Comment by kmeisthax
4 hours ago
Countries can build payment networks. It's doable. They already run central banks that facilitate payments, you use them every time you write a check. In Japan, they turned transit cards into a payment network. India and Brazil built smartphone payment apps and they're the most popular form of payment in their respective countries, to the point where USTR is shitting its pants about it.
The underlying issue is not if we can build the network (we can) but getting people to actually use it. For example, if we wanted to repeat the Japanese success of IC cards here, we'd run headfirst into the problem that our public transit networks aren't big enough to be a credible Visa/MC alternative:
- Most public transit systems large enough to issue their own fare cards and readers are also regional monopolies, because there's not enough transit demand to sustain multiple companies with different routes. If I'm in Pittsburgh, all the buses and trolleys are run by PRT. In the Wasatch Front, it's UTA. Those agencies have little interest in becoming banks; they operate the fare cards mainly to keep fare payment easy, and they don't need to coordinate with anyone because everyone already joined into a single large transit agency.
- Metro areas with multiple transit agencies often have political differences that make coordination difficult. For example, in Long Island, NY, Nassau County's NICE bus system had legacy Metrocard fare payment that wasn't upgraded to OMNY until a month or two before Metrocard was completely ripped out and shut down. A rare exception to this would be the San Francisco Bay Area where there is an insane amount of political fragmentation and somehow they all wound up taking Clipper.
- A lot of Americans just never touch trains or buses enough to actually need a transit card.
- A lot of transit agencies are just surrendering to Visa & Mastercard and taking credit cards now anyway, even though transit fares are exactly the kind of microtransaction that is ill-suited for those networks.
Ironically, the best bet for an American-run payment network would actually be to nationalize E-ZPass[0]. In fact, in 2008 Congress passed a bill specifically mandating a unified toll payment system, but nothing came of it because the bill had no actual teeth. The main problem with this idea is that E-ZPass transponders won't fit in your wallet; you'd have to launch a separate form factor for an "E-ZPass Card" and at that point you run into all the same problems I just mentioned with making a unified transit fare system.
[0] E-ZPass is an RFID transponder system for toll payment that is very well-adopted along the east coast.
> In fact, in 2008 Congress passed a bill specifically mandating a unified toll payment system, but nothing came of it because the bill had no actual teeth.
E-ZPass now has interoperability with the Central United States Interoperability Hub (which reaches as far west as Colorado and as far south as Texas). We're much closer to the point where you can drive anywhere with a single transponder than we were back then. The main thing missing now is California cooperating with anyone else.
I like the idea of my toll road account also being useful for public transit, if nothing else. But it's difficult to imagine toll road operators and public transit operators seeing a big incentive to cooperate in that way. Even though they're both "pay for transit," their intended/typical users are very different (people who can't/won't drive vs. people who not only drive but are privileged enough to pay for less traffic).
You know what’s funny is that, thanks to the interoperability, all of my family members have switched their toll transponders to the Illinois I-Pass because Illinois charges no monthly fees or additional surcharges and doesn’t care where you live or what state/country your car is registered. I’m sure there are other participating toll authorities with no fees, but all the places my family members live do.
So really, you only need one state to adopt your unified transit fee idea.
> I like the idea of my toll road account also being useful for public transit, if nothing else.
Halifax, NS used to have bridges where the toll transponders worked to pay for parking at the airport - super convenient. Alas, they've since removed the tolls on the bridges, so the transponders are now useless and traffic in the downtown is even worse.