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THE MBTA’S OVERSIGHT BOARD on Monday gave the transit agency’s staff a green light to put out a request for proposals for companies to design, build, finance, operate, maintain, and manage a new automated fare collection system.

The T’s chief technology officer, David Block-Schachter, said the new system would be cashless and allow passengers to board and exit at any door on buses and Green Line trains. Quicker boarding should cut bus travel times by 10 percent, he said.

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Customers will be able to pay fares using T-issued cards, credit cards, and smart phones. They will purchase T rides at fare vending machines, retail stores, or online. The T-issued cards will cost $5 apiece, although free cards will be distributed through social service agencies to the needy, according to Block-Schacter.

Existing Charlie Cards cost 70 cents to produce, and are given away for free. Block-Schachter said the new smart cards will cost an estimated $2.50 to produce, which could put a significant financial burden on the T. He said nearly 18 million Charlie Cards have been issued, which would cost close to $50 million to replace with smart cards.

Block-Schachter said 21 of the 25 largest transit agencies currently charge for their smart cards. Chicago charges $5, while the Philadelphia transit system collects $4.95. He also said riders who use their smart phones or credit cards to pay fares would not have to pay the $5 fee.

T officials said 3.8 percent of their existing customers pay fares with cash and 3.3 percent reload their Charlie Cards on board Green Line trains and buses.

Block-Schachter said he didn’t know what the new automated fare collection contract would cost. He also said the new fare collection system could be adapted to whatever type of fare system is desired, so existing monthly passes could be continued.

The request for proposals will seek a system that would install card readers at every door so passengers would not have to line up for time-consuming fare collection at the front of the train or bus. The system would also be designed so the departure points of passengers could be monitored, which theoretically would allow the T to collect fares based on distance traveled.

Block-Schachter said the existing fare collection boxes on board buses and Green Line trains would be removed once the new automated fare collection system is up and running. He referred to the boxes as “Mercedes” because the boxes cost approximately the same as a Mercedes-Benz vehicle.

Meet the Author Bruce Mohl Editor , CommonWealth About Bruce Mohl Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester. About Bruce Mohl Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Lou Antonellis, the president of IBEW Local 103, which represents workers in the T’s existing fare collection department, urged the transit agency to collaborate with the union during the transition to a new system. The likely contract language, however, would privatize the entire operation because it refers to the contractor handling the design, financing, operation, maintenance, and management of the new system.

Joseph Aiello, the chairman of the T’s Fiscal and Management Control Board, said “this is terrific” after Block-Schachter completed his presentation. Monica Tibbits-Nutt, a member of the board, also hailed the initiative. “Nobody likes paying cash on board,” she said.

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