An automatic toll collection system comprises and operates in conjunction with transponders which are provided for sale to the public in sealed packages and which are pre-approved for a predetermined amount of prepaid toll credit. When the transponders are purchased, they can be installed in any vehicle and are immediately ready for use. The kit in which the transponder is sold includes application forms and a return mailer which permit the purchaser thereof to convert the preestablished anonymous account to a regular prepaid toll account and to authorize the automatic replenishment of the account, thus enabling continued use of the purchased transponder beyond the pre-approved amount. The invention further comprises the process of frequent updating, e.g. several times daily, hourly, etc. of toll plaza computers with toll transactions at all participating toll facilities, to prevent inadvertent overdrawing of toll accounts by motorists.