Cash cards find eager users

From booking railway tickets to making travel itineraries, cash cards are fast replacing credit cards.

Cash cards are increasingly being accepted as a mode of payment for online ticketing. For instance, in the last six months, the Indian Railway Catering and Tourism Corporation (IRCTC) has seen reservations through cash cards increase by 1 per cent every month.

The number of bookings through credit cards, on the other hand, is coming down by 1 per cent every month.

The IRCTC booked over 2.2 million tickets this February. Of this, almost 600,000 tickets were booked through cash cards. Moreover, of the Indian Railways' online revenue of Rs 221 crore for February, 27 per cent came from cash cards.

"IRCTC has tie-ups with close to 30 banks but the booking done by three cash card operators is the same as these banks. Penetration of cash cards is three times more than credit cards," says Sanjay Aggarwal, general manager (operations), Indian Railway Catering and Tourism Corporation (IRCTC).

He feels that banks are not doing enough to create user experience and increase penetration, hence users are shying away from using credit cards online or accessing Internet banking.

IRCTC allows payments to be made through three cash card providers "" ItzCash card, Done Card and ICashCard, apart from its relationship with 30-odd banks. Cash cards are available in the denominations ranging from Rs 100 to Rs 5,000 and can be bought off-the-shelf. A user needs to pay cash and use them for any online transactions.

Online travel is a prime Internet activity, says a recent study by research firm Juxt Consult. About 36 per cent of all regular online Indians have bought a travel product online. At this level of usage, online travel becomes the seventh most popular online activity among urban Indians.

For the Oct-Nov-Dec quarter of 2007 the percentage of online travel booking was 9 per cent of the overall pie. Whereas, for the previous quarter it was just 3 per cent, says a finding from Online Travel Brand Momentux.

Mumbai-based Done Card Utility Ltd, one of the cash card providers on IRCTC, has a sale of 1 million to 1.2 million cards per month. For the month of February, the company had a revenue of Rs 40-50 crore. Of this 90 to 95 per cent came from online ticket bookings for railways.

"The users are city-agnostic. Those who are not covered by banks or who do not have credit cards prefer to buy cash cards," says Subhash Jewari, MD, Done Card. The company has a network of 22,000 agents across India.

The company, three months back, introduced cash card for airline booking as well. "In such a short span of time almost 5 per cent of the total online ticketing revenue comes from airlines. We are providing this service through our online portal www.airticketonline.in," he added.

Similarly, ItzCash Cards, on an average does a transaction of Rs 100 crore per month; of this, 35 to 40 per cent comes from ticket bookings.

Ticketing portals are also integrating their payment systems with cash cards. Makemytrip, one of the leading online ticketing portals, has tie-ups with ItzCash card and Done Card.

"When compared to credit cards, cash cards are fairly low. But we get accessibility to a different set of audience. Especially from states like Maharashtra and Gujarat, which are predominantly cash markets," says Sachin Bhatia, co-founder and chief marketing officer, Makemytrip.

However, Aggarwal is a bit sceptical on the acceptance of booking tickets through mobile phone, "Speed is still an issue. Presently GPRS speed is just about 128 kbps and the roll out of 3G is still uncertain. Besides, operators have to yet address the rampant issue of call drops. Only after this can one think about mobile commerce."