A funding of boost of £1.1 million should mean more bus passengers can pay their fares using contactless technology.
The Scottish Government has launched the new fund to help small bus firms with the cost of installing the necessary technology.
Transport Secretary Michael Matheson said for such companies the price of this could be “prohibitively high”.
With contactless payments now becoming “the norm” for many, he added the change would make it “easier to access travel in Scotland”.
Major bus operators have already introduced this form of payment, allowing travellers to pay fares with a bank card or using their mobile phone.
The fund, which includes £440,000 of European money and £660,000 from the Scottish Government, was set up after the “complexities and barriers” of installing the new systems were highlighted.
Speaking about the launch of the Smart Pay Grant Fund, Mr Matheson said: “Contactless payment has quickly become the norm for many people looking to purchase low-cost products and services and we are now seeking to support this convenience on our public transport networks, making it easier to access travel in Scotland.
“For smaller bus operators in particular, the cost to upgrade machines can be prohibitively high and so this fund responds to a need to support and encourage smaller operators to make the transition to contactless payment systems - benefiting everyone who chooses to travel more sustainably by using buses.”
He added: “The Smart Pay Grant Fund will place smaller operators on a more equal footing with larger bus operators and provide smarter, quicker and easier transactions for passengers right across Scotland.”