May
09

MetroCard replacement to be an ‘E-ZPass for Transit’

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While the demise of the MetroCard is still a few years away, the MTA already knows what its next-generation fare payment technology will resemble. In fact, the authority has produced a 140-page “Concept of Operations” that includes, according to the authority, “a detailed definition of what the MTA wants the system to do.” It does not, however, offer a technical solution for the system, and to that end, the authority will present its new fare payment system to an extensive group of industry experts this week.

Due to the demands of law school, I’ve been sitting on this story for a week because I simply haven’t had time to parse through this extensive PDF file, and over the weekend, the Daily News spilled the beans. Right now, the MTA is seeking public comment through the end of May on its concept of operations. It will host a meeting on Tuesday with a group of over 70 companies. Those attending the meeting include everyone from Google and HP to AT&T and Verizon to Visa and Mastercard and everyone in between. It is the next step as the MTA continues to beat the death drum for the MetroCard.

So what exactly does the MTA want its future fare-payment system to do? The agency’s CFO Charlie Monheim said to the Daily News that the new fare payment system Card will be “an E-ZPass for Transit,” but that’s a rather vague summary. The extensive PDF provides a glimpse at the card. By and large, the authority hopes that straphangers will use their contactless debit and credit cards for subway travel. This move is as expected after multiple trials along the Lexington Ave. line.

“MTA wants to accept bank and third party issued credit, debit and prepaid cards directly at the turnstile and farebox unit for fare payment, as a merchant in payment industry terms,” the document reads. “Which card the customer uses will be his/her choice as long as it is contactless and has the appropriate spending authority. PIN-only debit cards will not be accepted at the readers. Fees for card transactions at the reader are expected to cost the MTA less than cash transactions today at the vending machines, station booths and farebox units.”

The MTA says it will continue to rely on open standards as well. To avoid making the same costly mistakes it made with the MetroCard, the authority will turn to open standards to “create a competitive market and more choice.”

For those who do not have the necessary access to a bankcard or do not want to use their debit or credit cards for subway fares, the MTA will also offer a new fare media currently entitled the MTA Card. This will be a contactless pre-paid fare card issued by the MTA that comes with a magnetic strip for reloading. The authority is hellbent on eliminating magnetic-strip technology, something that was obsolete by the time the MetroCard made its debut. Magnetic strips, the document says, are “not appropriate for the high volumes and rapid transaction times required for public transportation.”

These cards will operate on a “closed loop,” good only for travel on MTA rail roads. It will be available for purchase through one channel only — either a third-party or a white-label arrangement with a payment industry organization. It will be available, for a one-time retention fee, for purchase and then can be reloaded throughout the system. It sounds quite similar, in fact, to the DC Metro’s SmarTrip card.

Overall, the authority is asking the industry to develop something that is “future-proof.” Says the Concept of Operations: “MTA wishes to build a system based on technology where the choice to renew components or subsystems or adapt to an emerging technology during the system’s lifecycle is not an all-or-nothing choice. Basing a new fare payment system on open standards will ensure MTA can adapt to evolving technology in the payments arena and network environment. Components based on open standards have a shorter refresh cycle and can be replaced as the technology evolves without having to modify the entire system.”

As Jay Walder said to me in November, this new fare payment system is a prime example of spending money to save money. Per the Concept of Operations, the MTA’s fare collection costs translate to 15 cents per $1 revenue collected. This new system should cut those costs significantly while eliminating the need to spend millions on MetroCard maintenance and staving off vandalism as well. If executed properly, it’s a win-win for the MTA’s pockets and consumer flexibility.

Finally, as the Daily News article notes, Monheim believes that “the technology could also allow the MTA to charge different rates on a daily or hourly basis – like rush hour or weekends.” As the 140-page document details, the MTA expects a lot out of the looming presentations, but with the titans of the payment and fare card industries ready to listen to the nation’s largest public transit system, this project will move forward. For better or worse, the MetroCard’s demise is growing nearer and nearer.



26 Responses to “MetroCard replacement to be an ‘E-ZPass for Transit’”

  1. R. Graham says:

    I would love to see a plan formulated that somehow eliminates the need for MetroCard Vending Machines in each station. I know there is likely to always be some sort of machine that exists but if they were to accomplish that then real dollars can be saved.

    Ultimately the final proposal is likely to spell the end to station agents all together.

    • John-2 says:

      For single time/very-limited usage riders of the subways, some sort of station agent system will have to be maintained — even WMATA, with it’s system having never used direct cash/token payments, still has station agents, both to help people unfamiliar with the system and due to the fact that things from time to time due malfunction and break down (you also have the security concerns that would be bound to crop up if the MTA decided to leave 100-200 of the lowest volume stations in the system with no staffing whatsoever).

      The growing concerns about nextgen credit cards having the signals read remotely by thieves, in the same way cellphone numbers were stolen and sold illegally a decade ago, is going to be a hurdle any new system is going to have to get past. Many people may opt just to just go with the in-house MTA Card rather than use their own credit card (at least until the current security problem is resolved), or they’ll have to use a very low debt limit credit card, so that any potential liability/financial loss would quickly run up against the card’s restrictions.

      • Christopher A. says:

        I would prefer to use the MTA’s own card than my own credit card – I am not comfortable using my credit card for touchless payments if I have to take it out of my wallet, or take my wallet out of my pocket. At least, I could always refresh an MTA card with funds, limiting my liability – something safer than placing my credit card in the open….

    • Alon Levy says:

      It is never advisable to eliminate all TVMs. However, through judicious fare mechanisms (read: large unlimited monthly discounts), it’s possible to reduce their numbers.

    • Bolwerk says:

      With POP, you could stick them on trains. Though that’s not a very practical solution in NYC, where a TVM/car means more TVMs/station than we already have. Might not be a bad solution for NYC buses though.

      • Alon Levy says:

        On low-traffic regional lines, it’s normal to put the TVMs on the trains rather than at the stations. But on higher-traffic lines it’s pointless, and even placing card validators on trains may be a dicey proposition.

  2. John Paul N. says:

    Does the MetroCard brand need to die along with the magnetic strip technology? Rebranding is a non-trivial expense in itself. Is there anything bad or unpopular about the MetroCard name or branding that it must be changed?

    • BBnet3000 says:

      This was my thought when I saw a news article about this. The metrocard brand works, and people know it. Keeping the branding consistent while changing technology i think could keep people from getting confused. Its a new card that does the same thing (you just dont swipe it, so they should change the livery)

  3. Larry Littlefield says:

    The good news is that the new system could cut dwell time on the buses.

    The bad news is that since the MTA will be bankrupt, there won’t be any buses.

    But we won’t waste the money. Under the TWU contract, the new form of payment probably won’t be allowed.

    • Alon Levy says:

      Sigh. The dwell times on buses with paper tickets and POP is still much lower than on buses with smartcards and pay-the-driver-as-you-board.

      • R. Graham says:

        True. No matter what for some reason people are never ready as the bus pulls up. They wait until it has arrived and open it’s doors to begin digging for the card. That won’t change. The whole E-ZPass concept would have to be one where you don’t have to pull out the card in order for the fare to be collected from it if you wanted to decrease dwell time for buses.

        • Alon Levy says:

          That’s not even the issue. The issue is that under POP, people can board from multiple doors, and people with valid unlimited cards do not need to take any action delaying other passengers who plan on boarding.

    • Kevin says:

      While in Hong Kong, I saw people put their entire bag/purse up to the reader and slide through the turnstiles effortlessly. If only we can have a system like that. No need to fish for your card…tap your bag/wallet and go!

  4. Matt says:

    What happened to inter-agency connectivity that they wanted previously? If this were truly an E-Zpass for the area transit system then they should really bring PATH, NJ Transit, suburban bus companies and so forth into the “closed loop” too.

    • Straphanger says:

      The new system is intermodal. If you noticed, there was a test last summer on the Lex Line and a few bus lines. The same system was on PATH.

  5. SEAN says:

    One issue I have is reguarding open vs closed loop systms. As of now the MTA payment system is a closed loop & the movement is towards an open system by where the same card can be used in several cities at once. The Smartrip card can be used on MARTA & CATS in Charlotte as well.

    I did read that the CTA & WMATA are going to transission to the bank issued card as well. So lets hope the MTA finally gets on board with the rest of the large transit systems across the country with an open loop card system.

    The best part of this is the ability of transit riders to pay for fares with a single card reguardless if they are in the big apple or San Diego or fly between them, because the same card could be valid in both places if an open loop is used.

  6. ajedrez says:

    If the new SmartCard is saving them money, why do they plan on charging a one-time fee for the card itself?

    I think they should do what Miami does: They offer a durable plastic card, and a paper ticket to load the fares onto. Both forms of payment are contactless, so they still achieve the goal of speeding up the boarding process.

  7. Alon Levy says:

    Okay, I’m reading through the 140-page PDF report now, and it’s full of errors and half-truths. For example, observe that nowhere does the report discuss German-style POP, that the report brushes off the years of experience available through Hong Kong or Japan or Western Europe as “no mature standards,” and that when talking about serving unbanked customers the report simply ignores the possibilities for single-ride fares in cities that use smartcards.

  8. Ted K. says:

    The San Francisco Bay area uses the Clipper (ex-Translink) smartcard. It has replaced, and is also replacing, numerous paper passes for several systems in the area. And yes, people do hold their wallets or purses up to the scanner to get their beep (aka valid read signal). The main headache these days are glitched scanners that the vehicle operator hasn’t reset.

    The NYC area equivalent seems to be PATH’s SmartLink. So what’s wrong with extending SmartLink to be valid on NYMTA ?

    • Alon Levy says:

      What’s wrong? Both are proprietary systems owned by Cubic. Chicago is so annoyed with this it’s planning to hitch along to New York and London’s impending credit card boondoggle.

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Trackbacks/Pingbacks

  1. […] the MTA moves its long-standing plans to replace the MetroCard into gear, the city’s media outlets are starting to take notice. Will we see a debit/credit […]

  2. […] fare payment system will come. (For more on the MetroCard replacement project, check out my past coverage of what the MTA termed “an E-ZPass for Transit.”) Share Tweet Categories : Asides, […]

  3. […] chips found in credit or debit cards. After the most recent pilot, the MTA unveiled its plans for an E-ZPass for transit in mid-2011, and Joe Lhota affirmed his commitment to the project in early […]

  4. […] Walder left, the halting effort faltered. The MTA had issued a comprehensive document in May of 2011 with its plans in place, but the technology never caught on. Earlier this year, the […]

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