THE BUSINESS CASE FOR SMART CARDS IN PUBLIC TRANSIT SYSTEMS

The application of smart card technology to transit electronic payment systems offers many significant benefits and cost savings. This paper will describe the Business Case for smart cards in public transit. Specifically, the paper will: define the elements of a Business Case and a successful implementation strategy; summarize the categories of potential benefits and cost savings from smart card implementation; provide examples of benefits from planned smart card initiatives in several U.S. metropolitan areas; and discuss partnerships which could enhance the Business Case. Many transit operators in the United Sates are considering smart card technology as a way to upgrade their existing fare collection equipment. Smart cards will provide convenience to passengers, and cost savings, reliability and security to transit operators. Smart card technology will greatly facilitate regional fare integration, and can help advance intermodal service coordination. Partnerships with other operators and financial institutions could enhance the Business Case. Many transit authorities in the U.S. are exploring teaming arrangements with banks or credit card companies, who find the mass transit market very attractive. This paper will review the benefits possible with a successful Business Case, including: increased revenue generation; reduced operating and maintenance costs; increased convenience to customers; more flexible fare structures and marketing; improved ridership and operations data; improved throughput and reduced dwell times; and improved security to operators and customers.