Charges on Credit Card Transaction by Indian Railways
This is a discussion on Charges on Credit Card Transaction by Indian Railways within the Railways forums, part of the Transportation category; Respected Members, Recently I bought a Railway Ticket (for outstation) on Credit Card. I was surprised to see that additional ...
- 02-04-2009, 05:36 PM #1Unregistered Guest
Charges on Credit Card Transaction by Indian Railways
Recently I bought a Railway Ticket (for outstation) on Credit Card. I was surprised to see that additional Rs.30/- was charged towards Credit Card transaction and that too was added on Credit Card Charge Charge Slip and not on Railway Ticket. Later I came to knew that for every Credit Card transction, they charge Rs.30/-. I have some question in my mind about this:
1. Why should we pay additional Rs.30/- towards Credt Card Transaction Charge to Railways?
In addtion to this Credit Card Companies/ Bank charges Railways Transaction Charge of 2.5% separately.
2. Why Railways do not specify this additional Transaction Charge on Railway Ticket? (It mentions Credit Card number on the Railway Ticket!!!)
3.Is it a crime to purchase a ticket on Credit Card bcoz of which Railways levy a Transaction Charge (or call it 'Fine') on Credit Card Transaction?
4. How much railways must be collecting the total amount in a year by way of charging such Credit Card Transaction Fee?
5. I am very doubtful about this additional income of Railways as this additional charge is not shown on Railway tickets but only on charge slip.
Chetan Bordawekar, Mumbai.
- 02-04-2009, 05:37 PM #2Unregistered Guest
As I think, it is not the fees which Railways charge extra. Instead, every Credit card company charges some fees from their franchised outlets for every transaction but Indian Railways must not be paying the same to them. Therefore the Credit card company is charging the buyer.
- 02-04-2009, 05:38 PM #3Unregistered Guest
You are absolutely right , but these charges are actually "valid" !!!!!
India is the only country which charges more than 45%p.a. on late payment of credit card bills !!!
The only country in the world which charges more is Indonesia ....
This has something to do with RBI and the banking penetration in the country . Not many people use credit cards and hence all cost incurred is passed on to consumer.
In the west, they charge very less amt for non-payment AND 0% for such transactions as described by u [ maybe due to the fact that everyone is holding 2-3 credit cards in US] .........
Unfortunate as it is ...consumer will have to bear the brunt of this as credit is very expensive in India . risks are also high .
maybe it will reduce once people start using credit cards very often ...
thats all i can add.
- 02-04-2009, 05:39 PM #4Unregistered Guest
The set-up of doing online ticketing is an expensive proposition as the railways does not have very good systems for this . Its also expensive for the banks as they have to validate each and every transaction . Setting up infrastructure for credit card transaction is an expensive proposition as , setting up of single ATM costs around 10lacs . please multiply it with the number of ATMS in tocuntry for ICICI and its an expense that takes a lot of time to recover.
Banks can recover costs only if there is huge number of people doing credit card transactions...approximately, if 20% or so of the entire indian population uses credit card .
Its even possible to give credit cards to farm laborers and construction workers [ 20% of indian population fall into this bracker called farm employment & Non-farm employment]ONLY if their wages are recorded thru a bank.
There was an increase of 200% in credit card transactions via the railways website . And it will increase as people who can pay the 30-40 Rs extra . Try to book it from a travel-agent and he will charge u around 50-60 Rs more for the same ticket.....
so actually , people who are approaching travel agents will book from creditcard/website and save money and time ...
The credit policy is culprit and has to be fine-tuned by finance ministry or RBI ...
People who are doing creditcard transactions FOR THE FIRST TIME are the ones who complain as credit card is freely given . Conusmer expects the charges also to be free.
While taking a credit card from a bank , consumer must read and understand the charges
- 02-04-2009, 05:39 PM #5Unregistered Guest
This transaction charges not go to railway that amount
charges by credit card company for providing the service to you. This
income not go for railways.
- 02-04-2009, 05:40 PM #6Unregistered Guest
If I were Indian Railways decision maker, I shall actually promote use of online
I wud have saved the cotly manpower required along with infrastructure costs
when a man /woman types the info manually.
I would have actually saved millions in a year by way of online booking and
give uses some concession. See telephone companies are today giving 1%
those who opt for ECS as means of payment.
IT is to help us and not the otherway, by placing burden on users
- 02-04-2009, 05:40 PM #7Unregistered Guest
I am bit confused. Does Indian Railways charge additional charge of Rs. 30/ticket for credit card transaction done at the railways reservation counter in addition to transaction charges by the credit card company. If so, that's not correct. Railways must incurring cost of time and money counting and tallying these notes at the end of the business day. I am not sure whether
banks where railways will ultimately deposit this cash will charge railways for cash transactions. Why institutions/shops/hospitals in India discourage use of creditcard by having some sorts of charges is beyond me.
I know that there is charge of Rs. 40/60 depending on the class for bookings done on-line through icrtc. Some banks do not charge the transaction charge if you use the debit card. But still you will have to pay railways Rs. 40/60 per ticket. I think the reason for this is additional 'service' of sending the tickets to (the customer has to foot Courier charges).
- 02-05-2010, 03:00 PM #8Unregistered Guest
The service charge or transaction charge is charged by the bank. This charge is charged to the merchant establishment for the service provided by the bank. Generally it is borne by the merchant. But here in case of Railway Tickets or for the matter even petrol pumps pass it on to the end user as the cost is already subsidized and is legal.
There are a few merchants who charge extra for usage of credit cards which is illegal and can be raised with the particular bank authorities.
- 12-16-2011, 10:24 AM #9Junior Member
- Join Date
- Dec 2011
Service Chares by Bank on Raiway ticket booking
As any charges to be charged by the intermediateries for booking the tickets requires an agreement between intermediateries and railway authorities. It is suggested that railway should published that agreement details and print it on the ticket so that passangers can know that these are not any extra charges charged by banks. If banks are chargeing for their services than it should be published by the railway authorities that no commission / brokerage is payable to service providers, as a result of which banks can collect their administrative / service charges from the passangers.
This is required for those passangers, who has to submit proof of their travelling for claiming reimbursement from their companies under Leave Trave Concession Scheme, which includes reservation charges, booking charges etc. In absence of any arrangement companies do not pay these booking expenses charged by the bank.
Reserve bank and Railway Authorities are requested to look into this matter and interven to get reimbursement of booking expenses through credit cards.
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