MUMBAI: Payment technology firms like Paytm, Mobikwik and Citrus Pay are shut out of collaboration on toll collection on highways by the highways authority and the company executing electronic money collection at toll plazas.
The payments company, National Payments Corp of India (NPCI), would go with full-fledged commercial banks, which appear to have covered a majority of the households that own cars, and truck drivers through debit or credit cards.
The decision of NPCI, which is owned by banks, and the highway authority might be a blow to payment technology companies which have been eyeing businesses that originate at the governmental level. This could also be a sign of banks turning aggressive in their attempts to reduce the threat from these nimble technology firms.
Digital transactions are growing so fast that giants such as China’s Alibaba are buying stakes in these firms. The value of transactions through wallets rose more than two-and-half times to Rs 2,251 crore in February from Rs 876 crore a year earlier. Total number of transactions jumped to 4.9 crore from 2.4 crore, data from the central bank showed. Mobile phones, which have become the preferred mode of transaction for the younger generation, saw the value jump toRs 46,473 crores in February fromRs 14,888 crores a year earlier. The numbers jumped to 4.3 crore from 1.9 crore.
But some of the firms aren’t worried as they bet on the government’s thrust to use digital platforms for everything and say they could provide a superior technology.
“Honestly, I am not worried, I am sure they will come around,” Nitin Misra, head of products at Paytm said. “There are cases where the government has been progressive in the past; RBI gave us the payment bank licence.”
The implementation of a pan-India electronic toll collection system on national highways may help save Rs 87,000 crore, according to a joint study by the Transport Corporation of India and the Indian Institute of Management-Calcutta.