Parking operators implementing digital payment systems face a critical decision between two payment models: pay-by-plate and pay-by-space. Both eliminate traditional parking meters but work fundamentally differently and deliver distinct operational advantages. Understanding how each model works and where each excels helps parking operators select the right approach for their specific operation.
How Each Payment Model Works
Pay-by-space parking requires drivers to enter a specific parking space number when making a payment. The driver walks to a payment terminal on the block or uses a mobile app, enters their space number, and pays for their desired parking duration. This model creates a direct link between the payment and a specific physical parking space. Enforcement officers checking compliance must verify that payment exists for each numbered space they inspect. This approach works similarly to traditional parking meters but centralizes payment processing into shared terminals or mobile platforms rather than individual meters at each space.
Pay-by-plate parking eliminates space numbers entirely from the payment process. Instead, drivers enter their license plate number when paying for parking, either at a payment terminal or through a mobile app. The license plate becomes the identifier that links payment to the vehicle rather than the space. When enforcement officers patrol, they scan or manually enter license plates to verify payment status rather than checking space numbers. Calgary, Alberta launched the first pay-by-plate system in Canada in 2007, and adoption has expanded significantly since then. Pittsburgh, Pennsylvania implemented the largest pay-by-plate terminal project in the United States with over 550 terminals by January 2013.
Our platform supports both payment models, but pay-by-plate delivers superior operational benefits for most operations. Pay-by-plate removes the constraint of matching payments to specific numbered spaces, creating flexibility that improves both driver experience and enforcement efficiency. San Francisco converted half of its 28,000 metered parking spaces to pay-by-plate by December 2022, reflecting growing preference among major cities for the plate-based approach.
Driver Convenience Differences
The convenience difference between these models becomes immediately apparent when drivers arrive at parking facilities. With pay-by-space systems, drivers must remember or write down their space number, then walk to find the nearest payment terminal to enter that number. If drivers forget their space number, they must walk back to their vehicle to check it, then return to the terminal. This extra step creates friction in the parking experience and becomes particularly problematic in large parking facilities where terminals may be far from parking spaces. Parents managing children, people carrying packages, or anyone parking in bad weather find this additional walking especially inconvenient.
Pay-by-plate systems eliminate this entire source of friction because drivers only need to remember their license plate number, which most people know. With our mobile payment platform, drivers don’t even need to walk to a terminal at all because they can pay directly from their phones while sitting in their vehicles. This convenience advantage extends to drivers who need to extend their parking sessions. With pay-by-space, drivers must remember which space number they paid for hours earlier and enter it again to extend their time. With pay-by-plate, the system automatically knows which vehicle needs an extension based on the license plate that’s already registered.
The convenience factor particularly matters for visitors or tourists unfamiliar with the parking facility. Pay-by-plate simplifies the experience because license plates are universally familiar, while space numbering schemes vary by facility. Our text-based payment option works especially well with pay-by-plate because drivers can simply text their license plate to a short code, creating the simplest possible payment experience.
Enforcement Efficiency Comparison
Enforcement efficiency represents one of the most significant operational differences between these payment models. Pay-by-space enforcement requires officers to physically inspect each parking space, verify the space number, and check whether payment exists for that specific space in the system. This process is inherently linear and time-consuming because officers must examine spaces individually. Even with handheld devices that speed data entry, the fundamental constraint is that enforcement officers can only check one space at a time as they walk through the facility.
Pay-by-plate enforcement transforms this process through license plate recognition technology. Officers using vehicle-mounted cameras can drive through parking facilities while the system automatically scans license plates and cross-references them against payment records in real time. Vehicle-mounted ALPR systems can operate at speeds exceeding 60 kilometers per hour while scanning multiple license plates per second, dramatically increasing the number of vehicles officers can check during each patrol. This efficiency advantage is not theoretical but has been documented in real implementations.
The City of Hampstead provides a compelling case study in enforcement efficiency improvements. Before implementing pay-by-plate with license plate recognition, the city’s paper permit system operated at about 40 percent efficiency. After deploying an LPR-based pay-by-plate system, enforcement efficiency jumped to 95 percent. The city can now read 400 license plates in 2 hours and up to 2,000 license plates in 24 hours, allowing the team to patrol the entire town twice daily with time remaining for other security activities. This represents the kind of efficiency gain that pay-by-space systems simply cannot achieve because they’re constrained by the need to physically inspect individual parking spaces.
Greeley, Colorado provides another example of pay-by-plate enforcement efficiency, where officers now scan up to 4,000 license plates each day using LPR cameras. Baylor University reported that license plate recognition quadrupled their enforcement manpower, allowing one officer to patrol a 1,000-space garage in 15 minutes compared to an hour without LPR. These efficiency gains translate directly into better enforcement coverage, higher compliance rates, and improved revenue capture for parking operators.
Compliance and Revenue Impact
Compliance rates differ significantly between pay-by-space and pay-by-plate systems due to both enforcement efficiency and payment convenience factors. Research from the University of Texas at Arlington found that smart parking systems with license plate recognition reduced violations by over 20 percent in the first year. This improvement results from both increased enforcement coverage and the perception among drivers that violations are more likely to be detected when automated systems are scanning plates continuously.
The convenience factor also influences compliance because drivers are more likely to pay when the payment process is simple and frictionless. Pay-by-plate reduces payment friction by eliminating the need to remember space numbers and walk to distant terminals. When we’ve implemented pay-by-plate with mobile payment options, operators report compliance improvements because drivers can pay easily from their phones. The same UT Arlington study found that access to real-time parking availability and booking options improved parking efficiency by up to 45 percent, optimizing space utilization. The research also documented that smart parking systems reduced circling behavior by 30 percent, solving congestion and driver frustration while cutting emissions from searching for parking. How digital parking payments increase revenue for operators explores these revenue benefits in detail, showing how pay-by-plate creates multiple paths to improved financial performance.
Revenue capture improves with pay-by-plate systems because enforcement efficiency directly translates to more citations issued and collected. When enforcement officers can scan hundreds or thousands of license plates per shift rather than manually checking dozens of space numbers, violation detection rates increase substantially. Additionally, pay-by-plate systems with our payment solutions capture more session extensions because drivers can easily add time to their parking without knowing their space number. HONKtext helps operators capture every transaction by making payment so convenient that compliance rates improve dramatically. These session extensions represent incremental revenue that pay-by-space systems often miss because drivers don’t remember which space number they originally paid for.
Implementation and Cost Considerations
Implementation costs differ between these payment models primarily in signage and enforcement technology requirements. Pay-by-space systems require clear numbering on every parking space, which means painting or installing physical space markers throughout the facility. These numbers must remain visible and legible over time, requiring periodic maintenance and repainting. Payment terminals must display clear instructions about entering space numbers, and signage must help drivers locate the nearest terminal. The physical marking and signage requirements create ongoing maintenance costs.
Pay-by-plate systems eliminate space numbering requirements entirely, reducing signage to simple instructions about entering license plates at payment terminals or scanning QR codes to pay by mobile. This simpler signage is easier to install and maintain because it doesn’t require marking individual spaces. However, pay-by-plate systems achieve their full operational benefits when paired with license plate recognition technology for enforcement. Vehicle-mounted LPR cameras represent an upfront investment, though operators recover these costs quickly through enforcement efficiency gains and increased citation revenue. Our parking software solutions integrate seamlessly with LPR technology to maximize operational efficiency.
Our implementation approach for pay-by-plate minimizes upfront investment because we focus on mobile and text-based payment that works without expensive payment terminals at every location. The primary costs are signage, software setup, and enforcement technology. Most operators implementing pay-by-plate with our platform see return on investment within the first year through improved compliance, increased session extensions, and reduced labor costs from more efficient enforcement. The operational savings from fewer enforcement hours required to cover the same parking inventory quickly offset the initial technology investment.
Where Pay-by-Space Still Makes Sense
Despite pay-by-plate’s operational advantages, some scenarios favor pay-by-space. Very small facilities with just a handful of spaces may find pay-by-space simpler because the enforcement efficiency advantage becomes less significant when officers can quickly inspect all spaces manually. Facilities where drivers frequently switch spaces during their session, such as some retail locations, may benefit from pay-by-space because payment remains linked to the physical space rather than requiring new payment when the vehicle moves. However, our experience suggests that pay-by-plate scales better across diverse facility types because it works equally well for on-street parking, surface lots, and parking garages without requiring space numbering infrastructure.
Flexibility and Future Capabilities
Pay-by-plate systems deliver greater flexibility for operators to modify parking inventory without updating payment systems. When operators add, remove, or renumber parking spaces in a pay-by-space system, they must update all physical space markers and reprogram payment terminals. Pay-by-plate eliminates this constraint entirely because no space numbers exist in the payment system. Operators can freely modify parking layouts without affecting payment or enforcement processes.
Future parking technologies increasingly favor pay-by-plate architectures because they rely on vehicle identification rather than space identification. Connected vehicle technology, automated parking systems, and smart city integrations all use license plates or vehicle IDs as primary identifiers. Our municipal parking management software is designed to evolve with these technological advances while maintaining the fundamental pay-by-plate approach.
Making the Right Choice for Your Operation
The data and operational experience demonstrate that pay-by-plate delivers superior enforcement efficiency, better driver experience, and higher revenue capture compared to pay-by-space for most parking operations. The efficiency gains from license plate recognition technology are substantial, with enforcement productivity improvements of 95 percent representing transformation that fundamentally changes parking economics. The ability to scan 4,000 plates per day compared to manually checking hundreds of space numbers creates clear operational advantage.
The trend in the parking industry clearly favors pay-by-plate, with major cities converting tens of thousands of spaces to this payment model. We provide comprehensive support for operators transitioning from pay-by-space to pay-by-plate, including customer communication strategies, signage design, and enforcement training. Our blog about why cities are ditching parking meters explores this broader trend toward modern parking payment systems. Based on enforcement efficiency data, compliance improvements, and technology development trajectory, pay-by-plate represents the superior choice for operators ready to modernize their parking payment systems.
