Ditch the Cash- FASTag

Backspace Tech
6 min readMay 24, 2024


Toll collections on Indian highways are set to break records this year!

With an average monthly collection of ₹5,328.9 crores from April to January, the total for FY24 is projected to reach an astounding ₹62,000 crore.

So, What’s behind this surge in toll collection?

This remarkable increase indicates a rise in road travel and the growing adoption of a faster, more convenient toll payment method instead of cash.

Let’s get started!


The Catalyst is none other than FASTag

There is a sticker on your car windshield which lets you pay toll charges automatically as you drive through toll plazas, without much hassle!

That sticker, called FASTag will be linked to your bank account so the toll fee is deducted right away. It saves your time and fuel by avoiding long lines at toll booths.

Here’s a breakdown:

  • It’s a winshield sticker with a Radio Chip linked to your bank account/payment app.
  • As you cruise through a toll plaza, the Radio Frequency Identification (RFID) reader detects your FASTag.
  • Your linked account will be automatically debited for the toll fee.

You can keep driving without any hassle!

We’ve peered through the window of FASTag!

Now let’s know the architect and the purpose behind its inception!

The Architect

In December 2016, the National Payments Corporation of India (NPCI) pioneered the launch of the National Electronic Toll Collection (NETC) system, reshaping electronic toll payments across India. With the aim of eradicating cash transactions at toll plazas, NPCI established a centralized platform for

  • Toll collection,
  • Transaction settlement, and
  • Dispute management.

NETC, initially focused on integrating FASTag acceptance at National Highway toll plazas and ensured smooth electronic payments for long-distance journeys. As the program evolved, it extended its reach to include State and City toll plazas, expanding the network for effortless and efficient toll payments.

To drive this adoption of digital payment and enhance traffic flow, the Ministry of Road Transport and Highways (MoRTH) mandated the use of NETC FASTags for toll payments from February 15th, 2021.

The Purpose

Objectives of the NETC System:

1. Establish an Interoperable Ecosystem:

Develop a secure, interoperable framework usable nationwide.

2. Enhance Transparency and Efficiency:

  • Improve transaction processing transparency and efficiency.
  • Promote the electronification of retail payments.
  • Reduce air pollution by alleviating toll plaza congestion.

3. Support Government Initiatives:

  • Lower fuel consumption.
  • Minimize cash handling.
  • Strengthen audit controls through centralized user accounts.


As of April 2024, there are 37 issuer banks, and 12 acquirer banks are live with the NPCI for NETC FASTag service.

  • Issuer Banks: Provide Electronic Toll Collection (ETC) Tags for toll payments to vehicle owners.
  • Acquirer Banks: Enable toll plaza operations to accept ETC transactions through the ETC Payment System.

Additionally, a Steering Committee comprising 20 banks oversees the program’s priorities, operations, and management.

We have witnessed the architect, architecture, and the reason behind it!

Now let us know the NETC’s toolbelt!

Core Features and Functionalities of NETC system:

  • Acceptance (Interoperability): FASTags issued by any participating bank are accepted at all NETC-enabled toll plazas, regardless of the acquiring bank.
  • Payment Flexibility: Users can link their FASTag to their existing savings/current account, prepaid account, or any option offered by their issuing bank.
  • Convenient Tag Issuance: Users can obtain FASTags from any authorized NETC member bank.
  • Seamless Cashless Payments: Users can pay tolls electronically while their vehicle is in motion, eliminating the need to stop.
  • Reduced Congestion & Saved Time: FASTags expedite toll crossings, leading to smoother traffic flow and shorter travel times.
  • Online Recharge: User can easily top up their FASTag account online using various methods like UPI, credit/debit cards, NEFT, RTGS, or net banking through their issuing bank’s portal.
  • Fast Transaction Processing: Toll transactions are processed near real-time, with plazas sending data within 10-minute intervals.

Transaction Flow

  1. Vehicle Enters ETC Lane: A vehicle enters the designated lanes.
  2. FASTag Details Captured: The toll plaza system automatically captures details from the FASTag affixed to the vehicle (Tag ID [TID], Vehicle class).
  3. Details Sent to Acquiring Bank: The captured details are transmitted to the acquiring bank for processing.
  4. Validation Request to NETC Mapper: The acquiring bank sends a request to the NETC Mapper to verify the validity of the FASTag information.
  5. NETC Mapper Validation: The NETC Mapper checks its database to confirm the Tag ID is registered and active.
  • Valid Tag: If the TID is valid, the NETC Mapper responds with additional information like vehicle class, vehicle registration number (VRN), and tag status.
  • Invalid Tag: If the Tag ID is not found or invalid, the NETC Mapper informs the acquiring bank that the “Tag ID not found”.

6. Toll Fare Calculation (Valid Tag): Upon receiving confirmation of a valid tag, the acquiring bank calculates the appropriate toll fare based on the vehicle class.

  • Invalid Tag: If the tag is invalid, the acquiring bank notifies the toll plaza system to handle the situation manually.

7. Debit Request to NETC System: The acquiring bank initiates a debit request to the NETC system for the calculated toll amount.

8. NETC System Routes Request: The NETC system identifies the corresponding issuer bank associated with the FASTag and forwards the debit request.

9. Issuer Bank Account Check: The issuer bank checks the linked account associated with the FASTag for sufficient balance.

a) Sufficient Funds: If the account has enough balance, the issuer bank debits the account for the toll amount.

  • SMS Notification: The issuer bank sends an SMS alert to the tag holder informing them of the toll deduction.
  • Response to NETC: The issuer bank sends a response message back to the NETC system confirming the successful debit.

b) Insufficient Funds: If the account balance is insufficient, the issuer bank notifies the NETC system.

10. NETC System Informs Acquiring Bank: The NETC system receives the response (successful debit or timeout) from the issuer bank and communicates it back to the acquiring bank.

11. Acquiring Bank Informs Toll Plaza: The acquiring bank informs the toll plaza system of the transaction status (successful or failed).

Process Complete: Based on the final notification, the toll plaza system allows the vehicle to proceed or collect cash in hand for unsuccessful transactions.

And voila!

We’ve followed the toll road of NETC FasTag’s journey, but the orchestra needs its musicians.

The NETC program hinges on the cooperation of a diverse group of stakeholders. Here’s a breakdown:

Central Authority:

National Payments Corporation of India (NPCI): Acts as the program’s backbone, overseeing operations, clearing, and settling transactions, managing the NETC Mapper registry, and certifying participants.

Financial Institutions:

  • Issuing Banks: Grant FASTags to vehicle owners, linking them to their accounts for toll payments.
  • Acquiring Banks: Integrate toll plazas with the NETC system, enabling them to accept FASTag payments.
  • Payment Service Providers (PSPs): Facilitate essential services within the network, such as FASTag recharges and account status checks.

Toll & Parking Infrastructure:

Toll/Parking Plaza Operators (Merchants): Provide the physical infrastructure for NETC transactions, including RFID readers, toll booths, and plaza servers.

Program Management:

National Highway Authority of India (NHAI) / Indian Highways Management Company Limited (IHMCL): Manage the NETC program infrastructure, set operational rules and fee structures, and audit onboarded toll plazas.

Here comes the elephant in the room!


FASTag payments also result in disputes. Let’s look at some situations where this might happen:

In conclusion, FASTag offers a convenient and time-saving method for toll payments. While it offers convenience and efficiency, issues like dispute resolution remain pertinent. As the technology evolves, addressing the concerns will be crucial in maximizing the benefits of FASTag for all stakeholders involved.

To know more about the payment ecosystem, chargeback, and dispute nuances through delightful bytes of information, follow us on LinkedIn, Twitter, Facebook, and Threads.

P.S: What topic do you think we should explore next? Let us know in the comments.



Backspace Tech

Backspace Tech offers Fintech-as-a-Service to automate,simplify, and disrupt the payment industry by handling chargeback requests through a plug-and-play model.