Transport systems around the world have moved towards a cashless model in recent years, with contact payment mechanisms coming to dominate.  Researchers from Portland State University explore the costs and benefits of maintaining some kind of cash acceptance in order to ensure transport is as accessible as possible.

While automated payment comes with many benefits for travelers and operators alike, they nonetheless require passengers to have access to smartphones, banking services, and private internet, which is something that is far from universal.  The researchers quizzed a few thousand passengers in Oregon and Colorado to understand those who may be excluded if cash options are removed.

Cash remains king

Despite the wide range of contactless options, cash was still the main form of payment for around 30% of passengers, with this particularly so among older and lower-income people.  Often this is due to a lack of smartphones, but even among those with the technology, concerns around connectivity are commonplace.

The researchers hope that the cost-benefit model they developed could be used by other transport agencies as they roll out new payment technologies.  The model incorporates both the capital investments required in the first year together with 10 years of operational expenses.

They then created four scenarios based on the feedback received and best practices achieved from across the country:

• Base—(No cash accepted anywhere)
• Scenario 1—No cash anywhere, adds retail network
• Scenario 2—Cash on board, not at TVMs, no retail
• Scenario 3—Cash only at TVMs, no retail
• Scenario 4—Cash accepted everywhere

“The heart of this cost-benefit model is, how many riders cannot ride under the different scenarios? We were able to study more than 2,000 riders, and, in the fully no-cash base case, we knew that about 8% of riders could not ride, based on our surveys. Their answers to how they would ride with different configurations of ticket vending machines and cash onboard informed this model,” the researchers say.

Mitigating the risks

In all of the scenarios, there were risks associated with going cashless, but they could all take steps to mitigate those risks.  The best scenario for any particular locality depends largely on how many people might be excluded by the transition to a cashless fare system.  There were some general principles that agencies can remember when deciding on the next course of action, however.

“When you’re looking at 10 different systems and you’ve got to justify to the board, the general manager, the community, why you’re spending money a certain way—it’s really helpful to have research like this that shows that the costs are not some huge amount. When equity is cheap to obtain, it’s really easy to justify doing that,” the researchers conclude.