NHAI to go cashless: Toll plazas to accept only digital payments from April 1

The era of digging for loose change at highway booths is coming to a definitive end. The National Highways Authority of India (NHAI) announced on Friday that it is set to discontinue all cash transactions at National Highway fee plazas across the country from April 1, 2026. This move marks the final phase of India’s multi-year transition toward a fully digital tolling framework.

With FASTag penetration already exceeding 98%, the authority believes that the small fraction of remaining cash users is the primary cause of lane congestion and transaction-related disputes. By mandating digital-only payments, NHAI aims to turn “Ease of Commuting” from a slogan into a highway reality.

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Digital Sovereignty: The End of the Cash Lane

Since the introduction of FASTag, cash lanes have been progressively phased out. However, the upcoming April deadline will see the total removal of cash as a payment option. Commuters who do not have a functional FASTag will no longer have the choice to pay a cash penalty; they will instead be redirected to UPI-based payment systems integrated at every plaza.

The Penalty Structure: FASTag vs. UPI vs. Cash

The current fee rules are designed to incentivize the use of RFID tags. Under the Third Amendment Rules, 2025 (effective since November 15, 2025), the pricing is tiered:

Operational Gains: Why the Shift?

NHAI’s plaza-level assessments show that even a single cash transaction can delay a lane by several minutes during peak hours. By switching to a 100% digital model, the authority expects:

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• Improved Lane Throughput: Faster vehicle processing per minute.

• Reduced Idling: Lower fuel consumption and carbon emissions at plazas.

• Transparency: Elimination of “change-related” disputes and manual accounting errors.

Reality Check

The shift to 100% digital sounds seamless. Still, connectivity “dark spots” on remote highways can make UPI transactions fail. Therefore, while the urban plazas are ready, the reliability of digital payments in rural stretches remains a concern. In fact, if the UPI server or the local network goes down, the “fully digital” plaza could face a total gridlock without a cash fallback.

The Loopholes

The 1.25x UPI charge is a “convenience loophole” for those who refuse to get a FASTag. In fact, by paying just 25% extra via UPI, some users might find it easier than maintaining a pre-paid FASTag wallet. Therefore, while cash is dead, the UPI-penalty loophole might still prevent 100% RFID adoption. Still, the overloading penalty—currently paid largely in cash—remains a major hurdle that the government is still working to “rationalize” into the cashless system.

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What This Means for You

If you are a frequent traveler, the message is clear: Check your FASTag balance today. First, ensure your tag is not on the “blacklist” due to low balance or KYC issues. Then, link your UPI app to a reliable bank account as a backup; from April 1, it will be your only “on-the-spot” alternative if your tag fails.

Finally, realize that the 1.25x UPI fee is still a penalty. You should set up “auto-top-up” for your FASTag to ensure you always pay the 1.0x base rate. Before your next long drive, verify your tag’s placement on the windshield; improper placement can cause scan failures that lead to the higher UPI charge.

What’s Next

NHAI will begin a nationwide awareness campaign in March 2026 to prepare users for the transition. Then, “Help Desks” will be set up at major plazas to assist cash-reliant users in setting up UPI or purchasing new tags. Finally, on April 1, 2026, the “Cashless Highway” policy will officially go live across all 1,150+ toll plazas in India.

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