Paytm and NHAI partner for automatic toll collection at e-toll plazas in India


21 Jun 2013
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Driving through the highway in the middle of the night and remembering you don’t have enough cash on you? Now you can use your Paytm account to pay for the toll charges at various highways in the country. The National Highways Authority of India (NHAI) has confirmed that it has awarded Paytm a deal for automatic toll collection. After its digital wallet and e-commerce business and the recent success owing to the demonetization of Rs 500 and Rs 1,000 notes by the government, Paytm is now mulling spreading its wings further in the public-private partnership market in India.

Under the tie-up with the NHAI, commuters can now use Paytm FASTags to zip past toll plazas while the service automatically deducts charges from their digital wallets. Raghav Chandra, chairman for the NHAI, told Economic Times that Paytm has won contracts for automatic toll collections at highways in various states. The service has been awarded the deal for 40 out of 350 highways as part of the government’s plans to allow digital wallet companies manage its electronic toll service. The e-tolling service is aimed at reducing congestion and helping commuters save on time.

The NHAI launched its e-tolling service in April at over 300 toll plazas across the country, including NH 8, NH 24, and NH 44. The service allows vehicles with FASTag cards to pass toll plazas without having to stop. FASTag is a rechargeable tag that is fixed on the windscreen of vehicles and allows automatic deduction of toll charges with the help of radio-frequency identification technology (RFID). The tag is then linked to a prepaid account from which the amount is deducted every time the vehicle passes through the plaza. With a one-time fee of Rs 200, the FASTag requires a minimum recharge amount of Rs 100 and allows recharge up to Rs 1 lakh for commercial vehicles.

NHAI is also offering 10 percent discounts on payment through digital modes. Various branches of SBI, ICICI Bank, and Axis Bank are selling the FASTags for use on e-tolls. The banks issuing the tags will in turn receive 1.5 percent of the electronic toll revenue every time a vehicle pays using the tag. Paytm in its blog , dated September 21, 2016, explains that the Paytm FASTag is valid at more than 350 toll plazas, allowing cashless instant payments for a hassle-free transit. However, with NHAI’s confirmation, it appears the service is active only on some of the plazas.

Paytm is reportedly also in talks with the Railways for digitizing payments mechanisms. The company has proposed a range of services to the Railways including allowing passengers to use the digital wallet to pay for services such as purchasing tickets, snacks at the railway stalls, and parking fee, among others. Although Railways Minister Suresh Prabhu has confirmed that there has been a proposal from Paytm for unreserved tickets to be sold through its app, there is no official information on whether the service has been granted any such deal.
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