Despite the government's digital push, more than half of the train tickets in India are purchased in cash -- thanks to the penalty on digital transactions, a survey revealed on Tuesday.
The findings said Indians still prefer the neighbourhood ticketing agent, who shun digital payments as they have to pay the bank charges themselves. It called for revisiting the rules and incentivising the agents.
The revelations are based on a countrywide survey of consumers and ticketing agents by RailYatri, a portal for railway related queries.
The survey found that while the larger agents have mechanisms for accepting digital payments their booking is nearly 100 per cent 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 Much of it, according to them, is due to the outdated ticketing rules and penalty imposed on them," it said.
"The study found that the unrealistic rule of imposing a cap on Payment Gateway (PG) charges at 0.7 per cent (for train ticket 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 per cent and 2 per cent depending on the provider, with most providers falling on the higher side.
"Agents, understandably, are unwilling to pay for the difference over 0.7 per cent to the payment banks from their own pocket," it said.
"Any instance of charging above 0.7 per cent, even if the money is finally kept by the bank, exposes the agent to steep fines and penalties. Hence they prefer cash transactions."
Pointing out the other reason the agents prefer cash transactions is that it leaves no trail. "Agents have seen the cost of train tickets increasing more than 80 per cent in the last five years and so have the cost of running their business."
However, their commission on train tickets has been capped at Rs 20 and Rs 40 with no increase in the last many years.
"This has forced several agents to continue with cash payments as it allows them to charge without a trail of actual amount paid. The consumer, unfortunately is the biggest loser in this," the survey said.
Manish Rathi, Co-founder and CEO of RailYatri, said nearly a crore train tickets every month are being booked in cash, adding that this doesn't go well with the well intended and ambitious plan of the government to move the nation towards digitisation.
"However, the good news is that this can be quickly fixed by revisiting the rules. These agents are an integral part of small businesses ecosystem and the system needs to incentivise them to accept and look for customers who are willing to pay digitally - thus fulfilling the Digital India dream," he said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)