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$17 Billion Parking Industry on Verge of Payment Revolution
January 13, 2006
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Princeton Junction, N.J., -- Americans have been looking for the right change to park their vehicles ever since 1935, and the parking industry has been seeking the most cost-effective and convenient collection method just as long. Both the $17 billion parking industry and the American public are about to experience a change of payment using smart card technology.

A new white paper, Smart Cards and Parking: A Smart Card Alliance Transportation Council White Paper, illustrates the changes taking place in the parking industry and the emerging role of smart card-based payment strategies. The paper also reviews the payment trends of the transit, financial and tolling industries, and their impact on the parking industry.

Smart cards already have considerable momentum in parking, and the report details the status of 30 U.S. programs, from Coral Gables, Florida to Portland, Oregon. The New York City Department of Transportation (DOT), for example, has been issuing contact smart cards to pay for parking since 1998, and has issued more than one million cards. According to industry estimates, at least 75 percent of the tenders for payment in 2004 and 2005 have required both coin and a contact smart card.

The paper points to two motivational reasons for the parking industry to change the current payment technology: the strong desire for a cashless payment and improvement in data collection in on-street parking equipment. According to the paper, the potential exists for the transit and parking industry to be able to leverage common standards, systems, technology and support infrastructure to ensure payment approaches are more cost-effective and add value for the consumer.

The paper addresses the following key points:

-- Identification of the market forces leading to the increased use of innovative electronic payment strategies in all transportation sectors

-- Discussion of the operational and customer benefits of smart card technology for transportation payment applications

-- Description of the current status of payment within the parking industry and the benefits that can result from leveraging the transit and financial industries' accomplishments in electronic payments

By participating in transportation industry initiatives, such as the Transportation Council, the parking, transit, tolling and financial industries can collaborate on projects and standards that can facilitate regional, and ultimately, national transportation payment networks.

In the transit sector, 9.6 billion mass transit trips were taken in 2004. In cities such as Washington D.C., Philadelphia, Atlanta, Los Angeles and New York, an estimated 15 million smart cards and over 20,000 payment processing devices will appear within the next two years with the introduction of this technology. This investment is helping to push the adoption of similar payment approaches in the parking industry.

Many key benefits are being achieved through the use of smart card technologies for parking, including improved customer service, increased revenues, increased operational efficiency, stronger controls and security, and expanding market opportunities.

"Smart card technology is on the move in more ways than one," said Randy Vanderhoof, executive director of the Alliance. "The technology behind the millions of new payment cards that consumers are beginning to use for fast, low value bank card transactions at fast food and conveniences stores is also available for card-based transit and parking payments. We thought it was an important time to provide a detailed view of how smart cards were being used in the parking, transit and financial sectors and discuss the potential for these systems to converge."

The white paper, written for executives and managers, is available at no charge from the Smart Card Alliance web site at http://www.smartcardalliance.org/.

 
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