Developments in smarter multi-modal fare paynment

David Crawford surveys current developments in smarter multimodal fare payment

Moves to make public transport payment smarter are gaining pace at political as well as technological levels. At the 1690 European Commission's recent inaugural conference on ITS in Europe in Brussels, Transport Commissioner Siim Kallas issued an 'innovation challenge' to industry stakeholders to come up with contributions to the creation of an integrated European multimodal travel planning and ticketing system.

Acknowledging the "plentiful" legal, technical, political and business case obstacles that have to be resolved along the way, he said that the EC is "ready to listen and play our part in removing barriers to innovation". He hinted that he would like to see some solutions being proposed by summer 2011, suggesting possible greater 1816 European Union emphasis in future on the scope for ITS in public transport.

The EU's current 2009-2014 ITS Action Plan, published in 2008, and its 2010 ITS Framework Directive both target the road transport sector and its "interfaces with other modes of transport". European regions and cities organisation Polis, among others, has pressed for more specific stress on multimodality and public transport, and the planned 2012 mid-term review of the Action Plan could set a constructive timeline for concerted effort in that direction.

Access to information

In the meantime, Kallas's office has made it clear that the EC has no plans to develop any specific tools of its own to speed the process. But it is publicly committed to working to ensure that the necessary information can be more easily accessed and shared between transport operators and city authorities, and that common standards are used - not least to make it easier for smaller communities to take an active part.

One global initiative already under way at major city level involves the UK's 1466 Transport for London

(TfL) working together with its opposite numbers in Paris, New York, Boston, Chicago and Sydney - as well as in the UK city of Manchester - on the harmonisation of ticketing procedures. It has flagged up a hoped-for debut for an internationally recognised system by 2012.

The year of the London Olympics is already being promised as the stage for launching a number of new payment methods, both in transportation and wider - though some critics are dubious about the feasibility in the case of some of the former. At a global level, the key challenge is going to be the achievement of interoperability between systems, a number of which are currently in the process of development and implementation.

Of the proposed partner authorities in the link up, Sydney is finally progressing the long-delayed introduction of its Tcard tap-on-tap-off transit payment system, based on the model of the London Oyster, which has been in operation since 2003. Following the collapse of an earlier agreement with another supplier, the Pearl Consortium, which includes Oyster developers 378 Cubic Transportation Systems, has won an A$398 million contract from the government of New South Wales for the design, development, implementation and maintenance of the TCard. This is to be phased in, initially on ferries, then on commuter rail and buses.

Credit and debit cards

Meanwhile, TfL is already in the process of upgrading its own payment system for buses and Underground (metro) services that will allow them to accept network-branded contactless credit and debit cards. It is currently in talks with financial institutions that will issue the cards, and has run a faregate pilot.

This transition to payment by specially enabled credit or debit cards is in line with developments that are taking place around the world. In Paris, earlier in 2010, regional public transport operator Régie Autonome des Transports Parisiens (RATP) ran a pilot to demonstrate the feasibility of 1758 Visa payWave card acceptance at a metro fare gate.

In another partner city, the 1000 Chicago Transit Authority (CTA) has issued a request for proposals on the design, implementation and operation of an open fare collection system using credit or debit cards. The CTA sees this as a cost-saver as much as a passenger convenience, enabling it to update its fare collection equipment without paying an upfront capital cost out of limited financial resources. Elsewhere in the US, commuters on both coasts have already been enjoying the opportunity to pay in this way. In a six-month pilot in New York City, passengers on metro, commuter rail and buses have been able to pay using payWave-enabled cards - as well as mobile phones - while those in Los Angeles can use a special Visa prepaid card to ride the metro system.

A large-scale joint operation between New York City Transit, New Jersey (NJ) TRANSIT, the Port Authority of New York andTax-free help with commuting

The US system of tax-free commuter benefits allows employers to offer voluntary schemes that enable employees to reduce their monthly costs of using public transport (or van (minibus) pooling, work-related parking or (since 2009) bicycles). Both employers and employees enjoy resulting tax savings.
Set up in 1993 under the US federal tax code, the scheme aims to encourage greater use of mass transit in order to reduce traffic congestion and improve urban air quality.
In 2009, US President Obama widened the limits for employee participation.
The benefits can be provided in the form of prepaid tickets, passes or vouchers - or by elecronic media including credit or debit cards, though these last have to be useable only for the commuter benefits. For this reason, TransitCheck has had to create a special product, which is now a model for other schemes that move to advanced payment technology in what the company hopes will be a growing market. (A Business Week survey for the company has found that 65 per cent of US employees feel that companies should help ease their commutes.)  New Jersey (PANYNJ), the Metropolitan Transit Authority (MTA) and 1756 MasterCard Worldwide trialled the use of Visa payWave technology. This was based on an electronic chip embedded in a payment card or mobile phone that communicated securely with contactless readers at commuter rail fare gates and on buses operated by the MTA.

It was also available at the Newark Liberty AirTrain Station in New Jersey, which connects to central New York. In addition, more than 10,000 New York City cabs installed terminals at their passenger seats.
Another, non-operator, participant was TransitCenter, a not-for-profit provider of tax-free benefits schemes for commuters (see panel). The company issued a specially developed contactless product - the orange prepaid TransitChek QuickPay Visa Card - for use in the trial.

In the Los Angeles programme, the TAP ReadyCARD combines Visa prepaid functionality with the city metro's transit access pass in a pioneering initiative. Under test are both payWave-enabled payment cards and smart phones using mobile technology developed by payment collection technology specialist DeviceFidelity.
The company has evolved a mobile contactless payment method designed to operate with any wireless service provider.
Ride, pay and reload cards, sold through automated ReadySTATION kiosks within the metro system and at external retailers, are active for immediate use; another version incorporates ATM cash access. Unbanked commuters can also use the system, which does not require them to have a bank account, via direct salary transfers.

Both initiatives, in other words, have taken advantage of the introduction of the new technology to target wider social aims.

Asian progress

Mass transit is proving to be a major driver of contactless smartcard take-up across the Asia-Pacific, where it now represents the second largest application of the technology. The regional market was worth US$775 million in 2009, against a global total of US$1.94 billion.

Reuben Foong, an analyst with market research company Frost & Sullivan, expects demand to keep growing over the next two years with the emergence of further mass transit schemes - the platform for new applications "motivated by user convenience".

By end-2016, an estimated 1.9 billion contactless smart cards are expected to be shipped in the region.

Recent adopters include Malaysia where, in August 2010, Visa payWave cards became accepted on the mass transit link between Kuala Lumpur International Airport and the city centre of the country's capital. In the same month, Singapore marked the inaugural Youth Olympic Games with the launch of a prepaid card offering general retail payment, games entry and access to the island state's public transport network.

In China, Beijing citizens are now able to use their mobile phones as transportation cards to pay for public bus and metro fares. Hong Kong-based telecoms company China Unicom launched pilots in Beijing and three other cities (Shanghai, Guangzhou and Chongqing) earlier in 2010 and now plans a phased wider rollout. Commuters can recharge their mobiles at prepaid service sites.