No wider adoption: Why Fastag's growth beyond toll payments is limited
Fastag
may be used for toll payments pan India but its adoption for wider use cases still remains severely limited. The electronic toll collection system has shown negligible growth in the last fiscal year.
The system's growth, including transaction volumes and participating banks, has remained largely static.
According to National Payments Corporation of India statistics, Fastag processes between 350-380 million monthly transactions, maintaining consistent levels since January 2024. The monetary settlements have remained within Rs 6,000 to Rs 6,500 crore during this period. The number of banks offering Fastag services has stayed at 38, unchanged since May 2023.
UPI
, the leading digital payment platform, has expanded its network to include 675 participating banks, showing significant growth from 445 banks in May 2023.
Industry experts point to the limited application of Fastag beyond toll collection as a primary reason for its stalled progress.
Also Read |
FASTag annual pass: How to purchase, validity, cost, trip limit & more - Top 15 FAQs answered
"Toll payments are undertaken by consumers only that many times in a month or a year, and even for commercial vehicles, almost the entire base has been already covered, and the sector is also not growing exponentially," said a top executive at a digital payments firm which processes Fastag payments.
"Overall, the payment method has stagnated at a certain level, the executive said according to an ET report.
Why is Fastag growth stalled?
Initially designed for digital toll collection on highways, Fastag's intended scope included various vehicle-related payments, including fuel purchases and parking fees.
Fastag growth stalled
"While a limited number of large commercial properties like shopping malls have started using Fastag as a payment method for their parking fees, fuel has shown almost no adoption," said the founder of a fintech startup offering this service.
Smaller commercial properties have been reluctant to implement Fastag systems due to substantial costs associated with installing compatible gates and tag readers.
"A large mall might be processing around Rs 30 to 40 lakh in parking payments per month, for that, the installation and maintenance might be a bit cumbersome," the founder added.
The installation expense for each gate is estimated to be between Rs 1.5 to 2 lakh, with additional upkeep costs to be considered.
"There is no margin to be made on fuel payments, hence that use case is also not picking up," said the executive of a digital payments firm cited above.
Also Read |
FASTag-based Annual Pass announced! Nitin Gadkari says new pass to have fee of Rs 3,000 - details here
In India, kerbside parking remains predominantly cash-based or QR code-dependent, with no significant movement towards Fastag adoption, despite being the country's most common parking method.
Financial industry experts indicate that fintech companies' disappointment with digital payment revenue generation has deterred private enterprises from new payment ventures.
The growth in UPI adoption was primarily driven by substantial marketing investments that provided customer incentives.
"No new-age fintech is pumping funds into digital payments right now. Fastag and such payment methods needed incentives to get more customers to use them readily, in the absence of incentives new use-cases are not building up," said the founder of a digital payments startup.
The Fastag system faces challenges with inadequate bank-based customer support, particularly regarding blocked tags and top-up difficulties. Despite distributors like PhonePe and Amazon Pay being involved, they depend on banks for customer service, which often fails to meet user expectations.
"Banks make money on the float they get through these payments, otherwise there is hardly any incentive for others to offer superior customer experience," said the founder cited above.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
24 minutes ago
- Time of India
Cabinet clears Rs2k cr for dairy, other projects
Patna: In a bid to boost dairy infrastructure, public amenities and urban connectivity, the state cabinet on Tuesday approved a series of development proposals amounting to over Rs 2,000 crore, including the installation of dairy equipment in five districts and major land acquisitions for religious and cultural projects. Tired of too many ads? go ad free now One of the key decisions was the approval of Rs 316 crore for installing dairy equipment at five locations under the Bihar State Cooperative Milk Producers' Federation (Comfed). The installations aim to enhance milk collection, cooling, processing, and milk powder production, directly benefiting farmers' groups affiliated with Comfed. "These proposals are aimed at increasing the dairy sector's contribution to the gross state domestic product (GSDP), boosting milk production, raising farmers' incomes, expanding cooperative activities and creating employment opportunities," said S Siddharth, additional chief secretary of the cabinet secretariat department. The dairy initiative, proposed by the animal and fish resources department, will be partially funded through the Small Industries Development Bank of India (Sidbi) Cluster Development Fund (SCDF) with Comfed contributing the rest. Milk collection and processing plants will be installed in Darbhanga, Wazirganj (Gaya) and Gopalganj while milk powder production units will be set up at Dehri-on-Sone (Rohtas) and Sitamarhi. Darbhanga and Wazirganj will each get 2 lakh litre-per-day (LLPD) capacity plants costing Rs 71 crore and Rs 50 crore, respectively. Gopalganj's 1 LLPD facility will cost Rs 54 crore. The milk powder plants at Dehri and Sitamarhi will have a capacity of 30 metric tonnes per day each with corresponding investments of Rs 69 crore and Rs 70 crore. The cabinet also approved the revised estimate of Rs 165 crore for acquiring 50 acres of land near the Ma Janaki Mandir at Punaura Dham in Sitamarhi district. Tired of too many ads? go ad free now The Sitakund festival, held near Munger and known to draw both domestic and international visitors, was officially brought under the Bihar State Fair Authority. To support sanitation workers, the cabinet sanctioned the formation of the Bihar State Safaikarmi Commission. This commission will work to mainstream sanitation workers and ensure their safety and rights. Furthermore, six new positions, including chairman and vice-chairman, were created for the Bihar Youth Commission. Addressing growing water scarcity, the cabinet approved surface water supply schemes in Supaul and Kaimur districts. In Chhatapur block (Supaul), two pumping systems with a combined capacity of 31 million litres per day (MLD) will draw water from the Sursar river to serve 318 wards in 63 villages. The project, which includes five years of maintenance, will cost Rs 320 crore. In Kaimur's Aghora block, a 7.85 MLD tube well drawing from the Sone river will supply drinking water to 41 wards across seven panchayats. The total expenditure, including seven years of maintenance, is estimated at Rs 293 crore. The need for these schemes was raised during the CM's Pragati Yatra. The cabinet also approved Rs 270 crore for installing electric fittings in classrooms and facilities across primary schools under the state's ongoing school renovation programme. The work will begin this fiscal and conclude by 2026-27. An additional Rs 276 crore was cleared for the renovation of secondary and higher secondary schools. In another major decision, the cabinet sanctioned Rs 180 crore for constructing godowns with a total capacity of 2.49 lakh metric tonnes through primary agricultural credit societies (PACS). Proposed by the cooperative department, the scheme includes 50% subsidy support and the remainder as a revolving fund, repayable through profits. The godowns will be of 200, 500 and 1,000MT capacities. To improve urban mobility in Saran district, Rs 696 crore was allocated to the road construction department for building a flyover from Gandhi Chowk to Nagarpalika Chowk in Chhapra town. The project is aimed at eliminating chronic traffic congestion and ease movement. Finally, the cabinet approved a revised estimate of Rs 1,121 crore for civil and electrical works at the State Sports Academy and International Cricket Stadium in Rajgir, Nalanda district, further boosting Bihar's sports infrastructure.
Time of India
24 minutes ago
- Time of India
NCLT admits BluSmart Mobility into insolvency
BENGALURU: The National Company Law Tribunal (NCLT) in Ahmedabad has admitted Catalyst Trusteeship's petition against electric‑cab operator BluSmart Mobility for defaulting on dues of about Rs 1.28 crore. The tribunal's order initiated the corporate insolvency resolution process (CIRP) and appointed NPV Insolvency Professionals Private Ltd as the Interim Resolution Professional (IRP). BluSmart, once a high‑profile player in India's EV‑based ride‑hailing market, has been battling mounting liabilities and cash flow pressures. Despite attracting venture backing and expanding its fleet, the company struggled to keep pace with operating costs and payment obligations, culminating in the admitted default that triggered the insolvency process. The proceedings come at a time when BluSmart's key shareholder, Gensol Engineering, and its subsidiary Gensol EV Lease are also under insolvency. The tribunal recently admitted separate petitions by the Indian Renewable Energy Development Agency (Ireda) for defaults of Rs 510.10 crore against Gensol Engineering and Rs 218.95 crore against Gensol EV Lease. According to Ireda's filings, cross‑default provisions linked the two entities, which had availed term loans for electric vehicle leasing and infrastructure. Personal guarantees by promoters Anmol Singh Jaggi and Puneet Singh Jaggi and corporate guarantees from Gensol Engineering were also invoked. Troubles at Gensol and BluSmart deepened after a Sebi investigation two months ago alleged that the Jaggi brothers diverted loans taken in Gensol's name to buy a luxury flat, inflate Gensol's stock price and fund personal ventures, while also forging no‑default letters from lenders such as Ireda and Power Finance Corporation to falsely claim that the company was not in default. 'The NCLT's decision, despite BluSmart's attempt to resist insolvency proceedings by citing temporary financial difficulties and minor technical defaults that were later fixed, reinforces that defaulters cannot take shelter under vague grounds,' said Akshit Goyal, partner at Goyel & Goyal. 'It upholds the sanctity of the IBC and reflects that insolvency is a last‑resort remedy to protect the lending ecosystem, not a tool for routine recovery. ' As part of the BluSmart order, the tribunal imposed a moratorium that bars any recovery proceedings, transfer of assets or enforcement of security interests against the company while the CIRP is underway. The IRP has been directed to take control of assets within seven days, invite claims from creditors, and file progress reports with the tribunal. Catalyst has been asked to provide Rs 10 lakh as interim funding to run the process, a procedural deposit that will later be adjusted by the committee of creditors. The Registrar of Companies has also been instructed to reflect BluSmart's insolvency status on the MCA portal. A significant concern for customers arises from BluSmart's wallet system. The company operated a closed‑system prepaid payment instrument (PPI), which is essentially an app‑based wallet that could only be used for BluSmart rides and related services. As per the Reserve Bank of India's master directions, these instruments do not permit cash withdrawal or redemption and do not require authorisation from the Reserve Bank. This means funds parked in such wallets are outside the purview of RBI regulation and lack the protections available to regulated payment instruments. 'There is a chance that customers may get refunds because the company's wallet operates through a PPI licence. If there was no PPI, customers would have had to file their claims, as they rank last in the recovery waterfall," Sonam Chandwani, managing partner at KS Legal & Associates, told TOI. 'The larger concern will likely be for investors rather than customers, given that wallet balances are usually small. Since BluSmart has tangible assets, the case could attract serious resolution interest, and there is also a possibility of a group insolvency angle. ' Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Time of India
24 minutes ago
- Time of India
Lenskart's files Rs 7,500-8,000 cr IPO papers with Sebi
BENGALURU: Lenskart Solutions is gearing up for one of the largest consumer-tech listings of the year, with its initial public offering (IPO) expected to raise between Rs 7,500 crore and Rs 8,000 crore, people aware of the matter said. The final size will depend on valuations at the time of listing. The company filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) on Tuesday. The IPO consists of a fresh issue of shares worth Rs 2,150 crore and an offer for sale (OFS) of up to 13.23 crore shares by existing investors and promoters. A pre-IPO placement of up to Rs 430 crore has also been proposed, which could reduce the fresh issue size. Proceeds from the fresh issue will be used for the expansion of company-owned (CoCo) stores in India (Rs 272.62 crore), lease-related payments (Rs 591.44 crore), technology and cloud infrastructure (Rs 213.38 crore), and brand marketing (Rs 320.06 crore). The remainder will be allocated for inorganic acquisitions and general corporate purposes. As of March 31, 2025, Lenskart operated 2,723 stores globally, including 2,067 in India and 656 overseas. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Remember Him? Take A Deep Breath Before You See Him Now The Noodle Box Undo by Taboola by Taboola The company sold 27.2 million eyewear units in FY25, up from 21.2 million in FY24 and 15.9 million in FY23. Annual transacting customer accounts rose from 7.7 million in FY23 to 12.4 million in FY25, while its paid membership program, Lenskart Gold, reached 6.77 million members in India. Financially, the company swung from losses to profitability in FY24. In FY25, Lenskart reported revenue of Rs 6,653 crore, up from Rs 5,428 crore a year ago. Net profit rose more than fivefold during the same period, from Rs 59 crore to Rs 297 crore, driven by operating leverage and higher repeat purchases. Lenskart's apps have seen more than 100 million cumulative downloads, while its websites drew 105 million visitors in FY25. New customers, on average, purchased 3.62 pairs of glasses within two years, the filing revealed. The case of the missing degree Buried in Lenskart's DRHP is an oddly specific risk: one of its promoters, Sumeet Kapahi, who also heads global sourcing at the company, can't find his (Hons) degree or marksheets from the University of Delhi. He has emailed, written letters, and even applied through the university's online portal, but is still waiting for a response. Until then, Lenskart and its bankers have relied on the certificates he submitted for the IPO filing. The company admits there's no guarantee the university will ever send the documents, making this one of the more unusual disclosures in a multi‑thousand‑crore IPO draft. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
