Preliminary Strategic Analysis of Next-Generation Fare Payment Options for Public Transportation

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1 Preliminary Strategic Analysis of Next-Generation Fare Payment Options for Public Transportation Andrew Berthaume US DOT John A. Volpe National Transportation s Center Cambridge, MA

2 Research Objective Produce a pragmatic report useful for transit industry practitioners to implement Next Generation Fare Payment s

3 Research Approach 1. Literature research 2. Targeted interviewing 3. Analysis of Real-world Findings

4 What does Next Generation Fare Payment mean?

5 What do Transit Agencies call it? Open Standards Fare - OSFP New Payment Technologies- NPT New Electronic Payments Program- NEPP New Fare Payment - NFPS Electronic Fare Payment - efare

6 But what about Breeze TAP Q Card Charlie

7 Transit Payment Progression: Closed, Card-Based Architecture Regional Closed, Card- Based Architecture Account-Based Architecture Acceptance of Open Payments

8 PAYMENT SYSTEM GOALS: It s all about CUSTOMER CONVENIENCE!!!! Move ->from collecting fares to enabling payment Note to Self: ->to acting more like a retail merchant Register for APTA -> to private financing of equipment??? Rev Mgmt Summit!!! SYSTEM FLEXIBILITY!! I don t want to be locked into my vendor Future-proof the system!! Open Architecture. HOW? What?

9 Issues to consider Legacy s Technology/ Architecture New Aligning Goals and Objectives Cost Considerations Institutional Issues

10 Typology- Interim Deliverable Breakdown of fare payment options based on goals, priorities, and limitations for each transit agency. Targeted review of: 1) Technology and system options 2) Transit operators needs/requirements

11 Payment s Functional View Fare Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement - Issuance - Personalization - Registration - Revocation - Media and fare product validity - Fare cost generation - Payment processing Front-end points for payment and reload, e.g. - Fare gates - Fare boxes - Vending machines - Websites - Third-party card sales Distributed IT network performs data collection and forwarding. Data flows include: - Transaction - Device health and welfare - Fare table - Revocation lists - S/W upgrades - Financial reconciliation - Business rules management - Operational changes promulgation

12 Closed Payment, Card-based Architecture Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Smart Card Readers/ Validators Transit Agency Computer Network Transit Agency Description Transit only, stored value Performed at card-reader interface Fully integrated in reader/ validator Proprietary Occurs in Agency system Responsible entity Transit Agency/ Transit Agency/ Transit Agency/ Transit Agency/ Transit Agency/

13 Closed Payment, Card-based Architecture, Regional, Lead Agency Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Lead Agency Smart Card Lead Agency Smart Card Lead Agency Smart Card Lead Agency Readers/Validators Regional Agency 1 Readers/Validators Regional Agency n Readers/Validators Lead Agency Regional Agency 1 Regional Agency n system Lead Agency Central Computer Responsible entity Lead Transit Agency/ Transit Agency/ Transit Agency/ Transit Agency/ Lead Transit Agency/

14 Regional, Regional Administrator Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Regional Smart Card Regional Smart Card Regional Smart Card Regional Agency 1 Readers/Validators Regional Agency 2 Readers/Validators Regional Agency n Readers/Validators Regional Agency 1 Regional Agency 2 Regional Agency n Regional Central Computer Responsible entity Regional Administrator/ Regional Transit Agency/ Regional Transit Agency/ Regional Transit Agency/ Regional Administrator or

15 Compass ORCA Go-To-Card Presto Charlie Clipper ConnectCard Connect Transit Card Chicago Card Go Ventura Proven, Reliable, Convenient SmartLink Card Freedom Charm Card TAP Platinum Pass Breeze SmarTrip Compass SunGO Q Card Star Card Easy Card

16 Account-Based Approach Pioneered at Utah Transit Authority

17 Account-based Fare Payment Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Smart Card Readers/ Validators Transit Agency Computer Network Transit Agency Description Media is a credential or token Handled in central system. Divides system access and payment. Only validates fare media Payment performed here - Fare Calculation - Account Management Occurs in the transit agency system. Responsible entity Transit Agency/ or Third parties Transit Agency/ Transit Agency/ Transit Agency/ Transit Agency/

18 Acceptance of Open Financial Payments Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Open Payment Media Financial Payments Network POS Readers/ Validators Transit Agency Computer Network Financial Payments Network Transit Agency Description Ubiquitous, Standardsbased media; transit agency a merchant Performs only payment authentication Performs media validation - plug and play POS - Fare cost generation - Transportation account mgmt Financial reconciliation only Responsible entity Issuing Banks Financial Payments Network Transit Agency/ Transit Agency/ Financial Payments Network

19 Open and Mobile Payment Acceptance Taking Hold CapMetro App.

20

21

22 Acceptance of Multiple Payment Types Media Issuance and Management Payment Point of Sale Transit Payment Operation Clearing and Settlement Open Pymt Card Mobile Ticket Transit Card Mobile Open Pymt Employer Credential Financial Payments Network POS Readers/ Validators Transit Agency Computer Network Transit Agency Financial Payments Network Description Maximizes media flexibility Combo of open payments and closed payments processing Multiple APIs for various payment types. - Fare cost generation - Transportation account mgmt Combo of open payments and closed payments C&S Responsible entity Various: Issuing Banks, Transit Agency, other Third Parties Open: Financial Payments Network Closed : TA/ Transit Agency/ Transit Agency/ Open: Financial Payments Network Closed: TA/

23 Regional Transportation Account Media Issuance and Mgmt Payment Point of Sale Payment Operation Clearing and Settlement Transit Agency {1, 2, n} Media Parking {1, 2, n} Media Toll Media Other Partner {1, 2, n} Media Agency {1, 2, n} Account Mgmt Parking {1, 2, n} Account Mgmt Toll Account Mgmt Card Share, Ride Share, etc. Account Mgmt Account Linkage/ Mgmt Partner Clearing and Settlement Benefit Mgmt Incentives Description Partners media independent of others Partner systems are independent. Account linkage enables cross-modal convergence Responsible entity Various Varies for each partner operator Varies for each partner operator Operator/ for each partner Varies

24 TODAY- Next Generation Fare Payment Architecture Flexibility Fare Media Flexibility Future Proof

25 Interview Practitioners Mini-case studies Analysis of Real-world Findings

26 Andrew Berthaume John A. Volpe National Transportation s Center Andrew.berthaume@dot.gov

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