Passengers booking tickets on the Indian Railway Catering and Tourism Corporation (IRCTC) website now have the option to pay later. IRCTC has partnered with a Mumbai-based company called ePayLater that allows users to make a purchase immediately and gives them an option to pay later. On the IRCTC website, a person will have 14 days time period to pay after he/she has booked the ticket. A first-time user needs to provide details such as email id, telephone number and a link to Aadhaar or PAN card. Post that the customer needs to enter just a one time password. Customers have the option to pay using debit cards, credit cards, NEFT transfers, currently pay by cash option is not available. On the IRCTC website other options of payment available are debit card, credit card, pay on delivery and mobile wallets.  

What if you do not pay?

If a customer does not pay within the time limit of 14 days there will be penalty fees applied, there can also be legal action taken for nonpayment. Currently, the option is available only to select users, as per Trak.in. The selection of the user is done using data science and analytics. Only those customers who have a good past transaction and payment history will be given the option to pay later. This is similar to taking a short period credit or using a credit card where you repay within a period of time. ePayLater expects to capture at least 5 % of the 6 lakhs transactions per day on IRCTC in next six months.

Funding

ePayLater was started in 2015  and has tied up with merchants such as PVR, Crownit, VaerOrganic, IndustryBuying, Power2SME, Tolexo, Bizong and Bizzgain. In June last year, the company raised $2mn in seed round funding from high net individuals.

Competition

Another company Simpl also gives users the buy now and pay later option. Simpl, however, has two billing cycles 1st and 16th of each month. The company has more than 30 merchant partners including NYKAA, JustRide, Faasos , BookMyShow, FreshMenu, Holachef , Voonik etc. Both the companies charge merchant partners a fee for each transaction to make revenues. However, in the case of late payments, Simpl claims it charges a penalty of up to Rs 250 while ePayLater charges a flat Rs 20 or a penalty rate of 36% per annum for the number of days the amount is overdue.