Although fares are an important revenue source for transit systems, they are also expensive to collect. Agencies must provision physical cards, manage physical cash, and maintain fare machines in order to collect fares.
To reduce the cost of collecting fares, transit agencies are increasingly turning to open-loop fare payment systems. These systems allow users to use standardized payment methods such as credit cards and mobile payment apps directly at fare gates. These systems can reduce the need for agencies to manage cash and provision fare cards.
Washington Metropolitan Transit Authority (WMATA) recently installed open-loop fare payment systems which integrate Apple and Google pay into the fare payment system. Overall, WMATA estimates that adoption of these features will reduce costs associated with fare collection by $4.4 million dollars. However, after considering the cost of an incentive program to encourage adoption, WMATA estimates these savings will total $3.6 million dollars between fiscal year 2021 and 2029.