I have the same issue but regarding paying for groceries. I have to pay more because I don't have access to the grocery store's coupon app because I don't use a smartphone.

Because the transit authority has to work at taking your fare. Vs. the easy route of trusting a cheap & convenient app ecosystem (helpfully run by SpyCo, CreepTech, and DataHarvest Ltd.) do all the hard bits. While the authority basks in feeling cool and trendy. Plus, smartphone fare fraud looks really complicated (vs. counterfeit metal tokens or whatever) - so the authority feels no pressure to do anything about it.

Less cynically, a good national policy might be to treat all "excess" revenues collected by organizations providing better deals to those passing various wealth/class/fluency tests ("has bank account", "has smart phone", etc.) as "poor taxes". Which are totally legal...but must be accounted for in excruciating detail, and every last farthing turned over to the greedy nitpickers staffing the Poor Tax Dept. of His Majesty's Revenue Authority. Every month, no excuses. So, to avoid that monthly misery for their so-privileged selves, the managers at every org with the paper power to collect poor taxes work hard to make sure that they are not doing so.

The actual answer is there's operational cost to handling cash, or payment methods beyond the ones that cover 99.9% people well. You pay more for the extra hassle the whole system has to serve that .1%

You may not like or disagree with it. But it's the true answer.