This report presents an evaluation of the Phase II Smart Card Demonstration Project, the goal of which is to develop a transit fare payment system for commercialization that will improve transit efficiency and effectiveness. The major focus of the project is the testing of selected technologies in revenue service. Two types of fare payment cards were selected: a contactless radio frequency (RF) card and a contact card. The advanced fare payment system includes passenger transaction units installed on buses and the associated control and communications system. The evaluation covers the following areas: functional performance of hardware and software components, impacts on transit management, operations and efficiency, transit passenger responses and perceptions, and institutional and organizational issues related to the planning and implementation of the Field Operational Test.