Of the E-ZPass program's many achievements and innovations, two stand out even today that represent how E-ZPass influenced the future of tolling and mass transit revenue systems —account-based customer relations and interoperability between multiple agencies.
Before electronic toll collection, toll patrons were completely anonymous. They just threw money into a coin basket or gave cash to a toll collector. When I paid my tolls, no one knew my name.
E-ZPass changed that with the introduction of an account-based payment system, creating the first true account-based "customer relations" in the toll industry. When I created an E-ZPass account and tied a payment source and tag to it, suddenly they knew my name and I became a real "customer."
That transition from anonymity to account-based customers followed not long after in the mass transit industry with the deployment of smart media. Transit agencies stepped up their one-to-one customer relationship efforts by enabling individuals to establish accounts and register their fare payment media, typically leveraging the advanced capabilities of closed-loop contactless smart cards systems. Two examples are the San Francisco Bay Area Clipper Card program and WMATA’s SmartTrip card.
The move benefits both riders, who get improved visibility into their fare payments and refunds on lost cards for example, and agencies, which gain opportunities for new revenues from targeted marketing and improved customer service from route alerts and other personalized communications.
Advances in payment card technology are accelerating that trend. Now it is possible to turn credit and debit cards into secure wireless payment devices. Bank-issued "tags," if you will. Now that the U.S. payments industry has committed to migrating to the EMV standard and putting a computer chip in all bankcards, it is likely that most if not all of these cards will include contactless payment capability.
Transit operators, already widely committed to contactless technology in their closed-loop fare payment systems, see this as an opportunity to significantly reduce or even exit the card issuance business by accepting contactless bank cards instead—the "open payment" model.
Moving to open payment, however, brings with it the need for account-based payment systems. Some transit agencies have already made this move, notably the Chicago Transit Authority’s new Ventra Card program. CTA, and its suburban bus operator partner Pace, have become the first large U.S. transit providers to accept open fare payment at rail turnstiles and on buses.
This trend, to use account-based systems, is the same threshold E-ZPass crossed 20 years ago.
Multi-agency interoperability is an equally enduring innovation. E-ZPass, while not the very first electronic tolling collection system in the United States, was the first multi-agency system covering a large geographic area.
Today, the opportunities for multi-agency interoperability are truly exciting for both tolling and transit operators. As the entire transportation industry moves into account-based systems, the possibilities for integrating payment accounts for different types of agencies and service providers across states or even regions is compelling. Linking multiple transportation providers together holds the potential to improve the quality of the customer experience, in part because all partners, large or small, can use the same customer relationship management tools. Financial risk is reduced, because a high level of security and auditing integrity can be built into the back office system, even while maintaining separate general ledgers and revenue apportionment rules for all parties. Implementation and operating costs can be reduced, and there is the potential for lowering transaction processing costs through aggregation and volume. Additionally, intermodal loyalty can be provided, where a toll customer could receive a discount if they use a transit park and ride, and use transit to complete their journey. The discount could be applied to the transit fare, the toll price, or both.