Toll roads must to serve unbanked customers far into the future


Financial success with all-electronic tolling (AET) becomes easier to achieve as electronic toll collection (ETC) participation increases. When toll operators contemplate AET operations, they work to understand what the ETC participation rate is expected to be, and then they work to understand how to increase it further.

Toll operators also have to understand the customers. They include infrequent and temporary customers on work travel or vacation. There are video-based strategies for these customers: billing-by-mail, of course, rental car agreements, and temporary pay-as-you-go credit-card based accounts, all with the backstop of the threat of descent into violation enforcement hell if tolls are not paid.

And then there are the unbanked and underbanked customers – the people who go to check cashers and pay day lenders for alternate financial services, and generally run their lives on a cash basis without credit or debit cards.

Some toll operators have made provisions in urban areas to provide payment channels such as cash cards or payment center kiosks for unbanked customers, but these have not yet been widely adopted.

Tolling used to be considered an elective choice, paying a premium toll for a premium product. If a driver has no choice but to use a toll facility, and no choice but to have an ETC account, then this does not feel very elective. The specter of a large violation fine is not attractive to anyone, but it is particularly worrisome for the unbanked/underbanked and those with limited resources, who need to drive for their livelihood.

According to research by Lisa Servon presented in her new book, The Unbanking of America, it appears that this market segment is not going away soon. In her book, Servon states: “In 1990, check cashers processed US$45bn in check-cashing transactions. In 2010, that number was US$58bn. Payday lenders handled US$10bn in 2001, and in 2012 that number increased to nearly US$30bn.

As more toll highways become a mandatory part of work life, this market segment must be accommodated.

The Central Florida Expressway Authority (CFX) in Orlando is experimenting with E-Pass Reload Lanes to accommodate these customers.

E-Pass is the CFX home agency brand name for electronic toll accounts. Reload lanes are former cash toll lanes in which a driver can pull up and make a payment on an account or acquire a new transponder.

Cash toll collection lanes are not very busy these days, as over 85% of traffic is paid with electronic tolls. They generally sit idle, out of the way, and represent real estate waiting to be repurposed. Reload lanes might be that best repurposing.

The public response has been favorable and the lanes are well used so far. If CFX ultimately decides to discontinue cash toll collection, it would be able to recycle some legacy toll plazas into drive-up customer service center lanes. These would be ideal for underbanked/unbanked customers as a convenient location to top up accounts with cash, enabling these drivers to maintain their E-Pass accounts and gain the advantages of E-Pass discounts, but without having a credit card on file.

I will watch this experiment and report on the results.

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