Modernizing fare payment without leaving any riders behind

August 10, 2022

Contactless fare collection can remove roadblocks faced by un- and underbanked riders while helping transit agencies deliver a better, safer, and more cost-effective service experience.

More and more transit agencies are exploring the contactless payment options riders demand but switching to contactless means considering how to give un- and underbanked riders easy access to the transit systems they use every day.

Contactless payment options for goods and services took off during the pandemic as consumers and businesses looked for safe, effective alternatives to face-to-face contact. Post-pandemic, transit agencies want solutions that protect the health and safety of both riders and operators but that also address the needs of diverse populations who have no or limited access to traditional banking services.


According to the FDIC1

  • 22 million Americans are unbanked, with no access to checking or savings accounts
  • 61 million Americans are underbanked—they have bank accounts but rely heavily on money orders, check-cashing services, and payday loans.

Mobile access and contactless payments remove boundaries.

Some of the un-and-underbanked may face roadblocks to mass transit. They may deal with language barriers that complicate face-to-face or kiosk ticketing, a lack of cash to buy traditional pre-paid transit cards, and unpredictable work schedules that make prepaid or monthly transit cards a waste of money. Mobility drives economic growth—that’s why transit agencies and local governments are looking for smart ways to simplify and streamline the collection of fares for themselves and the riders they serve.


The move to open loop offers access, flexibility, and convenience.

According to the American Public Transit Association (APTA), more than 150 major cities are considering migrating from closed-loop to open-loop transit systems.2 Open-loop systems accept card-based and digital mobile payments including contactless (tap-based) credit/debit cards, prepaid debit cards, app-based wallets such as Google Pay, and peer-to-peer accounts such as Venmo. A recent article on highlights mobile payment trends among the unbanked, calling out that 81% of US consumers own smartphones and use them to make mobile payments. 2


Un-and underbanked open to tap-to-pay.

As post-Covid mass transit usage returns to pre-pandemic levels, travelers are ready for a smarter way to ride. Researchers surveyed 200+ un-and underbanked passengers in the Davis-Sacramento-Woodland area of California to gauge their willingness to use digital payment tools, such as contactless cards, and smartphone-based apps. The results were impressive. More than half of respondents would be open to paying with a prepaid debit card or a prepaid government-issued debit card, and about a third are open to paying with a mobile phone.3 If you’re considering contactless transit payments that provide fair, accessible options for un-and-underbanked populations, request our e-book and learn more today.

"Contactless EMV payment solutions provide tremendous benefits to unbanked and under-banked transit customers.” says Adam McGavock, Business Development Manager.  “In addition to safety and convenience, fare capping functionality allows them to enjoy the cost benefits of pass products without the initial investment."


Tap-to-pay contactless cards make riding simple for everyone.

From grocery stores to gas stations, tap-to-pay is a familiar concept that people enjoy using. People already know how to do it, so there are no roadblocks to adoption, even among the elderly or the tech-averse who may be unwilling to download apps or recharge wearables. Bringing this familiar payment option to public transit means that riders can tap and go where, how, and when they want.


Interested in learning more about how tap-to-ride contactless solutions can help optimize costs while offering passengers a better experience? Download our ebook or contact us to discuss creating a contactless fare collection experience.

Related content

Navigate changing consumer behavior with service fees

ABCs of APIs: Drive treasury efficiency with real-time connectivity

Benefits of billing foreign customers in their own currency

Improve government payments with electronic billing platforms

Payment industry trends that are the future of POS

5 Ways to protect your government agency from payment fraud

Government agency credit card programs and PCI compliance

Post-pandemic fraud prevention lessons for local governments

3 benefits of integrated payments in healthcare

3 ways to make practical use of real-time payments

White Castle optimizes payment transactions

Webinar: CSM corporation re-thinks AP

Unexpected cost savings may be hiding in your payment strategy

Want AP automation to pay both businesses and consumers?

Ways prepaid cards disburse government funds to the unbanked

Three healthcare payment trends that will continue to matter in 2022

Restaurant surveys show changing customer payment preferences

Restaurant surveys show changing customer payment preferences

Increase working capital with Commercial Card Optimization

Modernizing fare payment without leaving any riders behind

4 benefits to paying foreign suppliers in their own currency

3 reasons governments and educational institutions should implement service fees

Tap-to-pay: Modernizing fare payments pays off for transit agencies and riders

Understanding and preparing for the new payment experience

How Everyday Funding can improve cash flow

Access, flexibility and simplicity: How governments can modernize payments to help their citizens

Automate accounts payable to optimize revenue and payments

Automate escheatment for accounts payable to save time and money

Escheatment resources: Reporting deadlines for all 50 states

Higher education and the cashless society: Latest trends

How to improve digital payments security for your health system

Work flexibility crucial as municipalities return to office

Overcoming the 3 key challenges of a lump sum relocation program

P2P payments make it easier to split the tab

How to accept credit cards online

How real-time inventory visibility can boost retail margins

When your spouse has passed away: A three-month financial checklist

6 timely reasons to integrate your receivables

Webinar: CRE technology trends

Managing the rising costs of payment acceptance with service fees

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

How jumbo loans can help home buyers and your builder business

How to apply for a business credit card

Rethinking common time management tips

Checklist: What you’ll need for your first retail pop-up shop

Streamline operations with all-in-one small business financial support

Dear Money Mentor: How do I begin paying off credit card debt?

3 awkward situations Zelle can help avoid

How to save money in college: easy ways to spend less

Top 3 ways digital payments can transform the patient experience

Hospitals face cybersecurity risks in surprising new ways

Webinar: AP automation for commercial real estate

Myth vs. truth: What affects your credit score?

Dear Money Mentor: How do I set and track financial goals?

Tips for navigating a medical hardship when you’re unable to work

How mobile point of sale (mPOS) can benefit your side gig

Webinar: Robotic process automation

Hospitals face cybersecurity risks in surprising new ways

Enhancing the patient experience through people-centered payments

Digital trends poised to reshape hotel payments

Unexpected cost savings may be hiding in your payment strategy

Colleges respond to student needs by offering digital payments

Luxury jeweler enhances the digital billing and payment customer experience

How Everyday Funding can improve cash flow


Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.