2.6 Electronic Payment Systems

Electronic payment systems are used by transportation agencies for the collection of highway tolls, transit fares, and parking fees. Some public agencies in Europe have also demonstrated systems that go beyond transportation. For the purpose of presenting the benefits and costs of electronic payment systems, see Figure 2.6.1, modal applications are presented separately (i.e., electronic toll collection [ETC], transit fare payment, and parking fee payment) and multi-use payment is reserved for systems containing two or more applications of a different nature.

Electronic payment is currently characterized by the use of cards or transponders carried by the user that electronically communicate with devices maintained by the transportation agency, to conduct and record payment transactions. The transaction and transaction data are used in different ways, depending on how the payment system stores and tracks value. The transaction can deduct value from the user's prepaid system account (typical for ETC), or change the stored value amount held on the user's card (typical for transit). For single-agency systems, transaction data are used to reconcile internal agency accounts. For regional systems, they are also used to reconcile accounts with other agencies at a regional clearinghouse.

ETC supports the collection of payment at toll plazas using automated systems to increase the operational efficiency and convenience of toll collection. ETC systems operate as either integrated, multistate systems such as the E-Z Pass system, or single-state or single toll authority systems such as the Oklahoma Turnpike System. A great deal of coordination and upgrades is required for a single-state or agency toll authority to become integrated with other toll systems. ETC is one of the most successful ITS applications with numerous benefits related to delay reductions, improved throughput, and reduced fuel consumption and vehicle emissions at toll plazas. Studies have also documented increases in crashes at toll plazas with ETC, likely due to driver uncertainty regarding plaza configuration and speed variability between vehicles with and without ETC transponders. The most advanced ETC technologies can identify and process vehicles traveling at high speeds. This enables cars to travel on the mainline without having to slow down and negotiate tollbooths. Benefits of integrated systems are expected to be greater than those of non-integrated systems.

Transit fare payment systems can provide increased convenience to customers and generate significant cost savings to transportation agencies by increasing the efficiency of money-handling processes and improving administrative controls. Regional processing centers can consolidate financial information and streamline fare transaction management for multiple transit agencies. A transit fare payment system can be part of a closed system operated by a single transit agency, or after much coordination and upgrading, it can be integrated across multiple transit agencies, becoming part of a regional fare payment system. As with toll collection systems, benefits of integrated transit fare payment systems are expected to be greater than those of non-integrated systems.

Electronic parking fee payment systems can provide similar benefits to parking facility operators, simplifying payment for customers, while also reducing congestion at entrances and exits to parking facilities.

Multi-use payment is a category for integrated payment systems that can be used in two or more of the four following ways: transit, toll collection, parking, and participating merchants. Most examples of multi-use payment systems in the United States provide the capability to pay for some combination of transit fare, highway tolls, and parking fees. The E-Z Pass tag that is used for electronic toll payment in the E-Z Pass system can also be used for parking payment at New York City area airports. Other systems, most notably in Europe, may provide for purchases at nearby participating vendors or merchants. Multi-use payment capabilities can make transit, toll payment, and parking more convenient. Payment for bus, rail, parking, and potentially other public or private sector goods and services can be simplified by using electronic devices such as smart cards and transponder tags. Fare transaction processors access information on these devices and communicate account activity to a regional database. Centralized systems can track the location and activity of smart cards to help with highway, transit, and/or parking planning and operations, and limit unauthorized use of individual accounts.

Table 2.6.1 provides information on the benefits and costs of electronic payment systems. An assessment of the impact of these systems is indicated by using the symbols in the Impact Legend at the bottom of each page.

Table 2.6.1 – Benefits and Costs of Electronic Payment Systems

Toll Collection

Benefits
Goal Area	# of Studies	Impact	Example
Safety	2	-	In Florida, driver uncertainty about congestion at Express Pass (E-PASS) toll stations contributed to a 48% increase in accidents.[105]
Mobility	4	++	Implementation of the E-Z Pass system by the New Jersey Turnpike Authority (NJTA) reduced delay for all vehicles at toll plazas by 85%.[106]
Capacity/ Throughput	1	+	A study of ETC on the Tappan Zee Bridge in New York City showed an ETC lane could process 1,000 vehicles/hour (vph), while a manual lane could handle only 400–450 vph.[107]
Customer Satisfaction	1	?	Twenty percent of travelers on two bridges in Lee County, Florida, adjusted their departure times as a result of value pricing and electronic tolls.[108]
Productivity	3	+	Based on changes in traffic conditions after deployment of E-Z Pass, passenger cars on the New Jersey turnpike saved an estimated $19 million in delay costs and $1.5 million in fuel costs each year.[106]
Energy/ Environment	4	+/-	Model calculations of emissions using the EPA Mobile-5a model and traffic field data indicated ETC decreased CO by 7.3%, decreased hydrocarbons by 7.2%, and increased NOx by 33.8% at the Holland East Toll Plaza in Florida. NOx increased as a result of higher engine speeds.[109]
Costs
Unit Costs Database	Roadside Telecommunications subsystem Toll Plaza subsystem Toll Administration subsystem		See Appendix A
System Cost	The cost for the Oklahoma Turnpike Authority to operate an electronic toll collection lane is approximately 91% less than to staff and operate a traditional toll lane.[110]		Annual O&M cost: $16,000 per lane

Transit Fare Payment

Benefits
Goal Area	# of Studies	Impact	Example
Customer Satisfaction	3	+	Chicago, Illinois, transit riders participating in a pilot program rated convenience, rail use, and speed the most preferred features of the Smart Card electronic fare payment system.[111]
Productivity	3	+	The smart card electronic payment system in Ventura, California, saved an estimated $9.5 million per year in reduced fare evasion, $5 million in reduced data collection costs, and $990,000 by eliminating transfer slips.[112]
Costs
Unit Costs Database	Roadside Telecommunications Subsystem Transit Management Center subsystem Transit Vehicle On-Board subsystem		See Appendix A
(New) System Cost	The Central Puget Sound Regional Fare Coordination (RFC) Project features smart card technology that will support and link the fare collection systems of the major transit agencies operating in the Central Puget Sound region of Washington State. The cost of the RFC Project will be paid out during the 2003–2007 timeframe. The cost includes all vendor contract cost components, including equipment, equipment installation, fare cards, integration, and project management as well as other RFC Project administration costs, including sales tax, contingency fund, and project management team costs.[113, 114, 115]		Total project cost: $42.1 million (nominal) Average annual O&M costs: $3.28 million over first 10 years of project operation (nominal)
(New) System Cost	The Washington Metropolitan Area Transit Authority (WMATA) is expanding the capability of their SmarTrip© contactless smart card system by linking it to multiple bus and rail fare collection systems throughout the Washington, D.C., area. A Regional Customer Service Center (RCSC) will perform cross-jurisdictional management, distribution, and reconciliation tasks. The cost of the RCSC includes contracted services, central database, point-of-sale network and devices, and existing system software upgrades.[13]		Cost to deploy the RCSC: $25.537 million (2002–2003) Annual O&M cost (estimated): $3.45 million (2002–2003)

Multi-use Payment Systems

Benefits
Goal Area	# of Studies	Impact	Example
Customer Satisfaction	1	+	Three projects in Europe demonstrated the coordinated use of a smart card as a payment system for public transit, shops, libraries, swimming pools, and/or other city services. User acceptance and satisfaction with these systems was very high, ranging from 71–87%.[12]
Costs
Unit Costs Database	Transit Vehicle On-Board subsystem Transit Management Center subsystem		See Appendix A
System Cost	No data to report.

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