Most road developers see almost 100-fold increase in toll collections through digital payments.
A year after the move to ban high-value currency notes, toll receipts from electronic toll collection (ETC) platforms seem to have got a fillip, with most road developers seeing an almost 100-fold increase in toll collections through digital payments. IRB Infrastructure chairman and managing director Virendra Mhaiskar told FE that the share of ETC has increased from just half a percent prior to the note ban imposed in November 2016, to about 25% at the end of the second quarter of this fiscal. Of IRB’s toll revenue of Rs 322.2 crore in Q2FY17, it collected just Rs 1.6 crore through cash-less methods. In stark contrast, in Q2FY18, IRB has collected Rs 97.25 crore through cashless methods, which accounts for 25% of its total collections in the period. Similarly, for Ashoka Buildcon, cashless methods accounted for 25% of the company’s toll revenue at the end of Q2FY18, up from less than half a percent a year earlier. Ashoka Buildcon managing director Satish Parakh told FE that digital usage has picked up after the ban on high value currency. He said, “Although one would expect a lesser hassle at the toll booths, I’d say a lot of discipline is still needed because if a non-ETC vehicle gets into the ETC payments lane, then they delay the ETC commuters. We are trying to find ways to tackle this by shifting them immediately to other lanes or even identifying them about 50 m earlier. We may have two barriers with the first one not opening for the non-ETC vehicles. Such trial-and-error methods are ongoing.”
Digital payments are essentially made via radio-frequency identification (RFID) stickers, which are linked to bank accounts, under the National Highways Authority of India’s (NHAI) electronic toll-collection programme, called FASTag. Under this system, the issuer bank issues the FASTag to their customer (a vehicle owner) and links his account for the deduction of toll fare. An “acquirer” bank, which ties up with the toll operator for managing the payments at the toll plaza, facilitates the toll transactions and settles payments to the toll booth operator. The clearing house, set up by the National Payments Corporation of India (NPCI), then facilitates the transaction and settlement between the issuer and the acquirer banks. The concessionaire, or toll booth operator, provides the infrastructure for acceptance of the RID-enabled tag in the ETC lane.
According to the latest data from NPCI, the FASTag programme is currently operational on 384 toll booths on national highways and seven toll booths on state highways. As on November 30, 2017, banks had issued a total of 7.68 lakh tags. Currently, there are 11 banks that issue FASTags, namely State Bank of India, ICICI Bank, Axis Bank, IDFC Bank, Karur Vyasa Bank, Equitas Small Finance Bank, Paytm Payments Bank, HDFC Bank, Kotak Mahindra Bank, Syndicate Bank and Punjab National Bank. The total transactions through FASTag has increased from 82.1 lakh transactions in June 2017 to 1.07 crore transactions at the end of November. In value terms, collections went up from Rs 225.76 crore in June to Rs 285.26 crore in November. Earlier this month, in an attempt to speed up traffic flow through toll booths, the government notified all manufacturers and dealers to equip new cars rolled out on or after December 1 with FASTags. According to the notification, FASTags will be fixed on the front windscreens of all new four-wheelers. This should further fuel growth in digital toll payments. Existing vehicle owners have, however, not been asked to install these FASTags for now.