Access for the unbanked—equity with electronic tolling and contactless transit payment

By Mary Ebeling
State DOTs are increasingly moving to all electronic tolling (AET) for roads and bridges. Transit agencies nationwide are also updating fare collection systems, and the trend is towards contactless, cashless fare payment. For both highways and transit these electronic payments often involve prepaid systems that are refreshed with debit or credit cards. However, a significant percentage of the U.S. population does not have a bank account, and this poses significant accessibility challenges to the transportation system. Nationally 1 in 13 households are unbanked, and in Chicago that number is 21 percent of CTA riders. To address equity concerns related to unbanked customers, DOTs operating toll facilities and transit agencies upgrading fare payment systems must accommodate users without access to bank accounts or credit cards.
For the agencies and system users, efficiencies gained by adopting these new technologies make sense from multiple perspectives. Automated tolling for highways improves travel times, reduces congestion at tollbooths, and save agencies money previously used for in-person toll collection. Transit agencies and riders experience improved interoperability among regional transit providers, speedier boarding, and faster trip times. When riders need not worry about running out of tickets or using up a multi-ride pass, the added convenience increases transit ridership. With the option to automatically refill cards, transit use is similar to always having a full tank of gas; the fare card is charged as long as your bank account has funds.
However, one challenge during rollout of AET related to tourist travel. Visitors to a state may not have an E-ZPass or other transponder to pay tolls. By using the license plate reader technology installed at tollbooths, toll agencies are able to identify and bill these travelers. Unlike unbanked customers, these visitors just want to use a credit card and be done with the transaction.
Tolling and transit agencies need to balance the cost of providing service to the unbanked over just writing off the costs of their use of the system. Most agencies decide to set up systems to accommodate the unbanked. Decisions on how to serve these customers include a variety of options. Some of the current strategies to account for unbanked road and bridge customers include cash payment networks at kiosks and cards that are re-loadable using cash at designated service locations. The San Francisco Golden Gate Bridge has implemented such a system to accommodate cash customers. Transit fare payment systems for the unbanked are developing as new fare systems are implemented. These strategies include prepaid fare cards and fare cards that can be reloaded at specified retail locations. As AET and contactless fare payment systems increase in numbers, operators and agencies will likely continue to innovate ways to accommodate unbanked customers in a cost-effective manner.
Mary Ebeling is a Transportation Policy Analyst at SSTI.