Reading the various news articles about my local transit authority moving towards a smart card type payment system I never quite get the sense that they know why they're doing it. That doesn't mean they don't know, I just can't tell.
Basically, my local transit authority is very inconvenient for occasional riders. For subway/trolley/bus we're on a token system. Most stations don't have token machines. Fare without token is exact change $2. For the regional rail system, they got rid of all the ticket machines, and many stations don't have a ticket window. You can pay for fare on board, but with a nontrivial penalty.
For passholders (weekly/monthly), the system works pretty well, although the need for passes to be calendar week and month instead of any 7- or 30- day period is a bit annoying.
Anyway, the point of moving towards a smart card system (with credit payments) is that it should make riding and fare paying more convenient for both regular and occasional riders. Hopefully they get this...