IRCTC is strategically expanding its payments subsidiary, IRCTC Payments, to become a major payment aggregator, targeting government clients and aiming to process an astounding ₹1 trillion annually.
Key Points
- IRCTC Payments, a wholly owned IRTC subsidiary, received in-principle RBI approval last year to become a payment aggregator and is building its capabilities.
- The company aims to expand its payment processing to approximately ₹1 trillion annually by capturing its entire ticketing GMV and targeting government clients.
- IRCTC Payments plans to become the largest payment aggregation platform for government clients, including municipalities, GST payments, treasuries, and utilities.
- Currently, IRCTC's i-Pay gateway processes about 20% of platform GMV (₹13,000 crore), with plans to capture the entire ticketing GMV exceeding ₹70,000 crore.
- Competitors express caution regarding IRCTC Payments' pricing, technology agility, and talent depth, noting the razor-thin margins in the payments business.
Indian Railway Catering and Tourism Corporation (IRCTC) is expanding its payments arm to handle transactions across its ticketing platform and tap government clients, a move that could scale its annual payment processing to around ₹1 trillion, sources said.
IRCTC Payments, a wholly owned subsidiary of the company, received the Reserve Bank of India's in-principle nod to become a payment aggregator last year and is now building its capabilities.
Building Digital Payment Capabilities
The company has onboarded a technology service provider (TSP) to build its digital payments stack and provide technical support to scale operations, said a person with knowledge of the matter.
The platform continues to work with multiple processors even as it handles over 1.5 million ticket bookings daily.
Industry sources said these partnerships remain in place despite the in-house aggregation arm, which has yet to gain meaningful traction.
":Nobody has a monopoly in the government clients yet... Railways is the (government's) one monopoly utility for more than 1.4 billion Indians. IRCTC having a payments subsidiary, which is for profit, has an edge there," a source said.
IRCTC didn’t respond to an email seeking comment. The payments arm is still awaiting full RBI authorisation.
Targeting Government and Ticketing GMV
Currently, IRCTC's i-Pay gateway processes about 20 per cent of platform GMV -- around ₹13,000 crore. The unit plans to capture the entire ticketing GMV, exceeding ₹70,000 crore.
Targeting government clients -- from municipalities and GST payments to treasuries and utilities -- is expected to broaden its payments footprint beyond rail bookings, a second person said.
"IRCTC Payments wants to be the largest payment aggregation platform for government clients in the future. The idea is to have a strong enough platform for clients before transitioning away from current payments partners," the source added.
The company's FY25 annual report, too, has noted plans to process transactions for its platform, government departments and private firms.
Competitive Landscape and Challenges
Competitors remain cautious. Executives cited concerns over pricing, technology agility and talent depth.
"They have played fair and have continued to have other payment processing partners. As of now, we don't think IRCTC Payments will get preference over existing companies in any state-related RFPs (Request for Proposal). As long as they do not have any pricing advantage, it does not matter much," a senior industry executive said.
Key payment aggregators include BillDesk, Cashfree Payments, PayU, PhonePe and Razorpay.
The real test of IRCTC Payments' operations would boil down to the ability to process digital transactions while maintaining margins and expanding into new clients.
"As of the biggest commerce platforms, the question is: Can they process transactions at the cost of what their payment partners currently do for them. Payments is a razor-thin margin business," the fourth executive said.
Feature Presentation: Rajesh Alva/Rediff
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