Train ticket booking through Paytm, MakeMyTrip to get costlier

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Kriti
Business news author and curator at The Indian Wire.

Travellers using 3rd-party apps such as MakeMyTrip, Cleartrip or Paytm to book train tickets will soon have to start paying more, as the e-ticketing department of the Indian Railway Catering and Tourism Corporation (IRCTC) is going to start charging ₹12 plus taxes on every ticket booked through these 3rd-party service providers. This means that passengers who want to buy cheaper tickets will have to book them from the IRCTC website, as opposed to booking via other platforms to avail good deals and offers.

Earlier, the IRCTC only used to charge a flat annual maintenance fee, but now along with that, it has decided to charge an extra amount of ₹12 plus taxes on every ticket booking. This is part of a strategy to open a new revenue stream ahead of its proposed initial public offering (IPO). In addition to this, the IRCTC has also said that it will charge ₹5 for display of advertisements and ₹15 for cashback offers if payments are made through e-wallets. Also, in case of cross-selling of any other product from any other company, an additional charge of ₹25 will apply.

Understandably, service providers are unhappy with this announcement. According to one of the service providers, railway ticket booking has always been done at no profits, in a revenue-neutral model, and since the expenditure of the fees paid to the payment gateway is more than the fees charged to the customer, if the fee is not delegated to the customer, then railway ticket booking will be done at losses – a revenue-negative model. Hiking the fees is also not an option, as this would make them uncompetitive, as IRCTC would still be offering the tickets at the same price on its own website.

There is also a stark contrast of the IRCTC from the airlines. While service providers get commissions for ticket sales, here IRCTC is charging them for selling their tickets.

However, what is surprising is that in today’s day and age, the cheapest way to buy a railway ticket is offline, as none of the extra charges are applicable.

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