The Indian Railway Catering and Tourism Corporation has banned several banks from using its payment gateway for debit cards, the Financial Express reported on Friday. The banks were barred because they refused to share a portion of the convenience fee they charge customers through the railway portal.
However, the Ministry of Railways denied the charges, and said that debit cards of all banks were accepted through the seven payment gateways on its website.
Since May, IRCTC and the banks have been trying to come to an arrangement over the distribution of fees on online booking of rail tickets. After the demonetisation drive in November 2016, IRCTC – a subsidiary of the Indian Railways – had waived the Rs 20 convenience fee it charged customers who buy tickets online. However, it expected banks to share a part of the convenience fee that they charge customers.
Banks, however, have claimed that government orders after demonetisation mandate public sector units, including IRCTC, to bear the cost of providing online payments to customers, called a Merchant Discount Rate. The Indian Banks Association is in talks with IRCTC and Indian Railways to resolve the situation.
For now, the IRCTC website allows card payments only for the Indian Overseas Bank, Canara Bank, United Bank of India, Indian Bank, Central Bank of India, HDFC Bank and Axis Bank, the report added.
(Corrections and clarification: This article was earlier published under the headline: ‘IRCTC bars banks from using its payment gateway for debit card transactions’, and has now been amended to reflect the Ministry of Railways’ response.)
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