder and chief executive, RailYatri.

Based on the survey, it was found that while the larger agents have mechanisms of accepting digital payments, their train ticket booking is nearly 100% in cash. While consumers have increasingly shown an inclination towards digital payment, the travel agents still shun from accepting these. Much of it, according to them, is due to the outdated ticketing rules and penalty imposed on them.

"These agents have seen the cost of train tickets increasing more than 80% in the last 5 years and so have the cost of running their business. However, their commission on train tickets have been capped to Rs 20/40 with no increase in the last many years," it added. This has forced several agents to continue with cash payments as it allows them to charge without a trail of the actual amount paid.