GTA Fare Integration: Session 4: Area 6
Table of contents
No headersThis Saturday afternoon session started slowly at 3:00 p.m. with about 8 attendees and was bolstered throughout the session by Metronaut "butterflies" with 15-20 attendees at its conclusion at 4:00 p.m. when Mischa arrived ringing the bell.
I was particularly interested in feedback on four tactical aspects of GTA Fare Integration:
1. Unlimited, flat fare (GTA) passes (e.g. TTC Metropass or GTA Weekly Pass);
2. Time-limited (e.g. 2-hour transfer any direction~ViVA, TTC St. Clair test) fare;
3. Fare-by-distance (both zone (YRT/ViVA/Vancouver) and true fare-by-distance (Tokyo);
4. Electronic fare card debit-a-ride (e.g. MTO/GO Presto test, MTA Farecard, London Oyster).
In addition Andrae & Tom Purves were interested in the related topics "How to integrate fares for regional travel", and "Transit Payment and Smart Fare Systems".
Please feel free to add your comments and recollections. I started manually taking notes 10-15 minutes into the session; not realizing laptop wiki input had not been assigned to the group. I apologize for any comments not included... I tried to be true to the original comments and included virtually all of them (with my commentary in brackets), so please add them to complete, correct any errors, omissions on my part and balance the wiki.
1. Unlimited, flat fare GTA "pass":
There was general enthusiasm for an unlimited (Metropass, GTA, Weekly, YRT, etc.) flat fare pass valid for the entire GTA.
One contributor mentioned the need for various kinds of passes for different travel (e.g. one transit system only, GTA wide, for seniors, university students, etc.). A TTC staffer mentioned that in addition to (TTC and other) monthly and weekly passes there already was a "GTA" pass—the weekly "GTA Pass" (good on TTC, YRT, Brampton & Mississauga at $47.00/week or $203.67/month). The challenge was there was no (provincial) funding support for such a pass on a monthly basis (and clearly the weekly GTA Pass is too expensive to encourage widespread GTA travel when it's priced substantially higher than the price of two monthly passes on any two transit systems).
A Metrolinx staffer assured that the Presto card would include capability for unlimited travel flat fare passes.
2. Time-limited fare:
There was general awareness of the time-limited two-way transfer (valid on YRT/ViVA and the TTC St. Clair test), but not a lot of personal experience or prior consideration as an alternate to a more complex zone/fare-by-distance GTA fare strategy. No one really embraced the concept with any passion... as it seemed it was the first time they had considered it as a possible GTA fare strategy to eliminate 416/905 fare boundaries (and their punitive 100% fare premiums).
One contributor mentioned, however, that several GTA transit properties (Brampton/YRT?) did accept transfers between their systems). The TTC's reluctance (to expand the St. Clair test) seems to be based on the ~$11M cost of implementing this fare system wide (TTC). Clearly, YRT, TTC, and MTO/Metrolinx need to research this option with riders to better understand it vs. fare-by-distance.
3. Fare-by-Distance/Zone Fares:
There was some passion and considerable debate for the pros and cons of this alternative; not surprisingly with folks from a technology background arguing in favour of it, whilst TTC staffers and a 905 Richmond Hill resident taking YRT/GO/TTC to school and back argued against the added complexity and cost vs. the present simplicity of TTC fare media (cash, tickets, tokens, passes). The RH student didn't want an electronic farecard if it would simply expedite charging him three transit fares—he wanted a lower overall "value" fare for his GTA travel. Another contributor said fare-by-distance in Washington DC "drove him crazy!"
One web programmer argued passionately that present technology allowed for an infinite variety of zone fare or fare-by-distance algorithms. Another person mentioned Tokyo's system where you need a card to know your fare: by-distance. (Reminding me of my visit to Tokyo as a student, and having to go to the tourist office to get an English credit-card size subway map so that I could compare it to the Japanese only-fare-by-distance map at the entrance to Tokyo subways stations. It was needed to pay the exact fare to your intended subway station, as each subway station had a unique fare map). I wondered if this programmer had considered how to communicate the tectonic shift from the present unlimited travel simple flat fares to true multidirectional complex fare-by-distance, regardless of technology's capabilities.
A concern about GO fares was they were not truly fare-by-distance—perfectly logical and linear as some shorter GO trips cost more than longer trips. The contributor advocated for a wholesale change to the current GTA fare structure to get away from double fares.
There was true ying-yang with one contributor advocating to abolish all fare zones, time limits and boundaries~"toss them out the windows" whilst another argued that rational fare-by-distance was the "way to go" as technology "made it simple"; another said it was "Unfair to pay three fares" and "On the other hand fare-by-distance was the way to go!"
To me it seems the tail is wagging the dog here. GO has pseudo fare-by-distance and a high Revenue/Cost R/C ratio (cost recovery of 86-89%). Fare-by-distance is a good cost recovery strategy, but does not encourage transit trips via simple, easy to understand flat fares. {GO is like Business Class transit with an average fare of $5.00 (vs. $1.72 for TTC and $2.13 YRT~March 2007). The TTC's R/C ratio is ~75% while YRT's is ~39% even with fares less than half of GO.} GO Transit thinks fare-by-distance is the best solution for it and local public transit. Ontario MTO and many Federal Transport Canada staff share this view.
With Toronto's transit market share or Modal split at ~24% and York Region's at ~7% Metrolinx needs to thoroughly understand the impact of zone or fare-by-distance fares on stimulating (or discouraging) GTA transit rides in the quantum needed to build transit share vs. the simpler time-limited transfer and unlimited zone pass fares options currently available on local transit systems but not GTA wide (save weekly GTA Pass).
I sympathize with the TTC concerns about the unknown capital, operating costs and ridership impact if fare-by-distance (electronic farecard) is imposed upon them... but recognize that the present TTC fare media and policies do nothing to promote true GTA transit integration without the punitive cost of a 100% fare penalty across Steeles or the prohibitive monthly cost of a weekly GTA Pass.
4. Electronic Fare Card (Presto debit-a-ride electronic fare card)
There was considerable interest, passion and discussion on the merits and costs/benefits of an electronic fare card. Not surprisingly those in favour included a. technologists/programmers, b. those with prior farecard experience (London's Oyster card), and c. Metrolinx staff. TTC staff advocated for the simplicity of the present TTC fare media against the unknown cost of implementing the Presto card across all GTA transit properties and the operating subsidies it would or would not require.
A contributor talked about the utility of the Oyster card and it's flexibility to offer a variety of fare options and new revenue opportunities. He said Oyster would charge a maximum $4 fare if the rider didn't tap out, or the cheapest available fare available if they did tap out (I don't even want to think about the complexity of that algorithm!)
Another contributor voiced an opinion that a fare card's biggest benefit was its ability to increase revenue (Hong Kong) by making it a universally accepted payment medium. Another argued to let Credit Card companies assume the risk and take advantage of their security and systems knowledge instead of Metrolinx developing it's own fare card.
There was some discussion about the exact nature of mechanics of the Presto fare card. A Metrolinx staffer said it was a tap-on/tap-off card. I suspect this is true of the limited Mississauga/GO/Union Station test. It would be horrendously complex for the TTC to implement tap-off given its integration of many surface routes with barrier-free subway access (no transfers needed). The impact on TTC speed of service with mandatory tap-off is scary to contemplate.
One person voiced his opinion that ease-of-use of the fare card was incredibly important in both acquiring and using the card. I presume he concludes the same about the fare structure underlying the fare card. Another said the same thing of the present TTC fare media: you put in a token and you can go anywhere and warned that fares being made more complicated would be an issue. It should offer convenience of usage, independent of service.
A transit enthusiast contributor argued for the operational benefits of the electronic fare card to allow much more frequent updates on rider data (from the present system of occasional manual "checker" audits) to virtually real-time dynamic daily data. Another transit enthusiast expressed a caution: warning against justifying the cost of implementing a farecard to obtain ride data as a tool for better operations planning and management.
Personally, I think this is the Province's real agenda in driving the GTA e-farecard, beyond making cross-GTA transit fares more accessible. It gives them an objective manner of allocating scarce operating and capital subsidies based on ridership. It solves their political dilemma in that the TTC with 50% of GTA population but ~85% of local public transit (ex-GO) could easily swallow up 100% of such transit subsidies; leaving the 905, also with 50% of population short of funds to build transit from the low single and double digits to catch up to the TTC's at 24% and onward to the 30%+ Metrolinx goal.
A respected transit advocate cautioned against the use of credit cards (whose companies were just salivating to be used as transit fare cards) in the hope of increased revenue—without a sound analysis of the total cost of implementation of a fare card against using the same funds for better basic transit service (more buses, streetcars, subways, etc.)
One contributor suggested variable transit pricing with higher fares during rush hour than off-peak. I thought this was an interesting idea, much like the 407 Toll highway early on. I wouldn't rule it out... maybe it has a role to play... sometime in the future when there are toll roads across the GTA, a GTA electronic fare card in use with a value GTA fare or pass and transit systems at capacity. Demand pricing may well be needed to moderate peak travel.
The social issue of whether the electronic fare card should address transit for the poor was raised with no conclusions voiced.
A Metrolinx staffer mentioned the utility of a fare card to an occasional transit user living in the 905, versus having to pay three (905/GO/TTC) cash fares. I commented that Metrolinx would never build transit modal split back to 30–35% from 24% in Toronto and from 7% in York Region by targeting occasional transit users. Metrolinx' Bold strategies were needed in Toronto and perhaps even stronger "MEGA" strategies in the 905. Another contributor also suggested that the fare card should address not only greater convenience for occasional transit users (the so-called "choice riders") but also heavy users as well.
The convenience of an electronic fare card to charge two transit fares,
rather than one lower integrated (pass, time-based or fare-by-distance) "value" fare will do nothing to encourage GTA transit in the quantum needed to
rebuild transit modal split to the 30–50% level to really make a dent
in car usage and road congestion.
All-in-all it's clear Metrolinx and the TTC need to better understand the transit riders' desires for a simple, easy-to-understand GTA fare system that doesn't discourage GTA transit with a 100% fare premium for travel across the system boundaries.
OTHER
I. Presto name equity vs. Metropass
When the subject was raised I was surprised by the lack of enthusiasm for the "Presto" electronic fare card name. It is premature to call it a "Brand" after a few months of a limited local Mississauga/GO/TTC Union Station test. One contributor asked, "What's Presto? It could refer to almost anything and has no obvious link to transit."
The TTC's Metropass was much more warmly received as an electronic farecard (brand) name, undoubtedly due to its true brand equity after 28 years in the market with Adult, Monthly, MDP, Group, University, etc. options.
I suggested some hybrid names... GO MetroPass or Metro GO Pass, without any consensus or preference expressed. Whatever the brand name, it needs to be evaluated thoroughly against newcomer Presto and the considerable transit brand heritage of the TTC Metropass.
II. Knowledge of TTC vs. YRT Adult Fares
When I asked for a show of hands for those who knew the TTC adult fare, most hands went up--almost universal, not surprising given MaRs/UofT location. When asked the same question about the YRT Adult fare only 3-4 hands went up.
Clearly, Metrolinx has to understand the true demand for cross GTA transit travel (2006 Transportation Today study and it's ilk) not only with the present punitive 100% fare premiums for cross GTA system travel, but with an integrated GTA "value" fare (that is less than two transit fares) to drive such ridership.
- Tag page
-
- What links here
List of Transit Smart cards:
http://en.wikipedia.org/wiki/List_of_smart_cards
Hong Kong's Octopus:
http://en.wikipedia.org/wiki/Octopus_card
~
Hong Kong MTR:
http://www.mtr.com.hk/eng/homepage/cust_index.html
http://www.mtr.com.hk/eng/whatsnew/images/passenger_guide_and_octopus_fare_eng.pdf
New York's MetroCard:
http://en.wikipedia.org/wiki/MetroCard_%28New_York_City%29
London's Oyster TfL:
http://en.wikipedia.org/wiki/Oyster_card
Seoul T-Money:
http://en.wikipedia.org/wiki/T-money
Washington DC's SmarTrip:
http://en.wikipedia.org/wiki/SmarTrip
Posted 19:31, 16 Apr 2008 (3 minutes ago)
edited 17:58, 16 Apr 2008
Reasons for New York’s
Public Transport Boom
The impressive surge in public transit use from 1995 to 2000 was partly due to the economic boom in the Greater New York Metro Area during the late 1990s. …
A second factor in public transport’s success has been a sharp improvement in fare policy. NYCT provides the most dramatic and impressive example of how crucial fare policy is. In 1997, NYCT introduced the MetroCard, which for the first time provided riders in New York with a quantity discount (11 rides for the price of 10) and equally important, a free transfer between bus and subway. For many passengers, it represented a 50% discount on what they had formerly paid, and it probably explains why bus usage has risen even more than subway usage. Transfers within the subway system (among lines) have been free for decades, but the MetroCard essentially made free any bus rides to access subway stations. Moveover, for the first time, monthly, weekly and daily passes were introduced in 1998, allowing unlimited travel for frequent travelers. By 2000, 67% of all riders used some form of discounted MetroCard. NYCT estimates that the various discounts reduced the average fare by 22% from 1997 to 2000.
Source: Renaissance of Public Transport in
the United States? John Pucher (pp. 43–44) http://www.vtpi.org/tqtransi.pdf
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Mr. Pataki's Fair Fares NY Governor's "Imaginative discounts in transit fares" N.B. no "Someone's got to pay for it..." standard TTC dogma for the last 2 decades or so:
http://query.nytimes.com/gst/fullpage.html?res=9A04E6DE143CF93AA35751C1A961958260
Wednesday, April 16, 2008
Opinion
WORLDU.S.N.Y.
Mr. Pataki's Fair Fares
Published: December 9, 1997
Gov. George Pataki put himself behind imaginative discounts in transit fares yesterday when he endorsed unlimited-ride monthly, weekly and daily passes and other breaks for New York City's subway and bus riders. The Governor's plan is sensible and superior to that proposed by city officials. He needs to insure that the Metropolitan Transportation Authority's board, which he dominates, approves the development of discount options and gives transit executives freedom to experiment and fiddle with fares at the M.T.A.'s next board meeting later this month.
Mr. Pataki's proposal will lessen the transit drain on many riders' wallets, and it suggests that those who share responsibility for governing New York and nurturing its economy want the city and region to offer the array of rapid-transit fares long taken for granted in London, Paris, Tokyo and other world capitals and in U.S. cities as well.
The Governor's plan sets out to introduce deep-discount options in exchange for unlimited rides for customers with different needs, desires and incomes: a monthly pass priced at $63 (the cost of 42 rides), a weekly one priced at $17 and a one-day $4 pass, as well as breaks for senior citizens and users of express buses. Equally important, his proposal will allow the transit executives to begin to exploit the Metrocard's vast untapped power to lure different kinds of customers to ride more often. Designing an off-peak fare that can relieve rush-hour overcrowding should be on the M.T.A.'s agenda.
While not much was said about when these fare options will kick in, it appears that the M.T.A. is poised to roll out its set of discounted, unlimited-ride fares next summer. That is too far off. It should only take about 90 days to assess the fare structure's fairness to riders of various incomes, adjust accordingly if necessary, and build customer awareness.
With such a long lead time, transit executives might well seek advice on fine-tuning the pricing from an advisory panel composed of individuals sensitive to the city's social goals and others who are experts at defining the right price points for generating revenues. Few issues have such impact on individuals and businesses as the fares charged for mass transit.
edited 17:45, 16 Apr 2008
TfL: What is Oyster:
http://www.tfl.gov.uk/tickets/oysteronline/2732.aspx
TfL: Why Should I switch to Oyster:
http://www.tfl.gov.uk/assets/downloads/tickets/english-large-print-why-switch-to-oyster.pdf
TfL: Get the Most out of your Oyster:
http://www.tfl.gov.uk/assets/downloads/tickets/english-large-print-why-switch-to-oyster.pdf
TfL Oyster Fares:
http://www.tfl.gov.uk/assets/downloads/guide-to-fares-and-tickets-08-01-02.pdf
edited 17:36, 16 Apr 2008
Oyster and Octopus - a tale of two cities' contactless cards
Does London aspire to Hong Kong's micropayments success?
By Dan Ilett
Published: 28 June 2006 16:40 BST
http://www.silicon.com/research/specialreports/china/0,3800011742,39159958,00.htm
In his travels for silicon.com's latest special report, about business and technology in China, Dan Ilett encountered Hong Kong's fabled contactless payments card, Octopus. But is Octopus' grip on this market firmer than Oyster's?
This week Visa joined the race to become the accepted standard for contactless payments in the UK. The company is piloting a contactless card scheme in London to compete with MasterCard's alliance with RBS and even Transport for London's (TfL) Oyster card.
To many British people the concept of contactless payment is relatively new but in Hong Kong it has been around for almost a decade.
There are 13.4 million Octopus cards in circulation and only seven million people live in Hong Kong, while daily transactions of 9.4 million total almost £5m.
The Octopus card was first introduced in Hong Kong in 1997 as a public transport smartcard, much the same as London's Oyster card is now, but shareholders quickly recognised the potential to extend the use of the cards onto the high street. In 2000, Octopus soon obtained a 'deposit-taking company authorisation' from the Hong Kong Monetary Authority to expand its use to a number of different applications.
Today more than 50,000 Octopus card readers can be found, not only in most modes of public transport in Hong Kong but in other places such as car parks, shops, cafes, wet markets - which sell livestock and fish - and leisure facilities. They can even be used for access control in schools and apartment blocks.
People can travel around the city and pay for items in some shops without the need for cash.
Chris Skinner, associate director at analyst Tower Group, says: "It's been around for years so it's not surprising it's leading the world. I often think that it's a disruptive payment method for banks. Any bank that partners with a scheme like this will come out a winner."
RBS recently partnered with MasterCard to pilot its own version of a contactless payment card in Edinburgh.
An estimated 95 per cent of Hong Kong residents aged between 16 and 65 possess an Octopus card, according to Octopus Holdings. There are 13.4 million cards in circulation and only seven million people live in Hong Kong, while daily transactions of 9.4 million total HK$69m (almost £5m).
Each card, made by Sony, has a built-in microchip that can act as a digital purse, ticket and key - transmitting signals by radio frequency.
For financial transactions users wave their card over a reader and the correct amount is deducted from the card automatically. But contactless payments have advanced so much in Hong Kong that last year shops began to offer loyalty points to customers who use them - 800,000 people have already signed up for the scheme.
Graham Taylor, Gartner distinguished analyst, says: "In Hong Kong just about everyone has one. They were the first [place] to extend it beyond the transportation system.
"But not everyone agreed with it and it's not without problems. Some merchants didn't want to get involved because there has to be some sort of interchange charge. And [to do it] the transport authority in effect had to become a money issuer."
But back in the UK, plans to add electronic wallet functionality to the Oyster smartcard ticketing system suffered a major setback earlier this year.
In 2005, TfL announced it had shortlisted seven potential suppliers to transform Oyster from a ticketing system into a means of paying for goods such as coffee and newspapers. Trials were scheduled to start before the end of the year but didn't materialise. And, at the end of April, TfL said none of the suppliers had been able to meet its criteria. The rollout was put on hold.
TfL has also had some problems negotiating ticketing with overland rail companies because of disagreements over who should pay for the card readers.
So while it's taking time for TfL to achieve a contactless payment standard and a ubiquitous ticket for Londoners, the likes of MasterCard and Visa have had enough time to realise contactless payments are a huge opportunity.
Gartner's Taylor adds: "Here it's more complex because you have a number of train companies that have struggled to do it. Basically Visa and MasterCard have realised it's going to get big and they should take part. It would suit them if they were the clearing house. It would not suit the transport companies to hand the revenue over to Visa and MasterCard. And that's where the battle will occur."
edited 17:39, 16 Apr 2008
http://www.tokyometro.jp/global/en/index.html
Tokyo Metro Convenient Value-added Tickets:
http://www.tokyometro.jp/global/en/ticket/valueticket.html
Tokyo Metro PASMO electronic farecard:
http://www.tokyometro.jp/global/en/ticket/pasmo.html
Tokyo Metro Using the Subway:
http://www.tokyometro.jp/global/en/service/using.html#u02
Confirming the entrance
Tokyo Metro
There are two subway operators in Tokyo, Tokyo Metro and Toei Subway. At the entrance to each station, you will see the subway sign and the name of the subway station. Be sure to remember the station name and number, and line color of the subway line you want to ride!
Tokyo Metro line station names/numbers and line colors
Finding the fare
Use the English fare chart near the ticket vending machines to find the price of a ticket to your destination.
You can also look up fares for the Tokyo Metro and Toei Subway lines using the link to "Tokyo Transfer Guide" below.
Tokyo Transfer Guide (English Only)
Buying your ticket
Buy your ticket at a ticket vending machine.
You can use the ticket vending machines to purchase regular tickets, Coupon Tickets, One-day Open Tickets and PASMO IC cards.
Insert coins or bills and select the button displaying the price to your destination. (Note: Some machines do not accept ¥2,000, ¥5,000 or ¥10,000 notes.) Retrieve your ticket and change.
Entering the fare gate
Insert your ticket into the slot located above the green arrow on the fare gate. DON'T FORGET to retrieve your ticket as you pass through.
If you are using a PASMO card, swipe the card over the card reader on the gate, which is indicated by a blue light.
For detailed information on the PASMO IC card, click here.
OK to pass
Not OK to pass
PASMO card reader
Riding the subway
Boarding guides
Line up behind the white line on the platform at the guides where the doors will open. Wait for the alighting passengers to finish before boarding the train. Please do not rush when trying to catch the train.
Some subway lines have adopted women-only cars during the morning rush hour so women and young children can ride with a sense of security.
Set your cell phone on silent mode and please refrain from using it during your ride. Turn your phone off when near courtesy seats.
For further information, read the section on Subway Manners.
Fare adjustment
Fare adjustment machine
If you traveled further than the ticket you bought allows, pay the extra fare at a fare adjustment machine located near the fare gates. When you place your ticket into the machine, it will display the fare difference you owe. After inserting the difference, take your ticket and pass through the fare gate.
Exiting the fare gate
When traveling with a regular ticket, the gate will not return your ticket. However, when using a One-day Open Ticket, be sure to retrieve it as you pass through the gate.
Orange Transfer Gate
Changing Trains
In some subway stations you must pass through the fare gates when transferring lines, even when they are both Tokyo Metro lines. In that case, when changing from one Tokyo Metro line to another, pass through the special orange transfer gates.
If you take longer than 30 minutes to change trains, you will need to purchase a new ticket. However, when using a PASMO IC card, be aware that the appropriate fare will be deducted automatically the next time you pass through an entrance gate.
Passengers are required to pass through the orange transfer gates (when exiting one line to transfer to another) at the following transfer stations:
Ueno, Mitsukoshimae, Otemachi, Ikebukuro, Iidabashi, Kudanshita, Hibiya⇔Yurakucho, Awajicho⇔Shin-ochanomizu, Ueno-hirokoji⇔Naka-okachimachi
Finding your exit
Yellow exit sign, vicinity map
After exiting the gate, you can find your exit number on the yellow exit signs and on the vicinity map. After finding your exit number, follow the appropriate exit signs.
http://www.apta.com/services/intnatl/intstudy/fare_collection_08.cfm
Invitation to Join APTA Delegation on Fare Collection Study Tour to Asia
Continuing a tradition of exploring and learning from public transportation systems around the globe, APTA will conduct a study mission to Hong Kong, Korea, and Japan in June 2008. The ten-day trip, open to both public and private sector APTA members, will focus on fare collection with an emphasis on electronic payment systems and innovations. APTA invites interested members to join the delegation by contacting Jessica Bechir, APTA’s program manager for international programs, at 202-496-4833 or jbechir@apta.com
Participants in the study mission will meet in Hong Kong on Sunday, June 15 and conclude their program in Tokyo, Japan on Wednesday, June 25. In addition to meeting with fare systems professionals in those two cities, the group will also visit the transit system in Seoul, South Korea.
In Hong Kong the Octopus card leads the way in electronic fare payments. The cards are used by 95 percent of the population of Hong Kong aged 16 to 65, generating over 10 million daily transactions worth a total of about HK$29 billion (US$3.7 billion) a year. Originally launched in September 1997 to collect fares for the city's mass transit system, the Octopus card system has since grown into a widely used payment system for virtually all public transport in Hong Kong. It is also used for payment at convenience stores, supermarkets, fast-food restaurants, on-street parking meters, car parks, and other point-of-sale applications such as service stations and vending machines, as well as by students for roll call and administrative tasks such as library loans.
Next the tour will travel to Seoul, South Korea. Hosted by APTA member Seoul Metropolitan Rapid Transit Corporation (SMRT), group members will explore fare collection and the T-Money electronic payment system in Korea. The group will meet with Korean Smart Card Corporation (KSCC), the private developers of the smart card used by both train and bus riders. KSCC collaborates with SMRT and the bus contractors on fare system operation, settling fares, and issuing cards. KSCC handles about 22 million boarding and alighting data per day. Since implementation in July 2004, T-Money and the electronic payment system used in Seoul has become an industry benchmark for smart cards in large cities
Moving on to Japan on Saturday afternoon, the group will meet with Tokyo Metro, East Japan Railway officials, and the Japan Bus Association. Tokyo boasts one of the largest metropolitan areas in Asia. Over 33 million passengers travel in the city every day and nearly 80% use public transportation. Japan has been a leader in innovative fare collection for many years, developing cutting edge smart card technologies linked with innovative partnerships.
In Japan, JR East led the way with the development of the Suica card which debuted in November 2001. Soon after this other operators realized they had to make similar advancements, so they joined hands with JR East and created a card that could be use on any train or bus in the Tokyo area. Their new cards came out in March 2007. It was an instant hit, with one million cards sold in just four days. Most recently JR East and All Nippon Airways (ANA) announced a partnership that will allow smart card holders to use the Suica card for paperless air tickets as well as fares on trains, buses, subways, and monorails. The card will also function as a credit card for retail purchases and be linked to ANA mileage points.
Other topics the delegation will explore include collaboration with credit card and mobile phone companies, electronic payment system implementation and marketing, and the operational implications of new fare systems.
US fare systems professionals agree that transit systems in Asia are the global leaders in innovative techniques, technologies, and applications. This study mission is designed to maximize your exposure to the professionals who have developed these applications, and to learn about their visions for the future of fare systems. It will be a unique cultural and learning experience promoting information sharing and professional networking.
Due to the short length of the study mission, the schedule is an aggressive one with little time for personal activities by the participants. The cost of the study mission is $3,500 per person for a shared room or $4,125 for a single room, which includes local and intercity transportation in all countries and hotel accommodations with breakfast each day. APTA will assist solo travelers who are interested in sharing a room on a first come first served basis, however we cannot guarantee that there will be a match for everyone. Participants will be responsible for the cost and arranging their own travel to and from Asia (arriving in Hong Kong and departing from Japan), as well certain meals and personal incidentals. Several sponsored meals can be anticipated. Scott Yeomans of Executive Travel is available to assist with travel arrangements for mission participants upon request (syeomans@exectravel.com; (202) 828-0030).
Participants should plan to arrive at the designated hotel in Hong Kong no later than 3:00 p.m. on Sunday, June 15. A program booklet with system and city profiles, as well as the mission itinerary, will be provided prior to departure.
To reserve a space in the delegation, a good faith deposit of $500 is due to APTA by April1, with the balance due April 25. Space is available on a first-come first-served basis; the delegation is limited to 15 participants. Reservation forms are available on the APTA website at http://www.apta.com/services/intnatl/ or through Jessica Bechir, Program Manager- International Programs, at (202) 496-4833 or jbechir@apta.com.
http://www.cardtechnology.com/article.html?id=20060201YY60X7EZ
Closing the Gap: Will Banks and Transit Create a Common Contactless Card?
By Thad Rueter
Agents working long, stationary shifts in subway ticketing booths selling tickets is not Michel Barjansky's vision of their job description. Barjansky, electronic ticketing manager for Paris Metro operator RATP, says he would rather have those agents out on platforms, helping the 1.3 million daily riders navigate the system and performing other customer-relations tasks.
"We don't want people practicing card issuance," he says. "This is something we want to outsource. Any third party that is ready to issue cards that are compliant with our standards are welcome."
One possible solution? Have a bank issue chip-based contactless cards that could be loaded with fare-payment applications. That could allow transit operators to focus on running trains and buses, and cut their card-issuing and customer service costs.
Many transit managers share Barjansky's view. Card issuing "is something we would like to step away from," says Greg Garback, executive officer, department of finance, for the Washington Metropolitan Transit Authority in Washington, D.C.
And they are encouraged by the recent rush by banks and credit card issuers to offer contactless cards-using fundamentally the same tap-and-go technology many transit operators use-that consumers can use to quickly make small purchases. If contactless smart cards can be used for daily purchases of coffee and newspapers, why not for subway, train and bus fares?
Agreeing on a technology standard is, for once, not the problem. Both banks and transit agencies are using contactless smart cards based on the same international contactless standard, ISO 14443. "The technology is converging," says David deKozan, vice president of marketing for U.S.-based Cubic Transportation Systems.
What is more, the idea figures to have appeal to financial institutions introducing contactless cards. After all, wouldn't the many commuters who use mass transit in big cities like New York, London and Taipei love to have one card that gets them on the bus and also pays for lunch? Both sides see the appeal, but they each have very different priorities and requirements, which means progress may be by fits and starts.
"The main challenge is definitely not on the technical issues, as the smart card technology could perform complicated transactions," says Tony Yeung, operations manager at Hong Kong mass rail operator MTR Corp., and chairman of the information technology and innovation commission for international transit association UITP. "The main challenge is to bring different parties together into balanced business relationships."
The potential for convergence is there, largely because more than 100 cities around the world have introduced chip cards for mass transit fare payment in the past decade since Seoul and Hong Kong pioneered use of the technology.
More contactless transit cards are being issued each year. Transit consumed an estimated 95 million smart cards in 2005, vendor association Eurosmart says; other vendor estimates put yearly demand at up to 150 million cards. With millions of riders each day in the biggest cities, transit represents, in theory at least, a prime market for issuers looking to gain revenue and top-of-wallet position for their contactless credit and debit cards.
Supporters of such schemes point to existing electronic-money and transit projects in Hong Kong and Tokyo, where rail operator JR East issues the Suica transit card with a retail e-purse. Later this year, the 2.6 million Londoners who use Oyster contactless cards for transit soon could have an electronic money application as well. Washington D.C. transit officials have begun a pilot with U.S. credit and debit card issuer Citibank that could involve 20,000 cards. In Singapore, QB Pte Ltd. has a contract to promote merchant acceptance of the ez-link contactless card issued by the main transit agency, the Land Transport Authority.
Financial institutions in South Korea issue credit cards that can be used for fare payment. Visa International, which says that since 2004 transit has been a common feature on Visa cards issued in South Korea, says card activation rates increase 27% and spending 9% when transit is involved. "We gave consumers another reason to use the cards," says Stephanie Ericksen, Visa International's vice president of product technology.
Focus on Retail
But just because smart cards used for transit and retail purchases are close technological cousins doesn't mean the two sides will come together and flood the market with multiapplication cards anytime soon. For one thing, issuers of contactless payment cards have a big enough job now just getting the cards into the hands of consumers. "We continue to focus on the retail side for the time being," says Scott Rau, senior vice president, card services, for U.S.-based JPMorgan Chase & Co., which says it has issued more than 6 million contactless "blink" cards in the United States since June 2005 (see page 9).
Also, transit agencies are busy coming up with smart card schemes that can be used on neighboring, but different, transit systems, a process that often involves political and budgetary rivalries. Transit systems have complex fare structures, a potential logistical knot when it comes to a transit-and-retail card. For instance, some transit systems require riders to tap their cards when they enter and when they leave, and charge them according to the distance traveled. The contactless products being promoted by such payments organizations as Visa, MasterCard and American Express are not designed to accommodate such a two-step process.
Clearing and settlement also could become an issue. And there are decisions to be made about prepaid versus postpaid fares, and uninterrupted access to operational data upon which transit agencies rely.
Also, while contactless payment could be headed for a breakthrough year, it is by no means certain that enough consumers will put chip-based cards into their wallets to justify further efforts in transit. Furthermore, transit agencies usually serve large numbers of lower-income individuals. "Some may not be attractive as credit card holders," says Cubic's deKozan.
Contactless payment, though, is nearing the end of its infancy, which could prove beneficial for transit. "Within a few months, we should be close to obtaining critical mass. At that stage, issuers will look for some sort of differentiation," says Rahul Gadkari, field marketing manager for France-based smart card vendor Axalto.
That likely will involve different form factors-creative card shapes or key fobs--and adding applications--transit, perhaps, or loyalty programs-to existing single-application payment cards. Even if issuers step further into transit market, it is uncertain what kinds of cards will result. "There could be three or four different models," Gadkari predicts.
Probably the most famous model is the Octopus card in Hong Kong. Introduced in 1997, the card added nontransit payments in 2002. Approximately 13.5 million Octopus cards were circulating as of early January. About 95% of Hong Kong's adult residents who are 65 and under carry an Octopus card, a penetration rate that any issuer-transit or financial-would envy. About 3,000 stores and restaurants, plus some 10,000 parking meters, accept the stored value cards, says Eric Tai, Octopus CEO.
Daily transactions stand at about 9 million, with average daily nontransit spending at US$2. Consumers add value to cards at manned point-of-sale terminals that accept Octopus for payments, plus self-service recharging machines and some ATMs.
Octopus, despite its ubiquity, has had a hard time weaning customers from cash for retail payments. Almost 20% of spending by Octopus cardholders comes from nontransit sources. Tai says. That's up from about 15% in early 2005, but less than the 35% allowed by the deposit-taking license under which Octopus runs its electronic money scheme. Tai says he hopes the nontransit figure increases to 30% by year's end.
Another problem Octopus has, and which could be faced by other operators, is the reluctance of some merchants to pay card-transaction fees. At least some outlets of a major fast-food chain in Hong Kong, Maxim's Cake Shops, left the Octopus program because of fees. A few Starbuck's Coffee shops also left the program.
Tai says fees vary based on the size of the business, but he would not give specifics. The fees are believed to be around 1% of the purchase amount. In other projects, when a credit or debit application is used alongside transit payments, normal interchange fees apply, according to executives from MasterCard and Visa.
Some transit operators speak about Octopus with more than a little professional awe. One reason is that different segments of the Hong Kong mass transit system work under unified standards, says Thomas Parker, who monitors unified fare schemes for the American Public Transit Association, and is in charge of automatic fare collection for Bay Area Rapid Transit, the largest of about two dozen transit operators in the San Francisco region. Another reason is that Octopus basically set up its own system for retail payments.
The Octopus e-purse is being used as a rough model by Transport for London as it adds an electronic purse to Oyster contactless transit cards, a TfL spokesperson says. TfL, though, cannot function as a bank. In mid-January, TfL was in final negotiations to add an electronic purse. Among the bidders were major banks Barclay's and Royal Bank of Scotland, along with a group that includes U.S.-based financial services company JPMorgan Chase, according to TfL. Transit and banking officials declined to comment further.
In southern Taiwan, banks are issuing the MasterCard-branded TaiwanMoney Card, which combines transit and retail functions on a dual-interface-that is, contact and contactless-chip that complies with the international EMV smart card standard. About 2,000 of the cards have been issued so far, says Art Kranzley, executive vice president at MasterCard International.
Seven cities in Taiwan worked together to help create this common transit card, which supports MasterCard's contactless credit and debit application, PayPass. Cards can be loaded at point-of-sale terminals and ATMs, and clearing and settlement takes place through cardholders' bank accounts, he says. Transit and nontransit payments will be made from separate purses.
In South Korea, at least a dozen issuers have in the past few years issued credit cards with contactless chips for transit fares, including postpaid fares. Commuters in Seoul can use the T-money transit and retail card. Updated transaction volumes for retail payments were not available, but an official involved with the project told Card Technology late last year that volumes were small.
Visa says its contactless cards issued in Korea have transit applications separate from the retail payment feature. Cardholders can use their regular Visa accounts to buy transit passes, which are then stored on the chip, says Ericksen, the Visa vice president. Cardholders to cover fares from a prepaid transit account.
Issuers in South Korea and Japan also allow for postpayment of fares. The Surutto-Kansai group, which operates transit for the Kansai region, Japan's second largest metropolitan area, since 2004 has issued postpaid "PiTaPa" cards. The group is made up of private transit operators, including those that also own department stores. The group collects fares monthly from cardholders' debit accounts. Customers can use the cards for retail purchases and to earn loyalty rewards. Cardholders undergo credit checks and face spending limits for both transit fares and retail purchases. A few credit card companies have also expressed interest in issuing cards.
Another model is to put a contactless chip for transit onto a card with a magnetic stripe for retail payment, as South Korean issuers have done in the past. That's what's also happening in a pilot in Washington, D.C. Since November 2004, a small number of Citibank magnetic stripe cards with 2K memory chips have been issued to commuters, says Garback, the agency's finance executive, as well as chairman of the Smart Card Alliance, a U.S.-based industry association. The pilot is scheduled to end in 2007, and will involve no more than 20,000 cards, according to current plans.
Convenience stores and cafes are located at exits and entrances of transit stations throughout the system, he adds. For now, the transit chips can be loaded at vending machines, but he hopes one day the cards could be loaded over the Internet, or tied to cardholder bank or credit accounts, something commuters can already do with transit-only smart cards in some cities. He declined to offer details about the progress of the pilot, and Citibank did not respond to requests for comment
Hesitation from banks
It is unclear just how interested banks are in working with contactless transit, especially with major banks mum about their plans. Garback says the interest is relatively light, but increasing. "Various agencies are getting into the conversation phase with banks," he says.
But the failure of previous bank-run e-purse programs, and the investment of European banks in contact smart card technology, may be giving them pause when it comes to transit, says Barjansky, of the RATP in Paris.
"Nobody has made money with an e-purse," he says. European issuers found it hard to make money on low-value retail purchases. Cardholders found that e-purses were inconvenient to load with value, and moved increasingly to debit cards. Barjansky adds that banks in Europe are busy with migrating to the EMV international smart card standard, making contactless transit less of a priority.
Another factor delaying efforts is that transit agencies are busy with their own fledgling smart card projects.
First, regional transit cards
In San Francisco, for instance, which has the third-highest median household income among major U.S. cities-and thus presumably commuters who banks would view as attractive customers-transit officials have been enthusiastic about establishing partnerships with banks. But for now their focus in on getting various Bay Area transit agencies to use a single smart fare card, a project that has been regularly delayed. Retail is not the main priority.
"This larger vision is just something that will have to wait," says Randy Rentschler, legislative director for the Metropolitan Transportation Commission, a San Francisco-area planning agency. He adds there has been little interest so far from banks about contactless transit in the Bay Area. "We really expected the banks to be the leaders," he says. "It surprised us that banks did not come in."
In the Netherlands, Trans Link Systems is developing a nationwide smart transit card. CEO Jeroen Kok says 10,000 cards have been issued so far, with 300,000 expected to be issued by the end of 2006. "Our philosophy is to first go with transit," he says. "That's difficult enough. There's still a lot of work to be done in this area (interoperable transit cards)."
Coming up with a common transit smart card is probably the only concrete project that makes sense now for most transit agencies. That's because banks have shown few signs they are aggressively targeting the transit market, says Michael Laezza, vice president of sales for Australia-based transit systems vendor ERG Group.
Among the questions contributing to the hesitation is that of speed. Transit riders need to go through gates as quickly as possible; the top limit for a transit contactless transactions is about 250 milliseconds. Contactless transactions using the banks' "quick" EMV schemes are said to take a half second or more.
Another question is whether a joint card scheme would involve authorizing payments on the spot, the way bank cards work in many advanced countries. The alternative is to send those payments in batches overnight-this is called offline authentication. "The transit world is offline," says transit and contactless payment consultant Gary Yamamura, of U.S.-based Three Point Consulting.
Security and privacy also concern vendors and transit officials. But transit and payment functions could be divided on chips, with firewalls protecting the applications, says deKozan, of Cubic. This could be important because commuters might not want financial institutions to know where and when they use transit systems.
Another issue is how fees will be divided among transit agencies and card issuers, and whether new schemes will save transit agencies money.
"We don't want to pay any more than we pay today," says Barjansky. He could not say exactly how much the actual card, its delivery and management now cost except that it is no less than "several euros." At this stage, it is hard to say whether a transit operator would see savings if a bank issued that transit card.
As it stands, transit agencies are investing large sums of public monies on fare-collection upgrades and smart cards projects with no help from banks.
In the New York City area, for instance, the Port Authority Trans-Hudson commuter train system is testing a smart fare card system, a spokesman says. The test follows installation of new turnstiles in 13 rail stations, part of a $69.9 million project. Long term, the agency hopes to play a part in expanding a smart card fare-collection system to other New York-area transit agencies.
In effect, many transit agencies are becoming more involved in card issuing, not less. "If we are building the infrastructure and prove it works, could (the private sector) dream up a better solution?" asks Rentschler, who works with San Francisco transit agencies. "It's possible."
More talking between card issuers and banks is sure to come in 2006, especially if contactless payments prove popular among consumers, and transit agencies can successfully introduce smart fare cards that work across entire regions or nations. But it seems doubtful that agents will be able to leave ticketing booths anytime soon.
MULTIAPPLICATION TRANSIT CARDS
LOCATION PROJECT
Hong Kong Octopus
London Oyster
Washington DC Citibank
Taiwan TaiwanMoney
Seoul, South Korea T-Money
Tokyo Suica
Moscow Moscow Social Card
Singapore ez-link
Kansai, Japan PiTaPa
NOTES
13.5 million cards in circulation
Final negotiations underway for e-purse application
Pilot to include up to 20,000 cards
2,000 multipurpose transit/payment cards issued so far
Cards allow retail discounts and cash back
Many of the cards allow for retail purchases
3 million to 4 million cards issued
At least 600 retail outlets accept cards
Plans call for 5 million cards; most if not all postpaid
Source: Card Technology; transit officials (c) 2006 Card Technology and SourceMedia, Inc. All Rights Reserved. http://www.cardtechnology.com http://www.sourcemedia.com
(2006-02-01)