Open to Open-Loop: Payments Challenges for Public Transit

Open-loop payment systems accept credit cards, debit cards, and mobile “wallets”. For public transit open-loop payments do not require agency-specific fare media, can improve boarding efficiency, reduce idling times, and remove costs associated with tickets/cards and handling cash (Iseki et al., 2007; Zamer, 2018). Using survey data collected from 21 California transit agencies we find they have positive perceptions of open-loop payments and their ability to adopt these systems. However, they affirm there are challenges including technological complexity and equipment costs. We evaluate interest in assistance programs aimed at alleviating some of the challenges transit agencies face in implementing open-loop payments.