Tap into an easier commute. Tap into Tap into an easier commute. Tap into PRESTO efare System APTA Fare Collection Workshop Session 102 March 28-30, 2011 March 2011
Outline PRESTO Status Update PRESTO s 2020 Vision: A Future of True Mobility Client Choice & Convenience Getting There: PRESTO Next Generation PRESTO Point of View on Open Payments 2
3 PRESTO Deployment Status Device and vehicle installations: 3600 devices/ 1600 buses/ 220 sites 12 TTC subway stations Municipal Service Provider Rollout: 7 regional municipal transit agencies (May 2011) Regional rail lines (April 2011) Regional commuter buses (June 2011) Ottawa/Carleton (OC Transpo) including 1200 buses
4 PRESTO Current Operations In revenue operations since October 2009 A passive approach to card adoption during rollout $14M total in e-purse loads $12.5M total in fare payments 26,000 cards in active use (growing by 1500 per week) High customer satisfaction with PRESTO: 91% felt that PRESTO is beneficial to them 90% would recommend PRESTO to fellow transit users TTC ridership will increase as more 905 Service Providers golive with PRESTO in coming weeks
PRESTO s 2020 Vision: A Future of True Mobility As of March 2011 5 True Mobility means more than just commuting. Analysis of local issues and industry trends demonstrates that Commercialization, Information Management and Social Policy will drive change and create True Customer Choice and True Value to Providers Information Management Commerciali zation True Customer Choice True Mobility True Value to Providers Social & Economic Policy True mobility providing true choice Integrated service model delivering a holistic and convenient travel experience to customers Open and flexible system Progressive technology roadmap New opportunities for revenue management to providers Achieving strong economic returns through the smart use of technology and commercial partnerships Embedded information management capability PRESTO s 2020 Vision A Future of True Mobility PRESTO Vision 2020 White Paper
Supporting Client Choice & Convenience PRESTO s Vision of True Mobility will provide expanded choice and convenience to customers who have different needs and preferences Choice of Integrated Transit Use PRESTO services across transport modes/ and operators (public/private) Access information from multiple interfaces Anytime; anywhere; anyplace Choice of Access to Information Choice of Product & Service Choice of Payment Channels Options on how to pay and use transit Credit card, debit card, mobile, PRESTO card Solutions that are low-cost and affordable Single or multi-ride, pass, stored value 6
7 PRESTO Key Principles Key principles that PRESTO has outlined for its transit fare system which also shape PRESTO s approach for PNG and open payments Flexible Developing a solution that is flexible and can be changed and upgraded over time Developing a solution the transit provider has control over the system and which doesn t cede control Control Cost Choosing a solution that is financially attractive in the long term and which is cognizant of the payment industry financial model Leading Edge Customer Focus Developing a solution that leverages the latest technological advances in payment technology and which develop commercial partnerships Developing a solution that focuses on the customer and provides choice, convenience and access to all
8 PRESTO Next Generation (PNG) PNG is open architecture using industry-standard tools and products, to create an open and nonproprietary system PRESTO Next Generation PNG challenges farecard industry single vendor proprietary fare systems (both closed or open payment system) Standard tools not proprietary or closed software solutions Open architecture (open, flexible, non-proprietary design) Abstraction layers providing open & flexible design Delivers multiple payment types and open for future innovations open payments, mobile, cloud-based accounts Multi-vendor sourcing multiple vendors and device types Does not cede control to the payments industry or vendors Progressive technology roadmap Built from existing Central System assets that are compatible (e.g. interfaces, settlement, clearing, back office), replace those which are not
Benefits PNG Provides PNG supports these common TTC/City/Province/Metrolinx outcomes through an open, flexible, scalable non-proprietary design Support new business requirements Faster and lower-cost changes Transit Operators New products and services (e.g. Smog day) New revenue (transit/non transit) Choice and convenience on how to pay for transit e.g. mobile, open payment Choice of fare products & services Access to information anytime, anywhere Customers Meet expectations for service enhancements Public/private partnerships e.g. city cards, retailers, telcos Improved information management and analytics Flexible cost effective changes Focus on holistic travel experience Complementary products & services Universal accessibility Cost effective services Operations and Service Delivery Integrate transit & transportation investments Promote regional interoperability Accessibility Prudent fiscal management Technology refresh strategy Build on existing PRESTO investment Build on PRESTO managed service operations Permit public/private partnerships Public & private revenue generation 9
10 PRESTO and Open Payments PRESTO s decision to support open payments within PRESTO is based on the following Open payments should be another choice for customer - it should not be the only choice Subscribing to a full open payment model would cede control from the transit operator and fare collection agency Supporting open payments on terms which make sense for customers and operators The need for an open, flexible and non-proprietary back-end system is critically important for open and closed e-fare transit system Payment Industry is going through rapid transformation (both business and technology led). Transit payment solutions need to be flexible to adopt to this change Realities of the payment industry (see next slide)
11 PRESTO and Open Payments Payment industry context for proposed open payment solutions Only ~5% of the cards today in Canada have contactless payment capability - this is expected to grow to nearly 80%, but over 10 years, by 2020 Consumer preference studies have shown 55% of transit commuters prefer using a dedicated transit card; 30% prefer open payment bank cards; 15% prefer conventional tickets and passes. The payment rate for credit cards in Canada is 30%. This means that 70% of Canadians carry balances on their credit card. In US the payment rate is 15% (or 85% carry balances) Consumer debt in Canada is at an all time high with rising debt-to-income ratios Card companies make 99% (62% from revolvers (only carry balance) and 37% from transvolvers (carry balances and transact) of their profit from customers who carry balances and only 1% from consumers who pay their bills on time Debit Cards have fees for the consumer (typically $0.35 / transaction - charged by the bank) and merchant (typically $0.12 / transaction charged by Interac). Credit Cards have fees only for the merchant (typically 2-3% of transaction value). Consumers would hence prefer using credit, while merchants prefer debit. The use of general purpose reloadable cards has many hidden fees which can make these solutions expensive for transit users when compared to PRESTO. Also the GPR market is immature in Canada, and in the US regulatory issues are still being resolved
Total Cost of Ownership Evaluation payment systems must evaluate equivalent capital and operating costs and the total cost of ownership. Typically a COTS solution may appear less expensive, but have higher long term costs for operations and inevitable changes 400 350 Full open payment system 300 250 Higher Ongoing costs make an outsourced transit system more expensive in the future 200 150 There is higher Capital Cost for a self developed transit payment system PRESTO s PNG Approach 100 50 Illustrative 0 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10Year 11Year 12Year 13Year 14Year 15Year 16Year 17Year 18Year 19Year 20
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