Opportunities and Challenges in the FASTag ecosystem - Anjna Bhati, Director - Data Analytics & AI, BluePi Consulting
Today’s customers are showing preference to convenient, online, contactless and secure payment modes over hard cash for all their purchases. Banks and financial institutions are catering to this need with easy online transaction platforms. Transportation and auto sector are catching up with the other industries too, to provide ‘payment-on-the-go’ with FASTags for highway toll collection. This mode is providing quicker payment option instead of the time-consuming check-outs at the manually-managed toll booths. The FASTag ecosystem reduces cost, and manual effort, establishes resilient systems and increases revenues. It provides significant savings on cost and time, reduces bottlenecks at the Toll Plaza by enhancing the efficiency of the toll collection process and the operations. With the government making FASTag mandatory for 4-wheelers, the toll fee collection has increased will far lesser leakages in the system. It is equally important to put in place, solutions that support automated processes and scalability aspects to manage increasing volume in traffic.
However, when the processes are automated, there are certain complexities involved and have to be streamlined for the system and the FASTag ecosystem to function optimally.
Solutions to address the revenue loss for the Toll Plaza
FASTag is a great concept and has eased the process of paying highway tolls across the country. The deduction will be made automatically from the FASTag, which is directly connected to a prepaid or savings account at the Issuer Bank of the vehicle owner. But the Plaza is not free from challenges of revenue loss it faces with this automated fee collection process. There are instances, where the vehicles can cheat the system by paying lesser amount than the actual fee. Take the case of a truck driver who buys a FASTag sticker meant for passenger vehicle or car and fixes it to the windshield. Now the sensor at the Plaza deducts the toll fee for a car, which is a far lesser amount compared to the truck toll. Such incidents bring about significant revenue loss to the Plaza and the Acquirer Bank that serves the Plaza. This challenge is solved by solution providers who work with Acquirer Banks by putting a system in place that accurately identifies and detects vehicle violations, by capturing them with an AI/ML model designed and automated for vehicle-class detection. The type of vehicle that pass through the Plaza are determined with the images that are captured and fed into the system of Acquirer banks which can then ask the Issuer Bank and the FASTag owner to pay the incremental amount back to the Plaza. This can arrest heavy revenue losses for the Plaza as majority of fees comes from the trucks that are higher in volume, besides the higher fee amount they bring.
Benefits from redesigning of Acquirer Bank’s Legacy systems
Traditional or legacy systems at the Acquirer Banks many a time have flaws, where transactions are not uniformly captured by different equipment leading to deadlock, causing delays in settlement of issues related to Toll fee discrepancies. The existing solutions are also not designed to handle the surge in volume of the vehicles as they are not scalable. Business benefits cannot be accomplished, which otherwise can be established with modern, scalable architecture that deliver actionable insights. Therefore, it is imperative to have seamless integrated architecture configured and incorporated into the scalable solution, which is made possible with technologies, such as Cloud, AI/ML, Big Data, and Business Analytics. Secondly, both the Toll Plaza as well as the Acquirer Banks should be able to login to the system that provides transparency of all transactions in real-time to settle disputes, if any. Solution Providers provide Acquirer Banks the required scalable, accessible, available and secure solutions that can be leveraged gainfully.
Acquirer Banks that offer such reliable and scalable solutions are very beneficial to the Toll Plazas as they provide automated plugging in of revenue leakage. This can add 10-15% revenues, to the bottom lines of both the Toll Plaza and Acquirer Banks, without further incur of cost. The additional manpower at the Plazas can be reduced upto 80%, thereby significantly saving on costs related to hiring and compensation, along with highway robberies and misappropriation of cash eliminated to a great extent.
FASTag that is used as a wallet and payment mechanism is being leveraged in other business applications and areas too, such as buying of fuel at petrol stations and parking tickets among others. The convenience and reliability this payment option offers, cannot be ignored and soon manned or illegal parking will become a thing of the past. FASTags can be used for enabling of car-maintenance services also, wherein with just scanning the RFID on them, the amount to pay gets automatically deducted.
The challenges in effective adoption of FASTag are the lack of required infrastructure that has to be addressed and processes and systems, which need to be streamlined and put in place.
However, with the advantages outnumbering the challenges of using FASTags, India should effectively address the latter and continue to ride the global digital wave. As the country is looking at industrial ecosystems to be seamlessly connected, FASTags with the appropriate solutions to effectively manage them, power the country’s goal to go digital.