State tolling agencies are increasingly adopting prepaid cards in their efforts to eliminate cash and coins at toll booths.

"Cash lanes … are expensive to manage, cause congestion… and there are carbon, environmental issues," said Michael Herold, vice president of  business development for tolling and transit at InComm.

Historically tolls have been paid either with cash or a transponder such as E-ZPass, which draws funds from a linked credit card and is scanned when motorists drive through a tolling station. Consumers usually deposit between $30 and $50 onto the transponder's account, and that account is topped up automatically when funds get low.

With cash lanes being phased out, consumers who preferred cash or didn't have a credit card were losing access to toll roads, said Herold. Another group of consumers, those who want to budget travel expenses and "weren't comfortable giving the tolling agency carte blanche to pull money from their credit card" were also irked by the options available to them, he said.

Plus tolling agencies started charging cash-based consumers more than those using transponders.

So InComm began partnering with state tolling agencies with what it describes as the "iTunes card for toll ways," Herold said. InComm provides a closed-loop, reloadable card that can be purchased and loaded at retailer locations.

InComm's first project was the SunPass tolling card in Florida, which launched in 2012. In 2013, InComm launched PeachPass in Georgia. And recently Virginia launched the VDOT tolling card using InComm's services.

When consumers first purchase one of the tolling kits they receive a prepaid card that can be used with a transponder. After purchasing, consumers need register their transponder online or by phone and link the prepaid card to it. The fee for loading and reloading the account varies by state.

In Florida, InComm is processing approximately 2,000 transactions per month, with the average load just over $30, said Herold.

In Georgia, adoption was slow at first, but the tolling agency launched an advertising campaign with radio, billboard and newspaper ads in July and then saw triple-digit growth week-over-week for some time, Herold said.

"Tolling agencies don't have huge marketing budgets," he said. "It's challenging to educate the consumer…but if the consumer is aware of the product and understands the benefits they'll use it and continue to use it."

The new program in Virginia has been advertised in stores. The state and InComm launched the product at a small gas station chain, PitStop, about three weeks ago. In 60 days there will be about 700 locations selling the prepaid tolling card, said Herold.

InComm is speaking with other tolling agencies around the country about developing a similar prepaid tolling account, said Herold. InComm will waive upfront development costs if agencies sign a three-year contract, he said.

The federal government has also been pushing states to remove cash lanes at tolling stations. It is also encouraging a move towards a national interoperable system.  While an interoperable system is likely three to five years away, Herold said, InComm would like to be the provider of that national system.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry