IRCTC Does $102 Million In Online Transactions In August; Payment Trends; HDFC, ICICI, Cash Cards Significant

By Nikhil Pahwa ⋅ September 8, 2008 ⋅ 4 Comments

The Indian Railway Catering & Tourism Corporation (IRCTC), which manages the online rail ticketing for the Indian Railways, handled around $102 Million (Rs. 453.51 crores) of online transactions in August 2008, up 4.87 percent from $97.73 Million (Rs. 432.44 crores) in July.

What is particularly surprising - shocking, in fact - is that around 30 percent of this amount is refunded/transactions are unsuccessful - $31.75 Million (Rs. 140.5 crores) in August, and $29 Million (Rs. 132 crores) in July.

Other trends

– The average transaction amount (view) is Rs. 931. For Credit Cards, it is Rs. 1027; Rs. 820 for Netbanking; the average for Cash Card transactions varies between 889 and 926.
– Credit Cards account for 41 percent of successful transactions, Netbanking 31 percent, and Cash Cards 26 percent
– Banks account for 76 percent of total transactions, 72 percent of amount transacted
– Around 29 percent of transactions are unsuccessful
– Net Banking is the least successful transaction method - with 32-35 percent failure rate
– On an average, the Rupee amount for unsuccessful transactions is higher than that of successful transactions
– The average time taken for a refund - 2.68 days in August, 2.58 days in July (note: data for some gateways not available)

More Cash Card Trends And Charts for ICICI Bank, HDFC Bank, SBI, ITZ Cash Card and Done Card - (more…)

4 Comments Permalink
Payment Systems, Travel


Naveen Surya, MD Of Itz Cash On KYC Norms, GPRS vs SMS; Itz Cash Numbers

By Nikhil Pahwa ⋅ August 14, 2008 ⋅ 3 Comments

Cash Cards are micro payment instruments that are being used extensively for making payments on the Internet, and on the mobile. The issue that Cash Cards do not follow Know Your Customer norms has been raised in the media and at conferences; we took this up with Naveen Surya, MD of Itz Cash, an Essel (Zee) Group company, which has received $10 Million in funding from Matrix Partners earlier this year. We also got some interesting inputs on consumer behavior:

On the allegation that Cash Cards do not follow Know-Your-Customer (KYC) norms
It is a myth that our kind of product doesn’t have KYC. It is true that when we issue the card, the KYC doesn’t exist. But the moment you do a transaction, the indirect access of KYC is fully available. With our card, the transactions that you can do, and where you can do them - whether on mobile phone, Internet or with a particular venodor.
What if there’s an arms dealer based in Bangalore, and there’s a buyer based in Delhi, who know each other. On an online marketplace the dealer shows that a mobile phone is being sold. The money changes hands using cash card payment, and instead of sending the mobile phone, arms are sent. The money trail cannot be tracked…
In our case, there is a transaction limit of Rs. 20,000, so hopefully he cannot buy the arms. Technically, in cash, you can do a transaction of Rs. 49,990 without giving a pan number, without KYC requirements. The other thing is, the KYC of the person who is selling is always available with us. All the money is paid to him, always in his bank account. Anyway, this can happen in any mode - the crime can be committed using a credit card or a bank account.
Isn’t a cash card like a Mobile Wallet (and hence not legal)?
The service looks similar, but there are clear and distinct differences. Itz Cash is a pure payment instrument and has nothing to do with money transfer or withdrawal. You cannot encash it or transfer it. In case of mobile wallets, you can put in money and redeem money. When those are allowed, there are risks of money laundering etc, which I dont want to go into.

Numbers
We do almost 80,000-100,000 transactions in a day - the largest in the non-banked category. The average amount varies from category to category. Railway ticket average is around Rs. 1400. We’re the second largest on IRCTC - with around 17 percent market-share against ICICI Banks 21 percent. In terms of utility bills, like Reliance Energy, we have 75 percent market-share in the online space. This is because of simplicity and convenience. Daily transactions are between Rs. 6-8 Crores. Utility payments are around Rs. 1000, average. Donations average at Rs. 51-100, Dish TV payments at Rs. 150-200. Our cards are available at 100,000 outlets, controlled through over a 1000 distributors.

In addition to that, we have more than 10,000 Itz Cash Gold outlets, where you can go and pay cash, and they do entire transaction via a special cards with franchisees. Even the Railways has authorized them with a separate ID and password, to book tickets, collecting Rs. 10-15. Online, Itz Cash is accepted at over 3000 sites, and around 50-60 services on SMS. We have 2-3 merchants with Voice Portal channels. In addition to our text payment, we have been working with operators for bill payments - Tata Indicom and RWorld.

On Rural Rollout, Barriers To Adoption, Mobile (SMS vs GPRS), Security Issues and RBI Guidelines:
(more…)

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Payment Systems


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