Implementation costs for universal fare card systems will vary depending on the size of the region, the number of transit agencies involved, and the existing fare collection infrastructure on each system. However, the evidence suggests that universal fare cards can actually be quite a cost-effective way to provide immense benefits to transit passengers. As discussed below, universal fare card systems allow participating transit providers to 1) share the operating and capital costs amongst themselves and 2) realize significant costs savings through administrative efficiencies.

Shared costs and economies of scale. Because universal fare card programs benefit multiple transit agencies and are usually led by the regional transit authority in the area, the start-up costs can be spread out among all the local participants while administration can be centralized at the regional level. For example, in the Puget Sound region, the current annual revenue for the region's transportation system is $97 million. The total project cost of the Puget Sound universal fare card system is estimated at $80 million for development, installation, shared and individual administrative fees, and the first 10 years of operation (for average operating and capitol costs of $8 million a year during the first decade). 

Interestingly, the Puget Sound system is flexible enough to allow other public transit providers in Washington, Oregon, and Idaho to eventually take part in the new system. As a result of this flexibility, these other transit providers that join at a later date, thus lowering each provider's share of ongoing annual operating costs. In addition, transit providers that join later could pay a one time 'buy-in' fee, thus helping to defray the initial start-up costs paid by the initial group of providers. (Adapted from "Smart Card Agreement Creates a Transportation System without Boundaries for Puget Sound Area" by the King Country Metro Department of Transportation.)

Cost savings and efficiency benefits. The US Department of Transportation's Intelligent Transportation Systems' (ITS) online 'Benefits and Costs Database' estimates that the Ventura County, CA universal fare card project will save $5 million in operating costs. After successful implementation, the smart card transit program in Manchester, England, decreased its data collection costs by approximately $1.5 million (US).