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.
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