Open Payment Fare Solution Universal Transportation Payment Solution APTA Transit Board Members Seminar July 26, 2011 GORDON LINTON Senior Advisor & Principal 200consult Transportation Solutions
Universal Transportation Payment Solution Let me emphasize here, Mr. Chairman The farecards that we use here in Washington, D.C. are only the first generation of what promises to be a versatile tool.future farecards may be the same card you use for automatic teller machines. Solid plastic with an integrated microchip they would be used for buses, parking and buying gas. They could also be integrating multiple transit operators and electronic toll collection systems thereby providing a single payment media for all transactions Former Administrator Gordon Linton s testimony before the House of Representatives Committee on Public Works & Transportation July 21, 1994
Universal Transportation Payment Solution Account Based Management Approach Hot Lanes & Tolls Airport/Off Street Parking On Street Parking Multi space Meter Transit Fare Collection Bus Rail There are different payment mediums available each with special benefits Transponders License Plate Smart Cards Transit or Bank Issued Key Fobs Cell phone - NFC Linked together in one account offers customers added convenience, and managers new policy tools One Account One Service Point Many Services
The United States of WMATA Our own banking system.. Our own Federal Reserve.. our own currency cannot be used anywhere else ( when is the last time you bought a mocha latte with a WMATA smartrip card?)! We print it, circulate it, maintain inventory, maintain cash rooms, count it (some gets loss along the way) so we provide security. We purchase proprietary equipment that is expensive to maintain; limited in applications: cannot plug and play with anyone else s and we need permission from vendor to upgrade($$$)
Is it here yet? An integrated electronic payment format that can used for payment at retail, transit properties, parking facilities, toll facilities and other priced facilities? Provide a vehicle to provide third party certified standards, exchange of operations data, system interfaces, and financial authorizations among participating entities? That will support maximum transportation pricing policies, i.e. congestion pricing, distance based pricing, peak period, blue light specials, family fares, daily, monthly, pay as you go, pre-tax benefit programs.
Evolution of transit fare payment in US CASH TICKETING OPEN PAYMENTS PLATFORM Contactless Smart Cards Magnetic Stripe Cards OPEN PAYMENTS Value proposition: Tokens Customers: Speed, global acceptance, ease of use Coins Transit: efficiencies, future proof fare payment, connect with customer trends Source: New York City Transit Authority: September 2008
Open Payment/ bankcard
Business Model: Becoming a Merchant at Point of Entry Today s Practice Fare Collection Selling tickets, Validating payment Future Fare Payment Accepting payments directly from customers at POE Full ownership of a custom-built ticketing system Defining the customer relationship from a transit perspective Greater participation in the banking payments network Adapting transit business needs to customers broader retail payments experience Source: New York City Transit Authority: September 2008
Open Payment Fare Solution Be a Merchant Any Transit Agency Bank Issuers Pre Paid Issuers
Integrated Solution -Pre Paid Cards Viewed as a key element in meeting needs of riders Several types exist Electronic Payment cards for benefits distribution ( government payment cards - social security, food stamps, unemployment,etc. ) Payroll cards corporate Pre- tax benefit program cards (WageWorks, TransitChecks) Retail cards ( Ready Credit-Blackhawk) New Model allows multiple issuers All Banks can issue cards Private Label Programs put transit agency in the game Kiosk Sales Student ID cards ( Schools, Colleges, etc.) Retail Sales
Innovative Revenue Solutions Several types exist: Preferred Retailer Video Advertising Program, e.g. geocoded ads Passenger Loyalty Program: Similar to a Frequent Flyer Mileage Program Local Retailer Reward Points and Discounts Co-Branded Prepaid Cards
Account Based Processing Description Read only enables Any ISO smart card can be used as a pointer regardless of Proprietary data Source: New York City Transit Authority: MIT Forum Nov. 2008
What do we want? Regional Inoperability, maximum fare policy opportunities, cut cost, increase revenues Universal, Integrated, common payment across transit, parking,tolls, retail and priced facilities Ease of use /convergence of consumers normal purchases and payment practices Open tested standards, competition, price, performance and freedom from proprietary technology, future proofing
Total Turnkey Solution Phone SMS IVR Customer Care Customers Internet Contactless Payment devices All Modes WebServer Contactless Credit, debit, prepaid cards Subway Ferry Bus Communication Networks Agency Account $ Transit Payment Platform Fare Payment Data Communications & Authorizations Reconciliation Issuing Banks MasterCard, Visa, AMEX Acquiring Bank Payment Processing/ Aggregation
8/12/2009-CTA Outlines Next Generation Fare Collection Project. introduce the use of contactless credit cards, debit cards and prepaid cards to ride the system. With this new system, customers would benefit from the faster boarding times and ease of use as nearly all fare transaction will be touch and go Former Chicago Transit Board Chairman Carole Brown CTA wants to examine ways to use the technology available today to transition to more modern contactless fare media system,...bring the agency s fare paying process more in line with the way people prefer to conduct their business. said former CTA President Richard L. Rodriguez.
Transit lines seeking smartest Smart cards. Paul Nussbaum,Philadelphia Inquirer There ought to be one electronic payment system for transportation in the region Rina Cutler Septa Board Member and Philadelphia Deputy Mayor for Transportation SEPTA officials say they also want compatibility, and expect to make interoperability a requirement...for the million riders who travel daily.. a bank-card fare system seems to make most sense.said General Manager Joseph Casey make a SEPTA card compatible not only with other transit agencies, but with retail merchants as well.
MTA is completing an evaluation of new fare and toll payment methods for transit, commuter rail and MTA bridges and tunnels, including the use of contactless smart chip payment systems, such as standard bank and credit cards, pre-paid transit payment cards, key-tags and smart phones. The future promises the ability to use a single smart card or a cell phone with a smart chip --cell phones being nearly ubiquitous in the New York region-- to ride any and all of the region s transportation systems, from NYC Transit s subways and buses, to the commuter railroads, to Bridges and Tunnels. This new approach could offer many benefits to the MTA, including increasing capacity on bus services by speeding the boarding process, reducing labor and cash handling expenses, supporting intermodal fare payments options and improving customer service through simplified and expanded fare policy. from MTA Capital Program
Points to Consider Fully allocated costs (How much does it costs us to collect a dollar?)can we save money? Financing Options? Is it simple to use; easy for customers to understand; integrated marketing/adoption plan; accessible to all market segments (students, seniors, unbanked,etc.)? Flexibility,.. Can we make maximum use of various fare structures, policies and incentives? Data rich,.. Will it provide information which management can use for various business purposes (revenue generation and operations)? Future Proof; interoperability; freedom and flexibility; best available technology; vendors knowledgeable
Thank You! Gordon Linton Senior Advisor & Principal 200consult Transportation Solutions 301.871-0777 gordon.linton@200consult.com