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The National Highways Authority of India has joined nine banks, which will replace Paytm Payments Bank and will facilitate payments at the 247 toll stations.
Paytm Payments Bank, managed by One 97 Communications Ltd, is the ‘acquirer’ at these toll stations. Paytm Payments Bank was removed after the Reserve Bank of India barred it from accepting deposits in its accounts.
Paytm Payments Bank manages 247 toll plazas, representing approximately 14 per cent of the nation’s daily national highway toll collection, averaging Rs 190 crore. A report in the Economic Times said that Indian Highways Management Company Ltd, under NHAI, have selected Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC First Bank and Kotak Mahindra Bank to take over the toll service business.
An acquirer can be described as a bank or financial institution that processes payments (FASTag) at the toll plazas on behalf of the issuing bank and also routes them through the payment networks to the issuing bank. NHAI pays the acquirer bank a programme management fee, which is 0.13% of the daily collection at the toll stations.
In 247 toll plazas where Paytm is the acquirer bank, 56 are managed by various state agencies, 122 by NHAI, and 65 are located on highway stretches operated by private concessionaires under the Build Operate Transfer (BoT) model or acquired through the Toll Operate Transfer (ToT) mode of monetisation.
In FY23 total toll collection was Rs 48,028 crore and this year it is expected to touch around Rs 53,000 crore.
Apart from acting as an acquirer bank, Paytm was also a big issuer of fast tags accounting for 30% or about 1.8 crore of the total around 7.98 crore tags issued.
On Friday, the National Highway Authority of India (NHAI) dropped Paytm Payments Bank’s name from its latest list of 30 authorised banks for the FASTag service. The department said that due to regulatory actions against the company, it had decided to drop the Paytm Payments Bank.
The updated list by NHAI now includes banks such as Airtel Payments Bank, Allahabad Bank, AU Small Finance Bank, Axis Bank, Bank of Baroda, Bank of Maharashtra, Canara Bank, Central Bank of India, City Union Bank, Cosmos Bank, Equitas Small Finance Bank, and Federal Bank.
Other banks featured in the list are Fino Payments Bank, HDFC Bank, ICICI Bank, IDBI Bank, IDFC First Bank, Indian Bank, Induslnd Bank, J&K Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra Bank, Nagpur Nagarik Sahakari Bank, Punjab National Bank, Saraswat Bank, State Bank of India, Thrissur District Cooperative Bank, UCO Bank, Union Bank of India, and Yes Bank.
