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Indian Railways to offer attractive incentives to passengers making digital payments through card or Paytm
To boost digital transactions by promoting cashless economy in India, Indian Railways is all set to offer incentives to passengers who will pay for their tickets using cashless mediums.

"We are trying to minimise the use of cash as much as possible. So, several incentives are being rolled out for passengers," Mohd Jamshed, member-traffic, Rail Board, was quoted as saying by The Economic Times.

He further added, "The financial burden of the incentives given is being borne by us".

At present, a 0.5 per cent discount is being given by the Indian Railways on purchase of the monthly travel pass, if the payment is made through debit or credit cards.

Similarly, the railways is now planning to introduce discounts and other attractive incentives for cashless payments, as reported by ET. The same facility is likely to be extended to unreserved category as well.

"Earlier, most of our cashless transactions were through IRCTC. Though that is still the case, we have also started accepting cards and BHIM at unreserved ticket counters. Railways is benefiting from it as we are reducing the cost of handling cash," Jamshed said.

In order to implement such initiatives, the railways has urged banks to waive-off or sharply minimise the charges on digital payments for rail tickets.

Indian Railways is now targeting to go cashless for 85-90 per cent of total payments. It earns Rs 48,000 crore as revenue per year from passengers and 95 per cent of its transactions in the freight segment are made through cashless mediums.

On the other hand, the Indian Railways has been facing a revenue loss of Rs 400 crore annually, since it waived off service charge on online tickets bought through Indian Railway Catering and Tourism Corporation (IRCTC). Currently, 60 per cent of the total yearly transactions are made through electronic payment modes which have risen by over 20 per cent since demonetisation.

According to an earlier report, the Central government was also considering the removal of Merchant Discount Rate (MDR) charge applicable on payments via debit or credit cards. If such levy is reduced or written-off on card payments, then it would definitely make train fares cheaper.

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