Railways gives green light to go cashless

New Delhi: Indian Railways has asked the State Bank of India and ICICI Bank among others to provide around 15,000 point of sale (PoS) machines at reservation counters, with about a thousand of these machines to be made available by Dec 31, to make railway travel bookings digital. Currently, the Railways does not provide POS service for debit and credit card payments at its ticket counters.

“We have around 12,000 ticket counters. All of them would be equipped with one or more POS machines depending on the daily transactions. Managing cash is also a huge task for our staff. It would be beneficial for them as well if we could have enough swipe machines,” a senior rail board official said. In the first phase, counters at all urban centers would have the machines. “In places like Mumbai, where there’s a huge sale of monthly passes, we would have POS machines installed immediately. SBI has promised to provide 1,000 machines,” the official added.

The railways ministry will also go cashless for paying vendors and contractors. A notification would soon be issued that payment for all expenses should be made cashless by all zonal and divisional railways. The chairman of the railway board would soon issue a notification for the same. Rail Minister Suresh Prabhu has already instructed his officials to make the national transporter the first government organisation to be cashless. Railways already has 95% of its freight collection cashless. However, in the reserved category, it’s just 55%. In unreserved category and monthly passes it’s 100% dependent on cash payments as payment through cards was not allowed.

ET View: Incentivise Banks

This is welcome, and in sync with the government’s goal to move to a less cash society. It will also boost transparency for the railways. In a concept paper, the RBI has suggested that banks should install and acquire terminals in some proportion to the number of cards they have issued as these are the ones that would be used by cardholders. Moreover it would also be easier to monitor the implementation program of banks in setting up POS terminals and card acceptance infrastructure. And banks must be incentivized to set POS machines that involve fixed and recurring costs.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.