Paytm Payments Bank, ICICI In A Race To Obtain FASTag Leadership

• ByStartupStory     |    July 28, 2021

ICICI Bank and Paytm Payments Bank are competing it out for the leadership position in National Electronic Toll Collection with both banks claiming market leadership. Paytm said that the payments bank is the largest FASTag issuer in the country as well as the largest acquirer of toll plazas. “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% of the total FASTags issued by 32 banks in the country,” said Paytm Payments Bank chief business officer Sajal Bhatnagar. On the other hand, ICICI Bank executive director Sandeep Batra claims that the bank has acquired market leadership in FASTag with 36% of the value of toll collections in FY21. “Our FASTag numbers during the first quarter have seen 146% growth year-on-year,” said Batra.

Toll Collection is a lucrative business for banks as the issuer bank gets a 1.5% 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 doesn’t have to block his funds in an idle FASTag-only wallet.

According to Bhatnager, 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-flowing tolling using automatic number plate-recognition tech whereas despite issuing a large number of FASTags, ICICI Bank can generate higher value as heavy commercial vehicles account for the bulk of road toll payments. Banks are also in a race to acquire as many highway toll concession holders as possible. Electronic collection is already operational at 780 toll plazas.

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