Advanced Fare Payment for Small Agencies. Craig Roberts InComm, Director, Tolling and Transit Salt Lake City, UT

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1 Advanced Fare Payment for Small Agencies Craig Roberts InComm, Director, Tolling and Transit Salt Lake City, UT

2 The Prepaid Transit Card Offers an open denomination load limited to a minimum and maximum value Real-time transactions and account updates Customers simply TAP the card on the reader as they enter and exit the vehicle Universally reloadable at any participating merchant 2

3 Utah Transit Authority FAREPAY UTA was first to launch open payment access with contactless bank cards However limited distribution, promotion and use of cards by banks in the UTA market and system Need to offer cash (and unbanked) customers access to electronic fare media Super simple and convenient Pick up card from planogram Purchase card for $3 and load $5-50 at register Reload at any merchant selling the FAREPAY card No reload fees, dormancy fees or account expiration After soft launch in October 2013, now available at over 300 merchant locations 3

4 The Problem Small transit agencies don t have advanced electronic fare collection systems Why? Acquisition too intensive in resources and expensive in funding

5 What Larger Agencies Typically Do Staff planning effort Hire a consultant Business case/roi/cost-benefit Stakeholder engagement; develop requirements Engage vender community Staff procurement effort Conduct procurement process Negotiate agreement Staff development Test functionality Manage site prep and installations Acceptance testing Staff maintenance and repair Staff operations Customer service PCI compliance Federal procurement and contracting requirements Change control and change order negotiations

6 The Perspective of the Vendor Invest time and effort in prospective customer relations for years Invest thousands to millions in preparation of proposals Recover costs from a limited number of sales over an extended period of time Result: very high overhead

7 What s a small agency to do? A Proposal: Payment as a Service

8 Account Based Fare Collection as a Service Service provider installs and maintains a single device at the entrance of each bus Incorporating Contactless card reader GPS 4g communications Just plug into bus power Service provider distributes prepaid media through retail networks and the web Customer taps; transaction recorded and forwarded to provider s back office; fare calculated, customer s account charged; proceeds deposited in agency account minus discount fee Compensation: Discount rate that includes capital amortization, or Capital/development fee plus discount rate for transactions

9 Simple Feature Set Flat fare for regular bus service Limited number of premium fare service types (e.g., express, circulator); reader set with configuration card Mechanism for registering seniors and disabled for reduced fares Web site support/customer service Account management Standardized reports, data store and reconciliation Stored value media Period pass needs met through fare caps Pay-as-you-go open payments

10 Option Module Light rail Validators to be bolted onto platform and connected to power with wireless comms Inspection device

11 Not Supported Every agency fare product Operator console or other bus integration ITS

12 Service Provider Responsibilities Device installation, monitoring, maintenance and repair Back office payment processing Banking network relationships PCI compliance Communications Web site with agency branding Limited customer service Reconciliation, performance reporting, auditing support

13 Simplified Procurement RFP with thin specifications Functional requirements with not much more detail than in this presentation Ask service provider for detailed system description Simple business model/pricing Ask service provider for draft contract Evaluate on demonstrable existing systems and products Reduce risk by asking for pilot on a portion of agency s system before full commitment

14 Target Timeframes Selection 3 to 6 months Service launch 3 to 6 months

15 Payment as a Service Craig Roberts Director, Tolling and Transit croberts@incomm.com Office: Mobile: S Riverboat Road, Suite 250 Taylorsville, UT 84123