The Indian Railway Catering and Tourism Corporation has just made headlines more interesting in a move which could reshape India’s digital payments forever. In a major development that signals the government’s serious entry into the fintech space, IRCTC has secured in-principle approval from the Reserve Bank of India for operating a payment aggregator.
This historic milestone positions IRCTC alongside industry leaders like PhonePe, Paytm, and Google Pay, marking a significant shift in how railway transactions will be carried out in the country.
RBI Has Given The Green Signal
The Reserve Bank of India has granted this coveted license under the Payment and Settlement Systems Act of 2007. This approval empowers IRCTC to process online payments independently through its subsidiary, IRCTC Payments Limited, without relying on external payment processors.
What makes this development particularly noteworthy is that IRCTC becomes one of the few government-backed entities to enter the competitive payment aggregator space, traditionally dominated by private players like Razorpay, Cashfree, and PayU.
What Is A Payment Aggregator?
Think of a payment aggregator as a digital middleman that simplifies online transactions for businesses. Here is how it works:
- Single integration point: Merchants don’t need separate setups for different payment methods
- Multiple payment options: Supports credit cards, debit cards, UPI, net banking, and digital wallets
- Seamless processing: Handles all technical aspects of payment processing
- Security management: Ensures secure authentication, processing, and data protection
For IRCTC, this means complete independence from third-party payment service providers for processing transactions on their massive platform.
iPay Gets A Major Upgrade
IRCTC’s in-house payment platform, iPay, launched in 2019 with limited functionalities. The new payment aggregator license breathes fresh life into the platform, transforming it from a basic payment tool into a comprehensive payment gateway.
Meeting RBI Requirements
The journey is not complete yet. According to RBI guidelines, IRCTC Payments Limited must fulfil all conditions specified in the in-principle approval. These typically include:
- Technical infrastructure setup: Robust payment processing system
- Security compliance: Meeting cybersecurity and data protection standards
- Operational readiness: Demonstrating capabilities to handle large transaction volumes
- Regulatory compliance: Adhering to all RBI norms and guidelines
Once all conditions are satisfied, the final authorisation will be granted within a year, putting IRCTC on track to launch full-scale payment aggregator services soon.
Revolutionary Move By IRCTC
With over eight crore users, IRCTC operates one of India’s busiest e-commerce platforms. This massive user base provides several advantages:
- Access to millions of active users
- Guaranteed transaction flow from railway bookings
- Government backing enhances user confidence
- Reach across urban and rural India
This development signals the government’s commitment to building indigenous capabilities and reducing dependence on private payment processors for critical public services.
IRCTC’s transformation into a payment aggregator represents more than just a business expansion; it’s a strategic evolution that positions India’s Railways at the forefront of digital innovation. With a massive user base, government backing, and now RBI approval, IRCTC is well-positioned to become a significant player in India’s payment ecosystem.
As the final approval process unfolds, the industry will be watching closely to see how this government-backed entity competes with established private players and contributes to India’s digital payment revolution.
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