FASTag & Fraud Risk – Awaiting the Road to Safer Datafication!

The road ahead for India of developing a toll-operate-transfer model has an optimal FASTag implementation at its core, coupled with a robust data-forward centralised system. FASTag – the government of India’s electronic toll collection mechanism – is made official since 15 January 2020. While the government cited a lack of availability of FASTag tags as a reason behind yet another delay in granting it an officially mandating subscription obligation for car owners, the pertinent issue that stares in the eyes of the policymakers is concerning the UPI (Unified Payment Interface) subscriber data safety.

It has been reported that in certain instances, the notorious digital fraudsters have succeeded in applying novel ways to meddle with people’s UPI PIN data, access to which the fraudsters gain via manipulative means – acting on the pretext of simplifying for the potential registrants the online (afresh) FASTag registration.

On a couple of occasions, reports have surfaced revealing the modus operandi used by fraudsters wherein they pretend to be calling from either of the registered partner banks; sharing via SMS a fake link to a (deceitfully titled) online form seeking such sensitive subscriber details as FULL NAME, registered mobile number, UPI PIN data, etc. on the pretext of FASTag wallet activation.

It is vital for the FASTag subscribers at this stage to realise the fact that such baseless registration means proposed and pitched by fraudsters are not the official platforms introduced by the NPCI (National Payments Corporation of India) to register for FASTag access. Be mindful that FASTags can only either be self-activated via the MyFastag app or can be activated by visiting the designated (partnering) bank branches nearby.

Therefore, readers should clearly understand that no FASTag subscription or activation formalities are officially carried out on phone calls. Likewise, there is simply no need for sharing any PIN or password in such fraudulent online forms. Clicking on any fictitious SMS links received from doubtful sources should strictly be avoided. Kindly also be advised that there also exists an alternative of registering for NHAI Prepaid wallet which is rechargeable and can be paired with FASTag to initiate safe payments.

As per an Economic Times report, around 6.4 crore FASTag transactions, valuing Rs. 1,256 crore, got processed in December 2019, compared to 3.4 crore transactions valuing Rs. 774 crore in November – as per the FASTag transactions’ data released on January 1, 2020 by the National Payments Corporation of India. Considering the magnitude of transactional volume and the monetary value, it’s vital to sensitise people regarding a safer FASTag navigation pathway especially in its initial years of the rollout; for ensuring safety in the subsequent payment phases, a robust security protocol of NPCI already exists in the form of the Fraud Risk Management mechanism.

Decoding FASTag: How National Electronic Toll Collection (NETC) Works?

The National Payments Corporation of India (NPCI) has built the RFID-enabled National Electronic Toll Collection (NETC) program poised to fulfil the electronic tolling needs of the transport market of India. For the same objective, NPCI now offers a national interoperable toll-payment solution that also inculcates within its scope the offering of clearinghouse services for settlement of disputes. Within its spectrum of offering ‘Interoperability’ (applied to NETC system), it includes a common set of procedures, business rules and technical specifications allowing a customer to utilise their FASTag as a payment mode on either of the toll plazas, regardless of the specifics of the acquirer of the toll plaza.

The various objectives of NETC FASTag are: i. creating a compatible and interoperable toll-collection ecosystem to use nationally. ii. through a simple and robust framework, increase transparency and efficiency in transaction processing. iii. achieving the sub-goals of the Government of India of electronification of retail payments, reducing air pollution via decreased toll plaza congestion, plummeting fuel consumption and promoting cashless transactions, enhancing audit control via user account centralisation

NETC – the technical ecosystem on which the FASTag is based – supports multiple issuers and acquirers authorised for the NETC program. The transaction request from the Toll Plaza is sent to the Acquiring System for transactional validation, and it then moves further so as to finally reach the NETC Switch. The NPCI routes these transactions to the relevant Issuer Bank for debiting the tag-holder account. During the entire process, a particular transaction travels through an 8-step (LEGs) process.

The NETC transaction process flow emanates at the Toll Plaza System (capturing the FASTag data, viz. Tag ID, TID, Vehicle Class, etc.) and travels through the Acquirer Bank for processing, which then sends a request to the Online Switch & Mapper (i.e., the NETC validation mechanism that responds with such details as Vehicle class, VRN, Tag Status, etc. – upon an absence of the Tag ID in NETC Mapper, a response is issued stating that the Tag ID isn’t registered). Following the receipt of a Tag ID validation from the NETC Mapper, the acquirer host calculates the relevant toll fare and emanates a debit request to the NETC system. Then the NETC system switches the debit request to the relevant issuer bank for debiting the customer account.

The Issuer host then debits the linked tag holder account and sends an SMS alert to the tag holder. It also sends the response message to the NETC system. Upon failing to send the response within the defined TAT (Turn-Around-Time), the transaction is considered as Deemed Accepted. The response is then notified to the acquirer host for notifying the respective toll plaza system.

FASTag is LIVE! Buy, Activate, Recharge, & More Info

FASTag

Introduction: The Policy Brief

The National Payments Corporation of India (NPCI) and National Highways Authority of India (NHAI)-introduced National Electronic Toll Collection (NETC) mechanism, FASTag – having an embedded chip and antenna – is now live. Operational at 604 toll plazas across national and state highways (click here for the full list), w.e.f. 15 Dec. ’19 (although initially the roll-out of FASTag was scheduled for 1st Dec. ’19 – per the letter sent by the Ministry of Road Transport and Highways to the NHAI), FASTag enables automatic collection of toll charges. The government then decided to provide enough time for vehicle owners to switch to FASTags – hence the deferred extension.

Dubbed to be the leading disruptor on India’s national highways, FASTag was first envisioned in 2014. All cars, jeeps, vans, buses, trucks and, commercial and private off-road vehicles that pass the toll booths on national highways will now pay FASTag-enabled toll. The FASTag payments at national highways are incentivised with a cash-back scheme of 2.5% – for eligible customers – until March 31, 2020. FASTag is also poised to facilitate seamless traffic monitoring and fitting policy revisions.

Previously, only a single hybrid lane was to be allotted at every toll plaza having FASTag and other modes of payment – facilitating passage and monitoring of over-dimensional or over-sized vehicles. Depending on the traffic situation at high-traffic volume fee plazas, not over 25% ‘FASTag lane of fee plaza’ were planned to be temporarily converted to hybrid lanes – per the instructions given earlier by the ministry to the NHAI.

At this stage, it was to be ensured that the minimum number of the declared FASTag lanes be converted into hybrid lanes for the time being. Further, a minimum of 75% lanes of every fee plaza were to remain declared and operational as FASTag lanes so as to incentivise the vehicles carrying FASTag.

The One Nation One Tag – FASTag ensures interoperability via cashless electronic processes at toll booths. According to the Memorandum of Understandings (MoUs) that the states and the highways authority signed, the states’ are poised to receive 50% of the capital expenditure (capex) for the toll infrastructure construction.

Buying FASTag

Buying FASTag is possible by visiting any of the Point-of-Sale (PoS) locations at Toll Plazas or PoS outlets of the NETC Member Banks or their distribution agents or their Sales offices. Otherwise, FASTag can also be availed by applying online at the respective issuer bank’s website or by visiting this NHAI portal link. If you have bought FASTag from Amazon, you will need to download the MyFASTag App and link it to your bank account.

Activating FASTag

  1. Do-It-Yourself Activation: FASTags don’t have banks assigned in advance as they are (bank) neutral at the time of buying from a POS terminal or online platform. The online FASTag can be activated by yourself when you enter vehicle details in the ‘My FASTag’ mobile app. There also exists the flexibility to link the FASTag with any of your current bank accounts via the My FASTag Mobile app. The NHAI Prepaid wallet facility is also offered in My FASTag mobile app for you to load money and get your toll fee debited from the prepaid wallet as against getting it debited from your bank account directly.
  2. Activation by Certified Bank Branch: Alternatively, you can also buy FASTag at the closest certified bank branch and can then link the FASTag with your current bank account.

Document Submission for FASTag

A customer is required to submit the following documents along with the application form for FASTag:

  1. Signed FASTag application form, given by issuer bank that customers must fill and submit to the bank.
  2. Registration Certificate (RC) of the vehicle.
  3. Passport size photograph of the vehicle owner.
  4. KYC (Know Your Customer) documents as per the category of the vehicle owner.
  5. A valid driving license.
  6. Vehicle image (optional).

Recharging the FASTag

Recharging the FASTag account is possible in the denomination of Rs. 100. The maximum amount of recharge is decided depending on the type of vehicle and account link to FASTag. In case the FASTag has previously been linked with your bank account, loading money individually in a prepaid wallet will not be necessary. Although, maintaining enough balance in your FASTag-linked bank account to allow for toll payments is necessary. NHAI prepaid wallet can be recharged via different channels, viz. payment via cheque or via UPI or debit card or credit card or NEFT or Net Banking.

  1. Limited KYC FASTag account holders can’t have a balance of over Rs. 20,000 in their FASTag prepaid wallet. The monthly reload limit is Rs 20,000.
  2. In full KYC FASTag account holders aren’t permitted to have over Rs. 1 lakh in their FASTag prepaid wallet (no monthly reload cap exists).

Recharging a FASTag via the BHIM UPI app is also possible – although, buying FASTag via the BHIM UPI app isn’t possible.

Know FASTag – The NextGen Smart Electronic Toll Collection System

NHAI (National Highways Authority of India) has introduced FASTag – a program for Electronic Toll Collection (ETC) on Toll Plazas on National Highways. FASTag is a simple to use electronic toll collection system. FASTag is a refillable tag that allows automatic deduction of toll charges – making it swift to pass the toll plazas. The Indian Highways Management Company Limited (IHMCL – a National Highways Authority of India incorporated company) and National Payment Corporation of India (NPCI), are executing the FASTag program in cooperation with the Toll Plaza Concessionaires, FASTag Issuer Agencies, and Toll Transaction Acquirer (certified banks).

FASTag

With FASTag, stopping for the cash transaction at toll plaza is now passé. Linked to a prepaid account that is used for deducting the applicable toll amount, the FASTag uses Radio-Frequency Identification (RFID) technology. It is affixed on the windscreen of the vehicle after activating the tag account. Touted to be a fitting solution to make the hassle-free trip on national highways a reality, FASTag is currently operational at 180 toll plazas across national and state highways of India.

FASTag, currently, can be bought from official Tag issuers or (22) certified Banks via various channels like Point-of-Sale (POS) at National Highway toll plazas, and even on the e-commerce platform, Amazon. Having a validity of 5 years, after purchasing FASTag, you will need to recharge or top-up it only as required. It offers an almost non-stop movement of vehicles all the way through toll plazas. The convenience of FASTag-enabled cashless payment of toll fee with nation-wide interoperable ETC Services has numerous advantages.

The FASTag benefits are as follows: 1. Saves Fuel and Time. 2. SMS alerts for toll transactions, low balance, etc. 3. Online recharge (via Credit Card / Debit Card / NEFT/ RTGS or Net Banking). 4. No need to carry cash – ease of payment. 5. Web portal for customers. 6. Reduced air pollution. 7. Reduced use of paper. 8. Minimised instances of toll payment hassles. 9. Enhanced highway management via analytics. 10. Toll plaza management made easy. 11. Eased central monitoring.

FASTag adoption was initially voluntary. However, starting 15th December 2019, FASTag adoption is mandatory – it’s applicable to all categories, kinds, makes and types of vehicles. FASTag is useable for as long as they are legible at the toll plaza and are not tinkered. However, it should be noted that using one FASTag is possible only for one vehicle.

GPFI 2019 Japan: Elderly Financial Inclusion & India

The Global Partnership for Financial Inclusion (GPFI), launched in 2010, carries the mission of ensuring comprehensive financial inclusion. The platform for the G20 countries, non-G20 countries and pertinent stakeholders also aims to execute the G20 Financial Inclusion Action Plan (readied at the G20 Summit in Seoul). The Germany GPFI Presidency in 2017 was held with the theme, “Sustainable and Responsible Financial Inclusion of Forcibly Displaced Persons.” In 2018, the Argentina GPFI Presidency was held with the theme, “Building Consensus for Fair and Sustainable Development.” Building on the German and Argentina themes, in 2019, the Japan GPFI presidency fulfils the troika (of immediately preceding, present, and future presidency nations) of GPFI partnerships with the theme, “Aging and Financial Inclusion.” The G20 Leaders’ Summit 2019 will be held on June 28 – 29 in Osaka, Japan. Financial inclusion is essential for elevating livelihoods of the deprived and the elderly population. Continue reading “GPFI 2019 Japan: Elderly Financial Inclusion & India”

India on the World Bank Global Findex

The World Bank Global Findex

The Bill & Melinda Gates Foundation-funded Global Findex (GF) database is the benchmark for “Measuring Financial Inclusion and the FinTech Revolution.” Published first in 2011 by the World Bank (WB), the Global Findex is the comprehensive global database depicting the adult behaviour pertaining to saving, borrowing, payments, and risk management. The Global Findex data is collated in association with Gallup, Inc. (a global analytics and advice firm), comprising detailed survey insights of over 150,000 adults in 140 economies. The latest Global Findex is the 2017 edition (published in April 2018), including revised indicators on reception to and utilisation of official and casual financial services. Also included is the new data on the utilisation of FinTech (mobile phones and the internet to initiate financial transactions).

Continue reading “India on the World Bank Global Findex”

FinTech Valley: The Vizag Agenda

FinTech Valley Vizag (launched in Visakhapatnam on 17 December 2016) is a global FinTech Ecosystem focusing on converging finance and technology for generating massive growth prospects via industry facilitators, exceptional infrastructure, and innovative entrepreneurship. It is an ambitious initiative of the Government of Andhra Pradesh (India) to endorse business infrastructure, and draw investors and MNCs to open offices in the state. In September 2016, the Chief Minister of Andhra Pradesh released the ambitious document titled ‘Sunrise Andhra Pradesh Vision 2029’ carrying the blueprint of the growth trajectory for the state.

Endeavouring to be a “happy and globally-competitive society” by 2029, the Andhra Pradesh state, as stated in the vision statement, envisages transforming into an inclusive, accountable, and competitively innovative society. Initiating structural transformations and committing to sustain high economic growth, the state government of Andhra Pradesh placed FinTech as the epicentre of focus to create an ecosystem of digital banking, financial analytics, cybersecurity, and blockchain (database) technology. Among the various promising initiatives taken under the auspices of the FinTech Valley Vizag, the two initiatives pertaining to the FinTech ecosystem are: 1. The Andhra Pradesh – Purse mobile wallet offering 13 mobile banking and 10 mobile wallets for transactions. 2. The Marpu Nestam—an incentivised setting of agents for educating people on digital financial literacy.

Following the FinTech Spring Conference (March 2017) and Blockchain Business Conference (October 2017), the successful 5-day Vizag FinTech Festival (22—26 October 2018) directed towards GovTech (technological advances fostering invisible government, visible governance), BankTech (future of banking, investments and payments), InsurTech (technology enablers in insurance), EmergeTech (emerging technologies: AI, Cybersecurity, Blockchain, IoT, & Big Data), and Financial Inclusion (increased access to financial services for the underserved) was organised to set the good governance and inclusive growth agenda right for 2022. According to J.A. Chowdary, Special Chief Secretary & IT Adviser to the Andhra Pradesh government, under the auspices of the Vizag FinTech Festival, 25 out of a total of 40 startups were shortlisted for participating in the finale of $1-million FinTech Challenge.

Notably, the Andhra Pradesh government’s accord with FinTech Association of Hong Kong is aimed at utilising Hong Kong’s FinTech ecosystem and developing an Andhra Pradesh—Hong Kong entrée for FinTech startups and knowledge transfer.

Given the incumbent and future ambience of FinTech ecosystem in India—with 1 billion smartphone users by 2020, FinTech market projected to reach $2.4 billion, 600+ operational FinTech startups, massive growth potential in digital banking, government support (Startup India initiative), and a CAGR of 22%—such promising initiatives like the FinTech Valley Vizag should also be modelled in other promising IT & Financial hub states such as Karnataka, Maharashtra, and Gujarat. An entire ecosystem of such promising initiatives can lead to winningly achieve the aspired financial inclusion objectives. This milieu can make the dream of India ideally transforming into a digitally smart nation a resounding reality.

RBI & the Central Bank Digital Currency

Paper and metal printed currencies often referred to as “fiat money, is a government-issued currency that is not backed by a physical commodity, such as gold or silver”—Investopedia. Digital currency is essentially a form of intangible currency offered in digital form. It makes possible immediate transactions and ownership transfer across geographies.

The good old paper currency has been in vogue since long, with the stability of the respective governments maintaining its value. It is worth noting that it is not possible to convert these paper currencies. The central banks have also often been expressing their concern in regards to printing costs and management of paper and metal currencies.

As an alternative, of late, the Reserve Bank of India (RBI), following consultation with the Monetary Policy Committee (MPC), had expressed its intention of issuing a central bank digital currency (CBDC). For the same reason (as informed in the Reserve Bank’s Annual Report 2017-18), an interdepartmental group was formed to study and offer consultation on the requisites and viability of launching a centrally backed (fiat) digital asset. The logic, as stated by the RBI, was to control and minimise the elevating cost of printing paper (fiat) currency. Paradigm shifts experienced lately in the payments industry has directed the interests of the central banks to act proactively in this sphere. RBI opines that a (fiat backed) digital currency will, apart from minimising its bills of printing paper currency, also place the economy in a global spotlight of the digital currency world.

However, all of this is easier said than actually done. The banking watchdog realised later that the user-dependent value of cryptocurrencies and the volatile nature of it pose an imminent risk in using it as value storage or exchange medium. Entrusted with the task of ensuring enough safeguard for the investor community and protection of the consumers, RBI also acknowledged the cryptocurrency market bubble possibilities. This retreat was also an outcome of the ban on cryptocurrency exchanges in India imposed by the RBI. What followed this was the phase when the RBI totally cancelled (as reported by the Hindu Business Line) its idea to launch a CBDC.

Experts opine that RBI’s of late distrust (postponement of issuing a national cryptocurrency) for central bank digital currency also emanates from the limited comprehension of the cryptocurrency economy. For this, as suggested by industry practitioners, it is crucial to monitor the maturing sphere of the peer-to-peer economy. There is also a dire need to first prepare a comprehensively meticulous policy development framework for digital currency and blockchain technology (the facilitator of digital cryptocurrency).

India in the Global Microscope for Financial Inclusion 2018

Introduction

The Global Microscope report released periodically by the Economist Intelligence Unit gauges the enabling environment for financial inclusion (furthering the objectives of the Sustainable Development Goals) considering 5 diverse categories (government and policy, stability and integrity, products and outlets, consumer protection, and infrastructure) and 55 countries. The 2018 research report witnessed the model development of the key enablers of financial inclusion. It also saw the inculcation of the indicators on digital financial services to the research methodology. The Global Microscope report essentially discusses the key growth topics of the developing economies: consumer protection, enabling environment, financial inclusion strategy, policy, regulation, and government initiatives, and trends. The Microscope assesses the regulatory and policy environment to which the key players in the financial inclusion domain are exposed to: banks, NBFCs, digital money issuers, and cross-border payment companies. The vital contributions of inclusive insurance, financial agents, FinTech firms, and credit information companies (CICs) are also examined.

Continue reading “India in the Global Microscope for Financial Inclusion 2018”