Indian Railway Catering and Tourism Corporation (IRCTC) has reportedly barred many banks from using its payment gateway for debit cards transactions as these lenders refused to share the convenience fees charged from customers with IRCTC, reports Financial Express.

After demonetisation, IRCTC had waived off the Rs 20 convenience fee it charged from customers. However, it expected banks to share a part of the convenience fees that they charged to customers for the convenience of making online purchases on tickets, etc.

Many travellers prefer to book their tickets online, making the IRCTC website one of the busiest portals. As of now, the portal allows only Indian Overseas Bank, Canara Bank, United Bank of India, Indian Bank, Central Bank of India, HDFC Bank and Axis Bank cardholders to make card payments.

IRCTC waived off the convenience fee of Rs 20, post demonetisation. “Every day we are losing 50,000 transactions,” a senior executive with State Bank of India (SBI) told

“Normally, the merchant pays the acquiring bank. But, since IRCTC does not pay us, we were recovering our costs from customers and that is how it had been all these years,” he added.

Merchants, here IRCTC, generally pay some charges for using bank services such as accepting card-based payments. The charge is referred the merchant discount rate (MDR). The banks which refused IRCTC’s demand argue that the demands violate the principles of the merchant-acquiring business.

Earlier, IRCTC asked banks to share half of the convenience fees collected by lenders. It is learnt that The Indian Banks’ Association (IBA) is in the process of resolving the issue and is discussing the matter with IRCTC and the Indian Railways.

For railway ticketing and other passenger service transactions, the RBI guidelines which were issued on February 16, the transactions would attract a flat fee of Rs 5 for transaction values between Re 1 and Rs 1,000 and Rs 10 for transaction values between Rs 1,001 and Rs 2,000.

Above Rs 2,000 will attract an MDR of 0.5 percent, with a cap of Rs 250 per transaction.

Ticket buyers can pay via e-wallets for their bookings which do not charge any convenience fees to the parties.