Smart Card Alliance Transportation Council Examines Use of Prepaid Cards in Transit

Smart Card Alliance Transportation Council Examines Use of Prepaid Cards in Transit

PRINCETON JUNCTION, NJ, June 16, 2008–Transit agencies implementing smart card-based automatic fare collection (AFC) systems face challenges serving those who do not have credit or debit cards, nor checking or savings accounts, as these riders are limited to cash when obtaining, loading and reloading transit smart cards. A new white paper from the Smart Card Alliance Transportation Council examines how transit agencies can serve these “unbanked” or “underbanked” individuals, including both the traditional approach of establishing retail sales outlets for fare media and a potential new approach of using network-branded prepaid cards.

The white paper, “Serving Unbanked Consumers in the Transit Industry with Prepaid Cards,” is available for download at /activities-councils-transportation.

“Unbanked and underbanked households make up more than 20 percent of the U.S. population, so this is an important report for financial institutions and transit agencies to gain a better understanding of the various methods available for providing and re-loading fare media to this significant market segment,” said Randy Vanderhoof, executive director of the Smart Card Alliance.

The white paper answers the following questions:

  • What is the size of the unbanked market and what tools are available for transit agencies to determine the number of unbanked and underbanked consumers in their geographic region?

  • How do transit agencies serve the unbanked rider now? What have transit agencies learned from implementing retail sales networks to support transit product sale and reload for unbanked riders?

  • What are network-branded prepaid cards and how are programs implemented? How do prepaid cards differ from credit and debit cards?

  • What approaches could a transit agency use to work with the financial industry to offer prepaid cards to unbanked riders?

The white paper includes case study data from the San Francisco Bay Area TransLink® and the Washington Metropolitan Area Transit Authority SmarTrip® programs and details of the business structure and economics of prepaid card programs.

Participants involved in the development of this report included: ACS, MasterCard Worldwide; Metro/SORTA; Metropolitan Transportation Commission (MTC); MTA New York City Transit; Power2Process; Ready Credit Corporation; Washington Metropolitan Area Transit Authority (WMATA).

About the Smart Card Alliance

The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit