This study aims to assess the effects of bus electronic fare collection system on passenger service time. Characteristics and validation process of bus passenger alighting are analyzed. Field survey is conducted to compare the current practice of cash system and the magnetic ticket and electronic fare collection system tested in Taipei. It is shown that the average validation times for the cash and the electronic fare systems are 0.67 and 4.10 seconds, respectively. It is also indicated that the average alighting times for the electronic system under various conditions are significantly higher. Several improvement alternatives are evaluated. For the short run, reducing the frequency of printing information on the ticket and integrating student pass with the electronic system are preferable and can improve the system efficiency up to 30%. It is also suggested for the long run that contactless fare collection system should be considered to improve the system efficiency up 90%. The results obtained in this research can provide government and transit operators useful information for formulating implementation policy of electronic ticketing system.