The MTA is locked in a battle with the Trump administration over congestion pricing, but a substantial portion of the revenue generated from this initiative is eroded by interchange fees charged by banks and payment companies. These fees apply to all transit transactions, not just those related to congestion pricing, leading to losses in the hundreds of millions of dollars. Despite the financial strain, the MTA has not clearly disclosed these costs, severely affecting its budget and overall transit system funding.
Every time riders swipe their card for subway access, the MTA is hit by interchange fees that disproportionately impact transit revenues, totaling potentially hundreds of millions annually.
During a recent board meeting, MTA CFO Jai Patel revealed that the congestion pricing's first month brought $1 million in debit and credit fees, highlighting hidden costs.
The MTA, while pushing back against federal limitations to maintain its congestion pricing tax, is also facing significant losses from transaction fees collected by financial companies.
The interchange fee structure penalizes small payments like subway swipes with high transaction costs, making it essential for the MTA to reassess its funding strategy.
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