Vancouver’s Compass Card and open payment

Translink, the regional transit authority in Metro Vancouver, is in the process of deploying a new fare collection system by Cubic. Central to the system is a new contactless farecard, the Compass Card. The Compass Card will give transit riders in Vancouver an easy way to pay their fares across all of the modes of transit that Translink operates.

As Translink’s FAQ explains, though, there’s more to the system than just the Compass Card:

Q: Will people still be able to pay for fares in cash or by credit/debit card?
A: Customers who still want to use cash can purchase a Compass Card or Compass Ticket at vending machines in stations. Vending machines will also accept debit and credit cards as payment for cash fares. Buses will also still accept cash. Customers can also use their contactless credit card on buses or at the faregates by simply tapping their credit card in the same manner as the Compass Card (don’t forget to tap off). However, customers will be strongly encouraged to use the Compass card for the pricing discounts, convenience and flexibility they offer.
from FAQs – Compass Card and Faregates

This is somewhat of a sharp contrast with the practice in other North American cities who have been contemplating open payment, where there has been a very explicit objective of getting the transit agency out of the business of issuing fare media, and making contactless credit and debit cards the primary means of fare payment. In these proposals, the needs of unbanked and underbanked riders are often addressed through third-party vending of closed-loop (or, in some cases, open-loop GPR) cards.

But in Vancouver, the roles seem to be reversed. The Compass Card and Compass Ticket (presumably either a magnetic strip ticket or limited-use contactless smart card) are being marketed as the primary means of fare payment under the new system, with greater emphasis on the reusable Compass Card. Open payment isn’t even mentioned as such; there’s just a passing mention that riders “can also use their contactless credit card on buses or at the faregates by simply tapping their credit card in the same manner as the Compass Card”, and that’s it.

Conceptually, what Translink is doing with the Compass Card and open payment is similar to what I suggested when Transport for London launched its open payment initiative: open payment may be a boon for the many infrequent riders who will flood the system during the Olympics, but for commuters who ride every day, an Oyster card will remain the best fare medium.

Of course, this approach is also cheaper, at least from a per-transaction perspective—when a rider in Vancouver uses their Compass Card or Compass Ticket, there are no credit/debit interchange fees to pay as there would be if they’d used a contactless credit or debit card.

2 thoughts on “Vancouver’s Compass Card and open payment”

  1. Kurt, are you aware of any studies, articles, or even anecdotes about how much agencies are paying in terms of credit card transaction fees with open payment systems ? Or whether they got some sort of special deal?

    It seems to me that yes, collecting fares is expensive for agencies. But they can reduce this cost by providing and encouraging online reloading of cards (or even auto-reload with a credit card), buying passes online, etc. They’re never going to be able to get rid of cash completely; you have to have a way for occasional riders, tourists, etc. to buy a farecard at a vending machine (that farecard will no doubt in the future use contactless tech) or get on a bus and pay.

    It would be interesting to find out how much the switch to contactless “smart” cards has already lowered agency fare collection costs, how agencies can reduce that cost further, and how much those cost reductions compare to paying Visa/MC a transaction fee every time someone taps.

    1. I’m not aware of anything that has been published concerning the terms agreed to by transit authorities and merchant banks for card processing for open payment systems.

      My understanding, from what I’ve heard, is that in the case of some of the pilots that have run, the card issuers have made a substantial investment for the purpose of demonstrating the technology. On that basis, I would assume that they are also giving transit authorities a break on transaction charges now, with the intention that as these systems move into production, then they’ll start charging more normal rates.

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