Every card swipe pays a private toll.
Every way of paying costs the shop something. Here is roughly what a $20 purchase costs, and where that money goes.
Bars show cost as a share of the purchase, magnified 20x. Card and cash costs are typical estimates and vary by shop and bank.
Card payment vs. transit payment
Same tap at the register. What happens after is different.
| Credit card | Transit balance | |
|---|---|---|
| Who handles it | Card network, the rider's bank, the shop's bank and a processor | The agency's banking partner and a processor |
| How the money moves | Across card network rails between banks | A ledger entry between two accounts at the same bank |
| Shop pays | About 3% | 1% |
| Where the fee goes | Banks and card networks | 0.8% to local transit, 0.2% to the processor |
| Shop gets paid | In 1 to 2 business days | Right away |
Hong Kong has done this since the 1990s.
The Octopus card pays for the MTR and also works at restaurants, convenience stores and shops across the city. It charges merchants about half what credit cards do.
What it's worth in your city
Take a region's yearly retail sales, assume some share moves to transit payments, and give the agency 0.8% of it.
a year to the agency
Retail sales: US Census Bureau, 2022 Economic Census (QuickFacts), for the counties or city named. Budgets: each agency's most recent adopted operating budget (FY2026 or FY2027) where available. San Francisco and New York budgets follow the essay. These are rough ceilings: they count all retail sales in the area, including sales that would never move to transit payments.
What we're still figuring out
Today's fare platforms move money from riders to the agency. This needs rider-to-merchant transfers too. We're asking agencies and fare vendors how hard that is.
Agencies would need to approve business accounts and allow balances to be spent outside the system.
A shop needs a business transit account and a way for its checkout to accept the card. A retail reload network, which many agencies already want, is a natural place to start.