It is estimated that close to 20% of all American households—40 million households, representing 80
million people—do not have basic bank accounts. An additional segment of the U.S. population is
composed of individuals who are considered to be underbanked. These underbanked individuals may
have a basic savings account with a financial institution but do not use more advanced financial services, such as checking accounts, loans, or retirement savings accounts. A number of different factors play a role in why many individuals are unbanked or underbanked. In addition to economic status, several studies have pointed out that there are issues of language, trust, privacy, availability of appropriate financial products, and the cost of services that play an important role.

These large segments of the population create challenges for transit agencies who are implementing
smart card-based automatic fare collection (AFC) systems. How do transit agencies provide the same
easy access for transit services to unbanked and underbanked riders, while also maintaining the benefits of reduced operating costs and improved efficiencies that AFC systems deliver in reducing the use of cash for fare product purchases?