Webinar Delves Into Transit Payment Systems that Benefit All Riders

On November 13, 2025, Transform convened a panel to discuss our report, Fair and Accessible Fares: Economic Justice in Transit. Report author Abibat Rahman-Davies was joined by Carl Sedoryk, CEO and General Manager of Monterey-Salinas Transit, Aaron Hirsh, Principal at Cities for Financial Empowerment Fund, and Greg Fair, Director of the California Digital Identity Program.

Watch the webinar.

A better path forward for the Bay Area

Rahman-Davies outlined the main points of Transform’s report, which highlights best practices for transitioning to open payments for fare collection. Paying with a credit or debit card, rather than loading money onto a Clipper transit card, could be a big benefit for low-income riders because they wouldn’t have to pay in advance. However, since MTC’s open payments system can’t currently accommodate fare discounts, many of the most vulnerable users will be faced with a choice of paying full fare or sticking with the prepaid Clipper card.

In addition, those without bank accounts or digital payment options can’t use the new system. Read the full report at the end of this post.

A different model for open payments: Monterey-Salinas Transit

Sedoryk described the path Monterey-Salinas Transit (MST) took to adopting open payments, some of which is described as a case study in Transform’s report. The agency serves a four-county area that’s largely rural; it’s a small operator with 160 buses and 3.5 million annual passengers, many of whom are low-income.

Sedoryk described his epiphany of using tap-to-pay at a local taco truck and deciding, if the food truck can do that, it was time for MST to adopt the system. The agency’s system includes a fare-capping feature where costs top out when a rider reaches the number of rides for a weekly pass; 40% of riders reach the fare caps. 

MST used multiple vendors and found it easy to add and update fare policies with the new system. This allowed it to do a promotion that gave money back to riders or allowed them to donate to charity. The system has seen an uptick in ridership of 50% since COVID but a 200% increase in contactless payments. 

MST has seen additional benefits from open payments. The contactless system has far fewer failures where the system doesn’t properly read the card, reducing administrative costs. One-third of violent incidents with drivers start with a fare dispute; making it easier to pay can reduce this. 

Only 13% of MST’s rides are paid for with tap-to-pay; riders still pay mostly with cash. But the machines that accept cash are prone to breaking down and costly to maintain. The operator hopes to go cashless by 2027, a move that will save $100,000 annually — enough to pay for two additional buses and the mechanics to maintain them. Before it does that, though, it needs to provide a closed payment system for those without bank cards or digital payments. MST is in talks to create a card that will work on other connecting systems as well.

The cost of maintaining fare systems is one more argument for free public transit; the savings will offset the lost revenue, and the increased ridership and reduced traffic congestion benefit everyone.

The costs of being unbanked

Hirsh noted the toll that being unbanked takes, including having no safe place for one’s money, the need to use expensive services like check-cashing stores, and difficulty accessing things like transit. He’s been working with transit agencies, including Monterey-Salinas Transit, to connect riders with BankOn-certified bank accounts.

Hirsh has a host of ways that transit agencies can help riders connect with banking services. For example, bank access could be built in to services that connect people with fare discounts. Or transit agencies and banks could offer a rebate where the first $50 someone spends on transit goes back into their new bank account. 

Increasing banking is a way transit agencies can improve the financial well-being of their riders while also reducing the burden on their systems.

Technology connects riders with fare discounts

Fair leads the Digital Identity Program at CalITP, which has been making big advances in digital verification for benefit eligibility, while protecting users’ privacy. He said identification shouldn’t be “the star of the show,” but something that people can easily use to access a service. 

To make verification easy, the state relies on systems people are already using, so they don’t have to create a new login. It also tries to leverage existing behaviors, because it’s hard to change behavior. 

But there are complications. Fair’s department has had to dig deep to find the right data sources to prove eligibility for different programs such as VA discounts. In addition, policies vary around the state for things such as what age makes someone a senior. Transit is a great testing ground to discover and work on these and other issues.

Fair described a move afoot to come up with unified definitions for things like senior discounts at transit agencies across California. CalITP is working to support different programs like the one at Monterey-Salinas Transit as they roll out.

In the end, new open payments technologies will give transit providers systems that are cheaper to build and easier to support while giving users data privacy and control. Transit benefits could even be a gateway to prequalify riders for other benefits, which could be a game-changer for people who struggle with burdensome paperwork. 

If you want to encourage the Metropolitan Transportation Commission to add fare discounts and other equity features to its Clipper 2.0 open payments system, sign this petition and read Transform’s report.