Toll when collected electronically in an attempt to eliminate the delay on toll roads is called electronic toll collection (ETC). Electronic toll collection debits the accounts of the owners of the registered cars without stopping. ETC alerts the system for the cars that have not been registered. Each car is equipped with a transponder. The transponder’s personalized signal would be picked when the car passes through an intersection. The information is passed on to the central computer and they would be charged accordingly. Types of electronic toll collection are single lane electronic toll collection and multi lane free flow electronic toll collection. Single lane system enables reduction in traffic congestion and increase in traffic throughput. Multi lane system helps achieve maximum throughput on the highway, keeps the traffic flowing and helps reduce the traffic congestion.

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Free flow of traffic, reduction in traffic congestion, elimination of the physical interaction with the system are some of the key drivers of the electronic toll collection. Electronic toll system is likely to fail in case of rain, dirt, fog, or moisture on tag. Furthermore, the tags can easily be duplicated. Complexity of the tag circuitry is raising the manufacturing cost which is holding back the growth of ETC market. ETC has brought about opportunities for revenue generation, increased safety, better environment, public transport improvement among others.