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How emerging payment channels will transform highway tolling

How emerging payment channels will transform highway tolling

3 min read


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Kyra Solutions

This article is sponsored by Kyra Solutions

Tolling agencies are about to again transform to better meet customer requirements, this time thanks to payment innovations accelerated by the coronavirus pandemic. Devang Patel, vice president of consulting and projects at Kyra Solutions, explains how these new payment channels can be incorporated into existing systems and why they are vital to the future of the highway tolling industry. 

What’s driving innovations in today’s payments sector, and how fast is change coming?

Changing consumer behaviors and technological innovations are driving payment sector changes. Consumers want contactless, mobile-based options to make it easier to pay vendors. Fintech firms are leading in innovations such as the digital wallet. And service providers are offering lighter weight digital payment options, making commerce possible for smaller vendors. Overall, the pandemic has accelerated the adoption of new payment channels. 

What are some of the most promising technologies? 

Devang Patel

Digital wallets, in-car payment options and mobile app-based payment options are gaining steam. In Melbourne, Australia, for example, the transit authority has launched a closed-loop mobile payment system based on Google Pay. Visa is experimenting with in-car payment systems to pay for everything from toll road charges to coffees. The National Highways Authority of India has created a roadmap for the launch of a satellite-based toll payment system that will use GPS, general packet radio service and vehicle tracking systems to track the movement of vehicles and charge the appropriate toll.

 Satellite-based tracking systems have the potential to allow the introduction of many new digital services. As reader (receiving device) range improves, these payment options can be leveraged in the tolling industry. Ultimately, they will reduce the need to equip vehicles with transponders. 

What impact might these changes have on tolling agencies?  

The result will be serving more customers and assuring revenue for agencies. There is also the potential for significant cost savings for agencies agile enough to adapt the most popular technologies. Imagine how operations would be streamlined if most payments were made automatically and transponders no longer needed to be allocated. And while call centers would remain, the time spent on billing issues could be reduced significantly. 

In the short term, these payment channels can complement existing ones, such as  transponder-based, image-based and cash payment vehicles. In the long run, these payment methods will dominate and agencies will need to adopt them to ensure excellent customer service and the continued collection of revenues. 

How can tolling agencies prepare for this sector shift?

Incorporating modular systems is key to being flexible, so an agency can quickly adopt new systems. By testing new products with customers, agencies can determine which are the best fit and provide the best value. In a still emerging technological space such as payments, solutions can change quickly, so it is important to be open to change and to create protocols by which the performance of new systems can be monitored.