From Tap to Trust: How Tokenized Credentials and Agentic AI Are Revolutionizing Transit Payments—Q&A With Rahulkumar Chawda
Written by Winslow Schmelling CEO Today
September 2025
Transit systems, historically conservative with digital innovation, are accelerating change at a rapid pace. Public transportation is emerging as one of the most active proving grounds for intelligent, seamless payments. As financial interactions shift toward ambient payments that occur automatically in the background, the physical act of paying fades into the background. What remains is a frictionless, context-aware experience.
Powered by tokenized credentials and agentic artificial intelligence (AI), transit networks can do far more than collect fares. These systems learn from rider behavior in real time, automating fare enforcement, adjusting congestion pricing dynamically, and even curating personalized travel bundles based on how individuals travel patterns. Riders simply tap and go. Behind the scenes, the infrastructure adapts, optimizes, and protects the experience without demanding attention. This is no longer about catching up with retail or banking, nor is it simply a technological upgrade. Transit has become a definitive blueprint for next-generation trusted financial systems.
Rahulkumar Chawda has spent more than two decades in the digital payments space, focusing on building secure and scalable financial solutions that connect technology with business strategy. Over the course of his career, he has led global initiatives in transaction processing, tokenization, and API-driven ecosystems, including tokenization applications for digital wallets. He is recognized for transforming complex technologies into practical, trusted solutions that make commerce simpler, safer, and more inclusive. Chawda brings both analytical depth and technical expertise to his work, enabling him to approach problems from multiple angles and help shape the next generation of financial innovation. In this Q&A, Chawda explains how transit is setting the pace for composable, AI-driven payments that prioritize security, autonomy, and user convenience.
Rahulkumar Chawda
Q: What makes public transportation an ideal proving ground for intelligent payments?
Chawda: Transit is the perfect environment to pressure-test advanced payment systems. The sector sees massive transaction volumes, low-value payments, and a diverse user base of daily commuters, occasional riders, and tourists. All expect the same level of speed and convenience. That mix forces payment infrastructure to perform under conditions not found in many other industries. It’s vital for modern transit networks to manage dynamic pricing, such as fare capping, peak-hour surcharges, or seamless transfers between buses, trains, and bikes, all in real time without slowing down riders at the gate. They also need to secure every transaction, prevent fraud, and continue operating when connectivity drops.
Technologies like network tokenization and contactless payments have come a long way. They turn a phone, smartwatch, or even a car’s infotainment system into a secure transit credential. If a payment system can handle the speed, complexity, and risk profile of a busy transit network, it’s well on its way to succeeding in any high-volume, real-time payment environment, whether that’s retail, events, or urban services.
Q: How is agentic AI being integrated into transit, and what impact does this have on the industry and its users?
Chawda: Transit payments are shifting from a simple billing function to an integrated component of an intelligent, adaptive network. When agentic AI is combined with tokenized credentials, riders no longer need to stop, pull out a card, or manage a ticketing app. They simply tap their phone, watch, or card, walk through the gate, and continue with their journey. The real magic happens in the background.
Tokenized credentials ensure that systems transmit only secure, limited-use tokens, not raw card numbers, that are tied to a specific context. When paired with agentic AI, these tokens do far more than authorize fares. The system can automatically apply fare capping, select the most cost-effective pass for the rider, or adjust for congestion pricing in real time, all without rider input. The less riders need to think about paying, the more the system can optimize their journey and secure transactions.
Composable, AI-first payment architectures allow transit authorities to plug in or swap out capabilities, like fare calculation, fraud detection, loyalty, and token management, without rewriting the entire stack. This approach reduces downtime, optimizes resources, cuts costs, and improves responsiveness. According to McKinsey’s “Seizing the Agentic AI Advantage” report, organizations using these strategies increased productivity by 20% to 60% and reduced issue resolution times by up to 90%.
Intelligent transit payments also connect to broader smart city ecosystem. Tokenized credentials linked to secure, real-time APIs can unlock more than just a train gate. They can pay for bike-share, e-scooters, parking, tolls, and even event entry, all without the user having to juggle multiple accounts or apps.
Because the payment rails are secure and interoperable, they also integrate with smart traffic systems, congestion-pricing models, and energy management platforms. This is possible when payments are intelligent and context-aware. New York’s OMNY system already unifies contactless payments across subways, buses, and the Staten Island Railway. The vision is to extend that same tokenized credential into regional rail, airport transit, and municipal services, like parking or ferries. One secure tap could soon handle an entire day of mobility.
Q: What risks are associated with this evolution, and how are they being addressed?
Chawda: Agentic AI is only as powerful as the guardrails built around it. Granting AI access to payment systems without controlled, revocable permissions is risky. The future belongs to systems that balance autonomy with explainability and control, enabling them to act quickly within clear boundaries.
Tokenization is crucial to this balance. More than a security feature, it serves as the trust layer for the entire payment ecosystem. In transit and other domains, tokenization enables systems to remain fast, interoperable, and compliant while keeping sensitive data protected. It supports seamless, cross-channel, future-proof payment experiences, allowing the industry to focus on moving people, not managing card numbers.
From a privacy standpoint, strict data minimization is essential. Systems should collect only necessary information and retain it for only as long as needed. Personally identifiable information (PII) is separated from behavioral or usage data and linked through secure reference keys rather than a single master record. Cybersecurity demands layered defenses, inlcuding encrypted end-to-end channels, secured token vaults, anomaly detection, and role-based access. Consent management is equally important, giving riders the ability to opt in or out of personalization features easily.
When executed correctly, privacy and cybersecurity become an integral part of the product’s value proposition. Riders trust the system not just because it works, but because it’s smart and safe. Without these safeguards in place, even the most sophisticated AI will fail to achieve broad adoption.
Q: What role do governance and compliance play in token-based transit systems?
Chawda: Governance and compliance prevent token-based transit systems from becoming fragmented. Even with the best tokenization tech in place, without clear rules for issuing, managing, linking, and retiring tokens, there is a risk of fragmentation or blind spots.
Governance defines the lifecycle of a token and, in some cases, its relationship to a payment account reference (PAR). PAR links multiple tokens across devices or reissued cards to the same underlying account without exposing the account itself. This continuity supports fraud analytics, fare capping, and loyalty programs.
Compliance is the other half of the equation. Transit agencies must comply with the Payment Card Industry Data Security Standard (PCI-DSS), the General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and, increasingly, sector-specific cybersecurity mandates. While tokenization and PAR limit exposure, agencies still require strong audit trails, explicit consent management, and incident response playbooks to demonstrate responsible operations. If AI-driven systems adjust fares, block suspicious transactions, or offer personalized travel bundles in real time, it’s essential that rules for transparency, explainability, and human escalation are in place. Riders need to understand why actions occurred and have a clear, human path to resolve it.
Governance and compliance aren’t just regulatory checkboxes. They’re part of the trust architecture. When tokenization and PAR operate under strong governance, the result is a secure and interoperable transit payment ecosystem ready to scale across an entire city or region.
Q: What are the broader implications of this growth, and how can organizations prepare for the future?
Chawda: Sustained growth depends on building infrastructure that adapts to an increasingly connected ecosystem. Investment in modular design ensures that platforms can integrate seamlessly with emerging payment rails, digital identity frameworks, and mobility services without costly and disruptive rebuilds. Security must be foundational rather than an afterthought. Tokenization, encryption, and dynamic risk scoring remain essential to maintaining trust in real-time, high-volume digital interactions. The convergence of payments, mobility, data science, and ethical considerations requires diverse teams capable of designing solutions that are technically advanced, secure, adaptable, fast, and built around genuine user needs.
This formula for success will shape innovation and growth beyond the transit sector, setting the standard for how digital ecosystems evolve across industries. When payments work securely, instantly, and at scale for millions of daily riders, retail, mobility-as-a-service, and cross-border commerce can apply the same blueprint. For example, tolls can be automatically adjusted based on congestion, users are billed immediately when plugging electric vehicles into charging stations, or consumers simply walk out of retail establishments while their transactions are settled in the background.
The invisible benefits ahead
The advancements in transit are a preview of a broader shift in financial systems. Industries are moving toward ambient, embedded payments where the act of paying disappears into the service itself. Tokenization will be the foundation for this shift by providing individuals with secure, scoped credentials that move across ecosystems without exposing raw payment data. Agentic AI adds a decision-making layer, routing payments in real time, negotiating terms, and optimizing costs on behalf of users or institutions. The connective thread is a future of payments that are secure by design, intelligent by default, and invisible to the user. When technology fades into the background, what people experience is trust, speed, and convenience.
About the Author:
Winslow Schmelling is a freelance writer and creative writing instructor at Arizona State University and surrounding communities. She has written for numerous blogs, publications, and journals across technology, medical, manufacturing, financial, and aerospace sectors. Connect with her on LinkedIn.
Winslow Schmelling
