One of the most common complaints I hear about COTA is that there is no rechargeable fare card available. People who ride inconsistently want to be able to do so without worrying about exact change. Most big cities have these “smart cards.” New York has MetroCard, London has Oyester card, and I have a Chicago Card.
Smart cards have the ability to increase ridership and, more importantly, speed. The average travel speeds are improved becasue customers can just tap a card to the farebox instead of inserting cash. This reduces the average dwell time, or the amount of time a bus is stopped picking up passengers.
Well, these smart cards are about to get smarter by combining fare payment with a standard credit or debit card. I swear this is an idea I had about a year ago, but I can’t prove it, and the idea was probably implemented elsewhere in the world before I thought of it.
PRESS RELEASE
Visa to Improve Payment Experience for Commuters in Los Angeles and Paris; Working with Transit Operators to Enable Visa Payment at the Fare Gate
No More Fumbling for Cash; Transit Operators in the World’s Most Populous Areas and Visa Are Collaborating to Take the Hassle out of Payment for Mass Transit Commuters
Last update: 2:00 a.m. EST Nov. 4, 2008PARIS & SAN FRANCISCO, Nov 04, 2008 (BUSINESS WIRE) -
Visa Inc today announced it is working with the Los Angeles transit authority to allow train, subway and bus riders to speed through turnstiles and past fare boxes with a simple wave of their Visa payWave-enabled contactless card. In parallel, Visa Europe(1) has announced it is collaborating with the Regie Autonome des Transports Parisiens (RATP), the major transit operator responsible for public transportation in Paris and its surroundings, to demonstrate that Visa payWave acceptance at a Paris metro fare gate is technically feasible.Both initiatives are using Visa payWave technology, based on a tiny chip embedded in a payment card that communicates securely with contactless card readers over a very short distance. This means that riders can eliminate the time-consuming step of paying for a ticket at a separate machine or searching for cash — the transaction is completed on Visa’s global processing network, VisaNet. Visa payWave technology adds an extra layer of security to the transaction by attaching a unique code to each transaction, reducing the chance of fraud.
I really think this could be a great way for COTA – and any other transit agency – to implement a smart card without the cost of procuring and maintaining ticket vending machines. The Chicago Transit Authority expects to save $10 Million a year by essentially outsourcing the smart cards to a credit card company at no cost. It could even generate revenue by being the exclusive card of the authority or by contributing to the equipment at turnstiles and on buses.
Just charge it: CTA to offer more ways to pay with plastic
All-in-one ’smart’ credit/debit cards could be used for more than commuting
By Jon Hilkevitch | Tribune reporter
November 19, 2008In a society addicted to buying on credit, the Chicago Transit Authority is hoping to cash in big time.
A “smart” version of those credit cards and bank debit cards stuffed in your wallet will be accepted for payment of CTA bus and train fares in about a year, transit officials told the Tribune on Tuesday.
The card, which will contain a computer chip that allows the user to pay for rides on the CTA, Pace and other participating transit systems, is otherwise a standard credit or a debit card that can be used at all other businesses where it is currently accepted.
“You tap the card against the card reader and get on the CTA. It removes the barrier of having to get our type of fare [card],” CTA President Ron Huberman said.
But the big story is the money. Bank and credit card companies have competed vigorously in Asia and other parts of the world for a piece of the transit market because the all-in-one card usually ends up being stored at the top of consumers’ wallets, so it can be withdrawn easily and often for all kinds of purchases. The companies hope that the added usefulness of their cards will bring them more customers who will use the cards more frequently.
…The new smart card technology will open new lines of revenue to the cash-strapped CTA and allow it to eventually get out of the costly business of supplying fare cards. The CTA also will need far fewer transit card vending machines, which are expensive to buy and maintain, officials said.
“Moving away from producing our own fare media and maintaining transit card vending machines across the system will save the CTA at least $10 million a year over time,” Huberman said.
The CTA also could reap substantial royalties by offering a credit card company a half-billion transit-fare transactions a year, Huberman said. In addition to royalties, the companies would be expected to help pay for card-reading machines on buses and at rail stations, he said.
Huberman declined to provide potential revenue figures, preferring instead to see how the market responds when the CTA goes out for bids in early 2009.
The first article makes it sound as if VISA is mostly interested in larger cities, but what if all the major Ohio cities joined together? The combination of Columbus, Cincinnati, Cleveland, Akron, Dayton, Toledo, and Youngstown would represent a very large daily ridership. Imagine taking a trip to one of Ohio’s other large cities – perhaps even by train – and being able to use the same fare/credit card when you get there. Everyone in Columbus is originally from Cleveland or Cincinnati (just kidding of course), so I imagine this would be very convenient for people visiting family and friends.
Hey, maybe you could even buy your Ohio Hub train ticket with the card.
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Has anyone forwarded this to Marty Stutz at COTA? You should.
This is something that would not only bring convenience, but open up bus service to a whole new segment of riders: those who ride only an an as-needed basis….. often enough to justify a smart card, but not enough to warrant getting a monthly pass.
I doubt it has been forwarded to anyone since I just posted it last night, but I hear there might be COTA people who read this blog. Maybe Walker has her contact information though.
It’s in the 30 year plan and slated to happen in the next 5 years, if I am not mistaken.
I knew about the long-range plan but didn’t realize there was a scheduled implementation time for it. That’s good news. Nevertheless, I think partnering with a private company like VISA could save a lot of money for COTA while getting it done sooner.
I’ve experienced trial schemes for all-in-one debit/transit cards in London (UK) and NYC, and from my anecdotal perspective neither seems to have taken off. In the US market it would be introducing two new paradigms to consumers: linking bank accounts – and the protective paranoia that goes with them – with what are often seen as disposable or low-value transit cards; and ’smart cards’ are not yet standard in the US.
VISA (or whatever financial institution stalking this market) needs enough critical mass to sell this idea to governments. The cost and logistics of introducing any transit change is immense, replacing the ticketing machines/touchpads, signage, and to train staff. I wonder who pays for conversion, the tax-payer or the bank? Oh wait…
There’s a much longer conversation about the data that the bank gets from this about citizens movements. In the private sector this takes on an entirely new application and context. Though citizens in Hong Kong clearly got over it- their Octopus card does everything from tracking school attendance to parking meters to pop machines. (http://en.wikipedia.org/wiki/Octopus_card)
Trilobite,
Good points about the debit card issues. I think I would personally prefer a credit version.
Also, as a transit agency, I would definitely want access to the passenger movement data. It could be encrypted so I don’t know exactly who is riding where, but I want to know how many people are boarding and alighting at each location if at all possible.
More news from Chicago on this idea:
http://www.wbbm780.com/RTA-Sees-Chip-Embeds-As-Universal-Fare-Card-Soluti/3363383
Oops, took me oodles of time to check back on this-
It’s a double-edged sword; the data would be invaluable for transit authorities, but does an all-in-one smart card encroach on civil rights?
Here is an old (2003) article from when London introduced their Oyster smart transit cards (NOT a debit/transit hybrid):
http://www.paymentsnews.com/2003/09/bbc_smart_cards.html
For opting out, in London you can avoid being added to the database by simply not registering your Oyster card. However, if you a receive a discounted travel rate for being elderly, a student, or on social welfare, you must register your card. So there is a much higher proportion of youth and low-income people having their movements tracked (added to the database) than other groups in the population. That information can be subpoenaed.
But, if your bank tracks where you use your debit card, and you are forced by your city to use it for every train, bus, and taxi to get around, opting-out isn’t really an option. If the bank owns the card, and tracks the usage, for a government infrastructure, who owns the data?
‘valid commercial use’ of the data is another sticky territory. Valid means exactly what? To whom? A private bank and a local transit authority have very different ideas of how this information could be used/sold. Personally, this gets me riled up- if my movements are being tracked for market data, which will be sold for commercial use; shouldn’t I be paid for this? But that’s a pet peeve of mine…
But, let’s get a moment or perspective- all of these problems are inbuilt to hybrid/super smartcards in general, not specifically introducing them into Columbus to solve pressing transit issues. But, we’re not an island in Arawak City, and have to keep an eye on the larger context…