Transit agencies have traditionally used cash fare systems, but cash is expensive to transport, count, and guard. It can also be inconvenient for riders to have to pay an exact fare for each leg of a trip. For these reasons, many agencies have introduced automated fare media by expanding fare payment to electronic, magnetic stripe contact cards and more recently to
smart card is a contactless, reusable, prepaid card that includes an embedded microchip to monitor fare transactions and stored balance. Payment is processed through a microchip using [[near field communications]] or [[radio frequency identification (RFID)]]. Transit agencies view smart cards as a potentially revolutionary advancement due to their benefits, which include convenience, greater fare flexibility, operational cost savings, service enhancements, decreased fare processing time, centralized fare collection, more efficient fare pricing, and greater capacity for data compilation of ridership and travel behavior.
Several U.S. transit agencies have also deployed mobile ticketing solutions. They include TriMet, San Diego, Boston, and Dallas. Riders can install applications on their smartphones
==Types of Systems==
Automated fare media can come in a variety of formats and can even include credit and debit cards. One key point to remember is that there are two types of systems: open and closed. Open systems accept payment through fare media issued by an entity outside of the transit system, such as a bank or a university. Closed systems only accept payment forms issued by that system.
Transit system management of fare collection can be a costly endeavor and there may be some advantages to outside management of the fare payment system. However, with credit and debit cards, some of the advantages of prepayment will be lost.<ref name="tcrp32">[http://www.trb.org/main/blurbs/153815.aspx Fleishman, D., Schweiger, C., Lott, D., & Pierlott, G. (1998). “Multipurpose Transit Payment Media.” Transit Cooperative Research Program.]</ref>
== Interagency coordination ==
==Resistance to use of smart cards==
There are many reasons why riders would choose to use cash for fare payment rather than
smart cards or other prepaid fare payment. Reasons include the perception that the initial cost of obtaining the card will not be worth the investment, the fear of losing a pre-paid card’s value, concerns about [[Privacy Issues|privacy issues]], and the convenience of cash for the occasional rider.<ref name="tcrp32" />