As FASTags become mandatory for private and commercial vehicles crossing toll plazas on all national highways across India, the rush to buy these for vehicles is perhaps at its peak. Axis Bank has made these digital contactless payment method tags free for vehicle-owners for the first few months. To make it even more attractive, the government is incentivising it with 2.5 per cent cashback for every transaction you make at any toll plaza. Rival Kotak Mahindra Bank has also announced free tag still December 1 with a similar limited period offer, an official statement said, while an HDFC Bank official said the lender has waived off the processing charges of Rs 100 till December 31.
There is a standard security deposit for every tag as per the vehicle size. A senior Axis Bank official said the bank spends up to Rs 100 for onboarding a customer, including the cost of the tag, courier charges, etc, which will be borne by the bank till the offer continues. “We want to be the payments partner of choice, and we will also look at it to get new business by way of account openings,” Axis Bank executive director Rajiv Anand told PTI. At present, the bank has installed chip-readers at over 60 toll plazas out of the 500-plus, and a million tags out of the 9.5 million in use, making it the fourth-biggest player. Efforts are on to acquire more toll plazas, the official said.
About the sales target, Anand declined to give a number but said it wants to be the leader in the segment which is currently dominated by ICICI Bank having entered the space long back. He said corporates banking with Axis Bank, the salary account customers having vehicles and auto loan customers will be the first target for the product, which is like a prepaid wallet that can be linked to a bank account. Anand said there can be multiple uses of the tags, pointing out to parking at facilities like airports and refuelling. The bank is already carrying out a pilot using the tags at the Bengaluru airport for swift entry-exits.