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.

Open payment: just how did the New York pilot fare?

Last Thursday, Fast Company published an article which revealed some statistics from MTA New York City Transit’s involvement in the 2010 tri-agency regional open payment pilot. This is the first time the agency has shared statistics from the pilot—and so far, the agency’s partners in the pilot, the Port Authority and NJ Transit, are keeping quiet.

At first glance, the stats look miserable: in such a large and tech-savvy city, how could so few people have used the open payment pilot? But as Fast Company points out, when you look at the released data, there are “few angles that offer apples-to-apples comparisons”. In fact, there’s a lot to keep in mind when considering the pilot’s performance.

The first point to consider—one which Fast Company does a good job of highlighting—is the small scope of the trial, considering the size of New York City’s subway and bus networks. In the subway, the only stations equipped for the pilot were those along the Lexington Avenue Line. While the Lexington Avenue Line may be the system’s busiest, there were still plenty of subway and bus riders left out of the pilot.

Beyond that, the pilot wasn’t just about convincing riders to give up their MetroCards. As the MTA’s Aaron Donovan explained, the point of the trial was not to convert huge numbers of riders to open payment, but simply prove the technology could be made to work in the harsh transit environment of New York City. As Donovan described, the pilot proved the viability of a regionally interoperable system, as well as that the system could be operated securely, and that the equipment would indeed stand up to the physical environment.

The next point to consider is that market penetration for contactless credit and debit cards, along with NFC-enabled mobile phones, is still generally poor. Worse, many associate contactless payment not with convenience and speed, as the industry would prefer, but rather fraud and “hackers stealing your credit card number right through your wallet”. The fraud concerns aren’t entirely unfounded; Kristin Paget’s recent demo has shown that. Logically, the risk of fraud shouldn’t stop people from using contactless payment cards—but who ever said consumers are logical?
Continue reading Open payment: just how did the New York pilot fare?

Transit mobile payment roundup

This is almost a month behind, but there were two fairly quiet announcements in October on transit payment integration with mobile phones:

  • NJ Transit and Google have announced a partnership to accept Google Wallet for fare payment as part of NJ Transit’s ongoing open payment program. Riders will be able to use their Nexus S phones with the Google Wallet app just like they would use a contactless credit or debit card to pay their fare on select NJ Transit bus routes and AirTrain Newark.
  • Nokia and MTA Long Island Rail Road have announced a very limited pilot in which 20 LIRR employees will use Nokia NFC-enabled phones. It’s not clear if this actually involves open payment; as it’s described, the employees in the pilot will tap their phones on NFC tags when boarding and disembarking, but no fares will actually be charged, at least in the first phase of the pilot. After this initial phase, the trial will be opened up to riders on the Port Washington Branch, the LIRR’s shortest line. But even then, the implementation won’t be quite as convenient as installing the Google Wallet app and getting on board; the article mentions “riders’ preregistered pay-as-you-go accounts or weekly or monthly passes”. This is an important contrast with the NJ Transit trial: once a rider loads the Google Wallet app, they don’t need to register separately to use the app to pay their NJ Transit fare.

The interesting point about the NJ Transit trial is that it’s based around existing standards for contactless payment; there’s nothing particularly specific to Google or NJ Transit happening here. All the Google Wallet software does is emulate a contactless credit or debit card; this is unlike using an NFC-enabled mobile phone to emulate a closed-loop card like SmartLink, SmarTrip, or Oyster.

This is, after all, what open payment is all about: paying for transit should be just like paying for groceries. The transaction that takes place when a Nexus S user taps their phone to the faregate at the Newark Airport AirTrain station is more or less identical to the transaction which takes place when I use my contactless American Express card to pay at the grocery store. This use of open standards reduces implementation time and cost; rather than developing NFC-enabled apps for many transit authorities, all phone makers have to do is support contactless payment by emulating a contactless card, and they’re set.

It’s less clear how the MTA LIRR trial is intended to work; there are very few details available, but it doesn’t seem to be an open payment trial in the conventional sense. It seems as though rather than installing active equipment at stations (which would require power and data connectivity), the LIRR would rather install passive tags at stations, and use the phone to read the tag and send the transaction data to a central server for processing. Of course, whereas riders on NJ Transit who have any contactless card or payment device can use it to pay, on the LIRR riders would have to have a supported NFC-enabled phone. Then again, mounting a few passive tags is a lot less expensive than installing platform validators and providing power and data connectivity at all 124 stations on the LIRR.

PATCO open payment pilot launches

This week, PATCO and Cubic launched an open payment pilot on the PATCO Speedline, a rapid transit line which connects Philadelphia with southern New Jersey. This project, the third open payment program to be launched in the US (after the trials in New York City, and the UTA’s new fare collection system), is the first to include a prepaid card as an option for unbanked riders. Central to this program is a Visa prepaid card issued by The Bancorp Bank. The card can be used to pay transit fares in the same manner as PATCO’s existing FREEDOM Card, but, as an open-loop general-purpose reloadable card, it can also be used anywhere contactless cards are accepted—including other transit services.

The PATCO Speedline doesn’t operate in isolation; at one end it’s connected to SEPTA services in Philadelphia, and at the other end it’s connected to NJ Transit services, including the River Line and Atlantic City Line. Yet at present, there’s no integrated electronic fare collection where these agencies’ services connect; there is a discounted SEPTA fare available to PATCO Speeedline riders, but that requires buying a ticket from a PATCO ticket vending machine. To provide the best rider experience, applicable discounts should be applied automatically—and that requires that riders be able to use the same electronic fare media across the various systems.

As a matter of fact, open payment isn’t an absolute necessity for transit agencies to offer an integrated electronic fare collection system; after all, it’s now possible to travel from Quantico, VA to Hunt Valley, MD using only a SmarTrip card. However, providing that level of integration for SmarTrip requires that every participating transit agency use Cubic Nextfare (which as a practical matter also means using hardware from Cubic), and that all of the data be managed centrally. With open payment, that level of central coordination isn’t necessary.

Now, other agencies in the Philadelphia area, including SEPTA and NJ Transit, can deploy their own open payment systems, from vendors of their choosing, and they’ll be able to accept the same cards that are accepted on the PATCO Speedline as part of this pilot.

SEPTA has launched an informational site on their open payment plans, while NJ Transit continues to operate their part of the tri-agency trial that was conducted last year with MTA New York City Transit and PATH, so there is a very real possibility that riders will soon be able to transfer between all three agencies using a single card.
Continue reading PATCO open payment pilot launches

PATCO open payment pilot to launch in September

The PATCO open payment pilot (previously covered here) will launch in September and run for one year, according to the new project blog.

The blog’s inaugural post includes a photo of the reload kiosks which are being installed on the system; the photo posted reveals Cubic’s choice of banking partner for the pilot: The Bancorp Bank, “one of the nation’s top five issuers of open-loop prepaid cards”. The kiosk doesn’t look like a Cubic product at all; given the nature of the project, I’d expect it’s an off-the-shelf product designed for reloading GPR cards.

As far as open payment is concerned, the pilot itself won’t be very open, as the project FAQ explains:

Can I use any bank card during the pilot?
No. Only the new PATCO Wave & Pay ANYWHERE Visa® Prepaid Card will be able to be used to pay for PATCO rides and parking fees.

Of course, this will change in the second phase of the pilot, when the system will be opened to all contactless payment cards and devices, but that isn’t mentioned in the FAQ.
The FAQ also contains an attempt to explain the motivation for open payment which ultimately falls flat:

Why is it called “open payment”?
It refers to the ability to pay for goods and services without being restricted to a single merchant. A “closed” payment system limits where you can make purchases. For instance, the FREEDOM Card is a closed payment system because money loaded onto your FREEDOM Card can only be used for transit purchases.

What that answer fails to account for is that it is in essence solving a problem which doesn’t exist. The real value in open payment lies not in transit agencies issuing open loop GPR cards rather than their own fare media, but rather in accepting contactless cards which riders already have, which is substantially more convenient. For riders who currently use a FREEDOM card, and who would have no other reason to use a GPR card, switching from a FREEDOM card (a closed-loop, card-based application) to a GPR card only brings more complexity (a third party, the card issuer, is added to the transaction), plus the risk of higher fees (though agencies have pledged to absorb such fees, whether that will hold up in practice remains to be seen). Riders just aren’t clamoring to be able to use their FREEDOM card (or other stored-value transit fare media, like the MetroCard, Oyster card, or SmarTrip) to pay for purchases at other merchants.

With all of that said, there is some value in the concepts being proven in this pilot. When the UTA rolled out its electronic fare collection system in 2009, they implemented a pure open payment system. If you don’t have some kind of contactless payment card or device, then you have to pay cash, unless you’re using a pass. Since the UTA’s AFC system is designed around open payment, issuing a conventional contactless smartcard using a card-based application (like the FREEDOM card, or PATH’s SmartLink, or WMATA’s SmarTrip) is not an option. Partnering with a card issuer to vend GPR cards in-system would permit riders who do not have any other contactless payment card or device to take advantage of the benefits of electronic fare collection and avoid having to carry cash.