A swipeless, credit card-based fare payment system is in our subway-riding future.
Here in New York City, we are witnesses the slow but inexorable death of the MetroCard. Despite the fact that the technology is alive and well underground, forces are plotting behind the scenes to replace. Later this year, the MTA will issue an RFP for companies who will bring a contactless, credit- and bank-card-based fare payment system into the subways, and sometime in the hazy future, the MetroCard will be a historical footnote.
In London, a city that already has its own contactless payment system, things are moving faster. According to recent reports from the other side of the Atlantic, Transport for London will have a bank card system in place by 2012, and it will be the first international city with a major public transit network to do so.
Rail.co’s A. Samuel has more:
By the end of 2012 card readers across the whole of the Transport for London (TfL) network will have been upgraded so that a touch of a contactless bank or credit card will allow passengers to touch in and out for pay as you go travel on the bus, Tube, Docklands Light Railway (DLR), Tram and London Overground network.
The new system will be up and running on all of London’s 8,000 buses in time for the 2012 Games, enabling quick and easy bus travel for the millions of visitors who will flock to the Capital to enjoy the greatest show on earth.
The Mayor of London, Boris Johnson, said: “It is tip top news that from next year a simple tap of a contactless bank card will be enough to whizz you from A to B in this great city. London leads the way in so many different fields and we will be the first in the world to allow the millions using our Tube, trams, buses and trains to benefit from the ease of using this technology.”
London is one of many cities globally working informally together to help create a network of reciprocal credit- and bank-card readers. Authorities in London, Paris, New York, Boston, Chicago, Washington, Philadelphia, Atlanta, Salt Lake City and Sydney are working with the banking industry to ensure a secure, simple and quick solution that can scale across cities and countries. The example for London concerns tourists who are fresh off a plane but don’t want to confront the challenges of purchasing a fare card in a foreign city.
Meanwhile, TfL says the new system will lead to a more efficient and money-saving approach to fare collection. The MTA has noted the same benefits and believes this is a prime example of how spending capital dollars will lead to savings on the operations side of the ledger. How the system works in London will help illuminate how ours in the U.S. will eventually work as well.
Of course, this news out of the U.K. is intriguing because of the timeframe. New York City has been testing some form of a PayPass trial on and off for nearly five years, but because London has the Oyster card infrastructure in place, it can rapidly move to a credit card-based fare solution. We have to wait because our system must undergo an entire top-to-bottom overhaul.
Still, I’m intrigued by the idea of an international standard, and as long as New York’s project is moving forward, I don’t mind the wait. It will be a few years, but slowly, the technology is moving forward.
29 comments
Clarify something for me: how is a contactless bank-card-based (or credit-card-based, either way) system going to save users money as compared to a contactless proprietary system like Oyster?
They don’t have to pay to produce as many cards. But they probably need to pay credit card merchant fees, so I don’t know if they’d come out ahead in terms of pure dollars.
Its not going through as a credit card transaction, its just using the same RFID tag thats already on the card as your ID for the fare system.
I dont have one of these cards, i assume one would still be able to get a fare card from MTA? Then again, ill probably have one by the time this fare system goes live…
If you don’t have one of these cards, there will be helpful citizens at many stations who will sell you a tap. Or a token.
I absolutely do not want to have to have a credit card, or expose it, in order to use public transit. If they don’t have a straight-up stand-alone card, which I assume they will be smart enough to do, fare evasion would be the only remaining option.
Here’s hoping they’re not idiots.
The deposit on a card in cities that require it is $5.
I’m glad London is saving $5 per long-term user in order to make sure it will never have convenient Oyster watches or Oyster electronic money.
Nothing’s standing in the way of Oyster watches if there’s a market for such a thing.
Why would anybody use a credit/debit card to purchase something that can be used as electronic money when the credit/debit card itself can already be used as electronic money, with wider acceptance?
There are going to be a lot of visitors in 2012. Teaching them all how (and why) they need to use their credit cards to buy a special card that can only be used to pay transit fares requires a lot of personnel and a lot of vending machines. Eliminating the step of buying a special card to be used to pay for rides saves a lot more than $5 per rider.
When riders took out the chip from the card to create makeshift Oyster watches, TfL fined them for it. So yes, there is something standing in the way of Oyster watches.
There already are a lot of visitors. They use MetroCard just fine.
Credit card merchant fees are unavoidable – MetroCards are purchased either with credit cards (with the same merchant fees) or cash (which probably costs even more to handle). But the MTA doesn’t have to maintain vending machines or deal with account customer service, which will probably save a lot.
It’s basic fare management outsoursing. By having the banks issue the fare media you can achieve several goals.
1. Focusing on transit opperations.
2. scaleability. Several transit agencies across the globe can use the same card allowing travelers to ride systems in several cities withoutproducing unessessary media that will be throne away once used up.
3. Consumer exceptance. If NYers travel to another city where there card is excepted they will ride more because they wont have to buy a card once they arive. Also they could refill the card before they go home & not waist time at a MTA vending machine that maybe out of order.
A good example of this process can be found between Baltimore’s MTA’s Charm, WMATA’s Smartrip & MARTA’s Breeze cards.
Except Smartrip, Charm, Breeze are all proprietary RFID systems — similar to the OysterCard. SF has been testing, and testing, and testing an RFID system for a decade at least. They are slowly rolling it out now… right in time for it to be completely obsolete, naturally. (If you think things are slow with the MTA, you’ve never met the everyone-has-a-say-400x participatory democracy of the Bay Area.)
The MTR and JR East have deliberately eschewed your approach, and generate steady profits from Octopus and Suica. JR East uses bilateral agreements to make Suica compatible with the farecards in other Japanese cities, to the point that it’s usable on most Japanese rail systems.
Another point: Suica/Octopus, like Oyster/Navigo/PayPass and unlike Smartrip and the rest of the existing American cards, uses an open standard, instead of one that leaves the transit agency captive to vendors like Cubic.
The MTA could also try to get the companies that created the RFID chips, software and hardware to form a public-private consortium for contactless fare payment.
Octopus is a very rare case – instead of a bank card becoming a transit pass, the transit pass became a very important debit card.
The last time I went there, most major retailers (including McDonalds, KFC, etc.) had Octopus readers. I don’t think any other smart card has managed to reach that level of use yet…
Suica does the same. EZPass/Cashcard (which used to be two separate standards, but have since unified) were less advanced when I lived in Singapore – you could only use Cashcard for vending machines, parking, and taxis – but it’s probably expanded since.
But the point is that in both Tokyo and Hong Kong, the transit agency made sure to license the transit pass as electronic money. London did no such thing with Oyster.
There are stores and vending machines that accept payment via Suica and other RFID based cards in Japan, but they are much less common outside of Tokyo, and even in Tokyo come nowhere close to the level of ubiquity of Oyster in Hong Kong.
Incidentally, Taiwan is also moving towards unification of their various regional RFID payment cards, while also expanding the system (primarily Taipei’s EZcard) to retail purchases, as it has been in HK and parts of Japan.
4. Massive rent-seeking and profiteering by the banks.
5. Private banks tracking your every move.
6. Exclusion of the “unbanked” or those with bad credit from the transit system.
Having credit-card-based access as an OPTION is acceptable. Having it MANDATORY is unacceptable.
I never quite understood why MetroCards had to be disposable in such a short time frame.
The magnetic media strip is exposed and vulnerable to accidental damage and wear and tear.
BTW, Am I the only one that found amusing Lord Mayor Boris’s usage of “tip” “top” and “tap” in the same sentence? He maybe frumpy, but at least he knows how to be alliterative.
RFID is fine as long as they allow people to buy a dedicated transit card. I do not want RFID on my credit card or bank card. Merchants do not ask for ID or a PIN for RFID (Blink etc.) transactions. (That’s the whole idea. They are lowering transaction costs to get you to use the card more.) When an RFID bank/debit card is stolen, purchases come straight out of your account. It is a massive pain to get your bank to restore those funds. (Likewise don’t carry an ATM/debit/bank card that is Visa/Mastercard capable. Use a credit card and make credit, not debit transactions. Then the credit card company is fronting the money stolen, not you.) Your bank or credit card company will send you an RFID free card if you request it.
Pardon this exegesis on RFID payment, but it can become an interest after one is victimized.
The main security control on most RFID cards is they can only be used for purchases under $50. In my case, the thieves hit 14 stores and spent $532 in the two hours it took for me to cancel the card.
Just to make clear why business is interested in promoting RFID:
“A person who uses PayPass spends about 25 per cent more on their card on a monthly basis,” MasterCard’s Lapstra said. “We launched this product to … have our cards be used more.”
And here’s what a top RFID security guy says
“What people don’t understand is the credit-card industry isn’t trying to make cards secure,” Holman said. “They just have a risk-management problem where they try to control the amount of fraud on their system.”
http://www.cbc.ca/news/story/2.....cerns.html
Thank you for covering this topic. The fundamental problem is bank/debit cards, which nobody should have as they are a recipe for losing your money to thieves.
Credit cards, it’s the card company’s money which is lost to thieves. Still, it’s almost as obnoxious to deal with.
Anyone with any sense of security will want their transit pass to be completely separate from any credit cards.
Sorry if this is a stupid question, but how would a 30-day unlimited work in this scenario?
You can load an unlimited pass onto a smartcard. It’s routine in Tokyo and London.
and SF Bay Area. On Clipper you can do it online, and i think you can load monthlies for Muni via the machines in stations now.
Or even closer to home, PATH’s very own SmartLink card can do both # of trips or unlimited passes
[…] plans to phase out the MetroCard system. While London, as I wrote late last week, will have its bank card-based system in place by 2012, the MTA’s own process will likely be slower. The authority will soon issue an RFP and will […]
This is an oxymoron, isn’t it? Have these people LOOKED at our crooked, insecure, overcomplicated, abysmal-slow-to-deal-with-any-problems banking industry?