The unbanked – individuals who lack a bank account with a mainstream financial institution – are one of the more broadly disadvantaged groups in American society. There is a great deal of demographic overlap between the unbanked as a cohort and other marginalized groups, notably undocumented immigrants, low-income Blacks and Latinos and non-native English speakers. These groups are an important constituency for transportation agencies in that they are more likely to travel by transit than other Americans. As many transit agencies transition their fare payment systems to radio frequency identification (RFID)-based, “contactless” smartcard or open payment technology linked to a rider’s bank account, there are growing opportunities to enhance multi-modalism in passenger trips, reduce operations costs, increase system profitability, and expand access to fare payment media. However, due to equity requirements of the Civil Rights Act, transit agencies must ensure that the smartcard technology also accommodates the unbanked.

Ensuring that transit fare payment systems adequately serve the unbanked requires an assessment of New York’s unbanked population beyond that which is available in current academic literature. A 2011 study from the NYC Department of Consumer Affairs identified several New York City neighborhoods with the highest proportions of unbanked and underbanked residents. Through intercept surveys in two of these majority-unbanked neighborhoods – Fordham (Bronx) and Bushwick (Brooklyn) – this study attempts to clarify the travel behavior and fare payment characteristics of the un(der)banked. In addition, this study investigates potential fare policy alternatives in an open payment system that would adequately accommodate the transportation needs of the unbanked. To articulate policy recommendations to meet this objective, this study includes structured interviews with transit fare policy experts in the public, private and nonprofit sectors. These interviews explored how transit agencies can select the most appropriate fare payment technology; effectively partner with retailers and alternative financial services (AFS) to make its new fare payment medium accessible to un(der)banked communities; and establish performance metrics to monitor the fare payment system’s long-term equity.