ICICI & Paytm Compete Over FASTag Leadership

By siliconindia  |  Wednesday, 28 July 2021, 10:00:32 AM IST

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Paytm Payments Bank and ICICI Bank are racing for the leadership position in National Electronic Toll Collection with both banks claiming market leadership. Paytm has stated that the payments bank is the largest FASTag provider in the country as well as the largest acquirer of toll plazas.

Sajal Bhatnagar, chief business officer, Paytm Payments Bank says, “Paytm has become the first bank in India to issue 1 crore FASTags, it has become the largest acquirer bank for payment collection at 280 toll plazas. This is almost 30 percent of the total FASTags issued by 32 banks in the country.”


Furthermore, ICICI Bank executive director Sandeep Batra states that the bank has obtained market leadership in FASTag with 36 percent of the value of toll collections in FY21.

Batra further adds, “Our FASTag numbers during the first quarter have seen 146 percent growth year-on-year.”

Toll collection is a remunerative business for banks as the issuer bank obtains a 1.5 percent commission on the transactions. ICICI Bank was one of the early movers to partner with the ministry of road transport and highways in its pilot project for electronic toll collections in 2014.

Paytm has been able to ramp up the numbers because of its large user base. The big advantage Paytm has is that the primary e-wallet can be the FASTag wallet. This means that the user does not have to block his funds in an idle FASTag-only wallet. According to Bhatnagar, Paytm has an advantage over other issuers as customers can dip into their regular e-wallets for making toll payments. In most e-wallets, the money is locked in a separate wallet. Paytm is also working with the National Highway Authority of India toll concessionaires to implement multi-lane free-flow tolling using automatic number plate-recognition technology. This will make toll collections more efficient.

Regardless of issuing a large volume of FASTags, ICICI Bank can generate higher value as heavy commercial vehicles account for the bulk of road toll payments. According to government data, toll collection in June 2021 increased to 2,576 crore, which is around 21 percent higher than 2,125 crore collected in May 2021. It is not just FASTag issuance that banks are competing for. Banks are also in a race to acquire as many highway toll concession holders as possible. Electronic toll collection is already operational at 780 toll plazas.

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