Unbanked Transit Riders and Open Payment Fare Collection

Document Type

Journal Article

Publication Date


Subject Area

economics - benefits, economics - operating costs, infrastructure - station, mode - bus, place - north america, policy - equity, technology - ticketing systems


fare collection systems, transit riders, minority ethnicities, unbanked users


Several transit agencies are considering accepting contactless credit and debit cards directly at turnstiles and bus fare boxes. By using the expertise and scale economies of the payments industry, agencies may reduce fare collection costs and improve regional interoperability and ease of use. One issue with bankcard-based fare collection systems is how to serve transit riders who do not have or do not want to use contactless bankcards. In this paper, based on Chicago, Illinois, data, discrete choice models of the likelihood of transit users to have credit and debit cards or to use alternative financial services such as currency exchanges are estimated. A significant fraction of transit riders in Chicago do not have credit or debit cards; these riders come from groups with lower incomes, lower levels of education, and minority ethnicities. To meet the needs of this unbanked group of transit users, agencies may accept cash fares, agency-issued cards, or payment industry-issued prepaid cards that can be loaded with cash at retail locations or in rail stations. These options serve unbanked users to varying degrees and with different costs to the agency.


Permission to publish the abstract has been given by Transportation Research Board, Washington, copyright remains with them.