National Payment Corporation of India's Fastag has huge growth potential, just like its flagship payment product Unified Payments Interface or UPI, as 97 percent toll transactions are now done electronically, said NPCI's chief executive officer Dilip Asbe.
"While UPI is like a flagship platform for the NPCI, we are seeing good growth in Fastag too. About 97 percent of toll collection happens electronically and the collection has also gone up three to four times. Now there are more new use cases for say, parking, and Fastag's potential is too high," Asbe said during a fireside chat with Razorpay's CEO Harshil Mathur at the fintech unicorn's annual FTX event held in Bengaluru on February 23.
Fastag is a device that employs Radio Frequency Identification (RFID) technology for making toll payments while the vehicle is in motion. They are operational at over 750 toll plazas, including all national highway toll plazas and over 100 state highway toll plazas across the country.
"The volumes may remain with UPI, but products like Fastag and BBPS (Bharat Bill Payment System) will service the niche segments, " Asbe added.
Talking about regulations and the role of fintechs, Asbe said that compliance should be the key priority. “Whatever is not laid down in regulations means a no…When we are part of managing other people’s money, we should be responsible," he said.
Asbe's words come at a time when one of India's fintech giants, Paytm, has been under the Reserve Bank of India's (RBI's) scrutiny for compliance issues relating to KYC and more.
"Compliance is good and risks become higher with size. If fintech founders are here to build long-term, I don’t see it without compliance,” the NPCI chief said.
Asbe also said that for new and emerging fintechs, international payments and recurring payment businesses have growth potential.
"Both conversion of cash to CBDC and recurring payments offer a great opportunity for fintechs to tap into a country that makes 500 million digital payments a day. Currently, there are just one million mandates a month, which, according to me can grow 100 times, " Asbe said.
International payments and contextual payments like EMI or credit have huge growth potential too, Asbe added.
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