Home >industry >Cash-on-delivery rail tickets on IRCTC radar

New Delhi: Indian Railway Catering and Tourism Corporation (IRCTC), the nation’s largest e-ticketing website, will for the first time offer the cash-on-delivery option for buying railway tickets, according to two people close to the development.

The service, which is expected to help IRCTC cut the high transaction failure rate on its website and reduce traveller’s dependence on agents, will be made available through a partnership with BookMyTrain.com, one of the two people said, declining to be identified.

The website is expected to go live in the next four to six weeks, he said. It will be the first website to accept cash on delivery for railway tickets. Rivals Makemytrip, Yatra and Cleartrip allow customers to book railway tickets online but do not accept cash on delivery.

The domain name BookMyTrain.com has been registered by Noida-based Anduril Technologies Pvt. Ltd.

According to the company’s website, Anduril was incubated at Amity Innovation Incubator, an initiative by Amity Business School, and founded by Pooja Chauhan and Anurag Bajpai.

Anduril did not respond to email queries.

“We have already integrated our systems with the third-party platform and the pilot should be live soon," said an IRCTC executive on condition of anonymity.

According to him, Anduril will be responsible for the delivery of tickets, cash management and cancellations.

The service will be available in more than 100 cities initially.

“Cash on delivery helps widen your customer base, and this move will help IRCTC to reach out to tier-ii and tier-iii and the rural markets where consumers do not have access to netbanking or credit or debit cards," said Saurabh Srivastava, director at consulting firm PricewaterhouseCoopers.

Currently, 42% of people buying tickets online use Internet banking, 24% use credit or debit cards, and the rest use prepaid cash cards or other mediums, according to IRCTC.

Delivering tickets at the consumer’s doorstep by offering the cash-on-delivery option will help consumers without Internet banking and credit cards to book tickets online without depending on travel agents.

It will also help reduce traffic on the IRCTC website as the time taken per transaction will be cut, bringing down the high transaction failure rate on the website.

Till March, the website witnessed a transaction failure rate of close to 30% because of poor Internet connectivity, long process of online payments, and inefficiencies in the system because of heavy traffic on the website.

With the launch of the IRCTC’s next-generation e-ticketing system, which has raised the booking capacity to over 7,200 tickets per minute from the 2,000 tickets per minute earlier, the ticket-purchasing experience is expected to improve.

“At present, we book around 10,000 tickets online per minute, which is beyond our expectations. When we launched this service, our target was to book 7,200 tickets per minute. With over 200,000 agents booking through IRCTC, we are gearing up for higher ticketing per minute," Rajni Hasija, group general manager—information technology at IRCTC, said at the fifth Travel and Tourism Summit organized by The Internet and Mobile Association of India (IAMAI).

IRCTC booked nearly half of the total reserved tickets sold in the year ended March 2013.

It sold around 140.6 million e-tickets through its website that year.

“The strategy would be to increase the adoption of online ticketing. However, they will have to figure out the right economic model for the business to make sense, given there will be cost of delivering and payment collection," said Ashvin Vellody, partner-management consulting, KPMG India.

The railway-ticketing business has thin margins, and with the expenses related to the cost of delivery, the cost of bearing cancellations and the risks involved like leakage in payment collection system, it could be a tricky business which needs to be managed well, industry experts say.

“The move is surprising for a company like IRCTC, which started out by only accepting credit cards and single-handedly led the online payment revolution in the country," said Subho Ray, president of IAMAI.

“It is a reverse cycle for them to go from credit cards to debit cards, netbanking, prepaid cash cards and then COD," he said, adding that the move could be aimed to get rid of travel agents.

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