11% of India’s toll plaza collections now managed by Paytm

National Highways Authority of India (NHAI) has finally partnered with the mobile wallet Paytm to sell e-Toll tags. This is a big move in terms of expanding RFID based e-toll tags for faster electronic toll collections on highways thus resulting in faster movement of vehicles and reduction in traffic snarls.

Earlier, NHAI had refused to partner with mobile wallets and non-banking payment apps for selling e-toll tags. Due to this reason, recharging e-toll tags had become a lengthy process, and several drivers initially chose manual toll payments, avoiding the process of online recharge.

After choosing Paytm as a partner for selling e-toll tags, NHAI (National Highways Authority of India) has granted contract to Paytm for managing 40 out of 350 toll plazas across the country.  Hence, 11% of all toll plazas in India would be now managed and operated by Paytm for automatic deduction of toll charges. As per reports, trial runs of online payments with Paytm has already been conducted, and monitored at National Payments Corporation of India (NPCI) servers.

Sources from NHAI have confirmed that under the contract, various highways across different states have now been converted into Paytm-operated toll plazas. This move has been made because compared to e-toll tags, direct debit of toll charges from Paytm wallet is much faster. In the case of e-toll tags, the user has to recharge his account after every few days; but with Paytm, the driver will zip past the toll plaza as the charges would be directly debited from the mobile wallet.

Meanwhile, due to the demonetisation move unleashed since November 8th, there has been a sharp increase in Paytm transactions. Even though RFID in all new vehicles would not be an instant solution to cash crunch, the mantra for now seems to be ‘Paytm karo’!