Transit
Open payment, open standards are in WMATA's future
In the last post in this series, we examined the history of the Metrorail fare collection system. Today, we'll explore open standard and open payment
Photo by DDOTDC on Flickr.
Open standards make it possible for a transit authority to use fare collection equipment from multiple vendors without worrying about compatibility, while open payment enables riders to use payment cards and devices they already have, such as contactless credit cards and even smartphones, to pay their fares.
When modern automatic fare collection systems were first introduced in the 1960s and 1970s, there were few industry standards, if any. However, as there were also very few vendors who were able to deliver such systems, standardization was not much of a concern. Integrating with neighboring transit agencies wasn't an issue, either, since so few transit authorities had adopted any sort of automatic fare collection.
But the market has grown substantially in the past few decades. These days, transit agencies don't want to be locked into a single vendor. Instead, they want to be able to buy some of their faregates from one manufacturer, and some from another. And, they want them to see those faregates work with ticket vending machines from yet another supplier.
Open standards, like ISO 24014 and the ITSO specification, enable this kind of interoperability. By using open standards, transit authorities can procure fare collection equipment from multiple vendors and rely on it to work together seamlessly.
The use of open standards also enables better cooperation between neighboring transit authorities, even if they use fare collection equipment from different manufacturers. Existing regional smart cards for transit, like SmarTrip, TAP, and the ORCA card, have required all of the participating transit agencies to use the same equipment, from the same manufacturer.
By contrast, with open standards, riders can use the same ticket or smart card to pay their fare on multiple transit authorities as long as their fare collection systems adhere to relevant standards, regardless of manufacturer. In addition to the convenience of having a single card for fare payment, this enables benefits for riders like discounted transfers between transit systems.
Open payment represents another major shift in thinking for transit authorities. Historically, transit authorities have been the sole suppliers of what is known in the industry as 'fare media' Open payment changes that. Open payment systems make use of smart cards and similar devices that riders already have, rather than requiring them to use a card dedicated to a specific transit authority (like New York's MetroCard or the SmarTrip card). In an open payment system, riders can use existing contactless credit and debit cards (like MasterCard PayPass, Visa payWave, American Express ExpressPay, and Discover Zip) to pay their fare directly, by tapping the card on a faregate or bus farebox.
Other contactless smart cards, such as university, government, and corporate IDs, and even some smartphones, can also be used by open payment systems, as well, allowing transit users to pay their fare using cards and devices they already carry. In addition to providing a new level of convenience to riders, open payment systems enable transit agencies to spend less distributing fare media, because more riders will opt to use personal cards and devices, rather than relying on fare media provided by the transportation authority.
However, not all riders may have a contactless credit or debit card, or other smart card, that they can use to pay their fare. For most transit agencies which are looking to adopt open payment (including WMATA), the solution is to continue to distribute some type of prepaid card (similar to the existing SmarTrip card). While many riders will choose to use a contactless credit or debit card, the prepaid card will remain an option for users who prefer a more traditional way to pay for their trips.
Together, open standards and open payment reduce the cost of a fare collection system and increase flexibility for transit authorities and riders. With these two innovations in place, transit authorities no longer have to worry about the vendors of proprietary equipment going out of business or making a system uneconomical to maintain. Instead, they can take advantage of a growing marketplace of innovative, interoperable solutions. These solutions give riders new, more convenient ways to pay their fare, and they allow transit agencies to create new programs like frequent rider rewards and cross-promotions with local merchants.
Kurt Raschke is an information technology professional and transit enthusiast interested in how technology can improve the usability of transit systems. A car-free resident of Silver Spring, he is a frequent user of Metrorail and Metrobus. He also blogs at Raschke on Transport. All views expressed here are his alone. 
Comments
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by Steve85 on Jul 27, 2011 3:29 pm • link • report
Metro needs to put more thought into this. Using credit cards may be a good idea for some, but for as often as I use Metro, having my account statement filled with daily small-dollar transactions would be a nightmare. If they're going to use credit cards, it would be best to have the option of using them as just a stored-value card. In addition, would you have to authorize Metro to charge your card? I can see there being a big problem with people's cards being unknowingly charged as they pass through the gates.
by Adam L on Jul 27, 2011 3:35 pm • link • report
by Steven Yates on Jul 27, 2011 3:36 pm • link • report
by Adam L on Jul 27, 2011 3:45 pm • link • report
WMATA has been studying the use of PIV and CAC cards to deliver SmartBenefits to Federal employees. The intention is that once the New Electronic Payments Program is up and running, Federal SmartBenefits users would use their existing PIV (or CAC, for DoD employees) card rather than a SmarTrip card.
SmartBenefits users who are not Federal employees would continue to use a separate card.
by Kurt Raschke on Jul 27, 2011 3:56 pm • link • report
by MLD on Jul 27, 2011 4:02 pm • link • report
I care far more about being able to use my SmarTrip card for a train ride on Metro and MARC, or being able to use it up in New York on the subway, or something like that. If SmarTrip (or whatever the brand for an RFID card like that is) could be to transit fares as EZPass is to tolling, that would be cool with me.
by Alex B. on Jul 27, 2011 4:07 pm • link • report
The issues which you have raised are all issues which are under heavy study by WMATA and other agencies which have adopted or will adopt open payment, including the UTA, MTA New York City Transit, the CTA, SEPTA, and TfL; they have also been working with the banking industry to develop aggregation rules and fee schedules which are amenable to the development of open payment systems.
A pay-in-advance model (where riders create an account for their debit or credit card and load prepaid value on it) is certainly one of the possibilities under consideration; pass products will of course use a pay-in-advance model.
Pay-as-you-go transactions may end up being aggregated, perhaps over a period of 24 hours, and this will depend on the involvement of the banking industry in developing rules for aggregation.
by Kurt Raschke on Jul 27, 2011 4:12 pm • link • report
MARC and VRE are included in WMATA's New Electronic Payments Program, but it would be up to them to actually deploy the equipment when the time comes.
As far as other cities are concerned, the theory is that once more cities adopt open payment, your contactless credit or debit card will serve as the single means of payment for all of them.
by Kurt Raschke on Jul 27, 2011 4:18 pm • link • report
What if I don't want to use my credit card? What if I just want my RFID smart card and I want to load it with cash?
I guess my point is this - the benefit of having a universal RFID card seems to vastly outweigh the benefit of having turnstiles that accept Visa - but that's just me.
The RFID card opens the door to passes, it opens the door to credit-less payment (crucial for lower income riders), it opens the door to lower transaction costs and interchange fees.
In fact, I'd rather go the other way. How about following the Hong Kong model and letting me use my SmarTrip card to pay for other stuff, such as parking meters or convenience store purchases?
http://en.wikipedia.org/wiki/Octopus_card
I get the idea of merging the two concepts (credit card and fare payment media) together, I just think the merger should be on the terms of the fare payment system...
by Alex B. on Jul 27, 2011 4:24 pm • link • report
I agree with your concerns entirely, but for the most part the US transit market has jumped on the open transit bandwagon. My personal opinion is that much of what can be done with open payment can be done with a conventional closed-loop contactless smart card (like the Octopus card), and can therefore be done in a way that is less complex than involving the banking industry. As far as fees are concerned, the transit industry's response has been that (perhaps because of the volume of transactions involved) that they will be able to ensure that the banking industry offers them favorable terms. Whether or not that will be proven in practice remains to be seen.
The emphasis on minimizing the use of cash and promoting credit and debit cards as the fare media of the future also runs the risk of seriously disenfranchising unbanked riders, as you've pointed out.
There isn't really a good answer here; a number of transit agencies in the US have already put a substantial amount of money into open payment (MTA NYCT's trials go back to 2006), and it seems unlikely they will reverse course now. At the same time, if the banking industry is cooperative, open payment could turn out to be a real boon for some riders, but the risks must be carefully managed to ensure it does not disadvantage other riders.
by Kurt Raschke on Jul 27, 2011 4:36 pm • link • report
If I'm using my PIV card essentially as a bus pass, I'm going to wear it, not take it out of my bag and put it back in. Losing it is a huge pain. Losing a SmartTrip card, not such a big deal so I'll store it in a jacket pocket or the outside pocket my bag. I'm not sure I like things moving in that direction.
by Kate W on Jul 27, 2011 5:14 pm • link • report
Well if you only need to be in very close proximity (a foot or two) you wouldn't need to take it out of your bag or pocket like you would need to with SmarTrip.
by cmc on Jul 27, 2011 6:10 pm • link • report
A foot or two? How do I make sure they don't charge the wrong card?
by MikeH on Jul 27, 2011 6:42 pm • link • report
We're talking about a read range on the order of an inch or two at most, not feet.
by Kurt Raschke on Jul 27, 2011 6:46 pm • link • report
The problem with reading from an inch or two, at least from a UK perspective is that many people over here do not take their Oyster card (transit payment card) out of their wallet to touch it on the reader. If you have more than one contactless payment card in your wallet, you're going to have to remove it, which many people will not want to do in a busy public space.
by Dave on Jul 28, 2011 5:12 am • link • report
I've used Oyster (with the card in my wallet, no less), and I'd be hard-pressed to say that the read range for Oyster is more than a few inches; in my experience, in order to get my card to read reliably, I had to have the back of my wallet touching the target or an inch away at most. The same goes for SmartLink on the PATH, SmarTrip, and even the contactless payment reader at the bagel shop up the street.
In any event, the point I was trying to make is that we are talking about a matter of inches, not feet: yes, cards will read through wallets, etc., and no, merely walking past a faregate with a contactless card in your back pocket will not be enough for it to be read and you to be charged for a ride.
Discussion of contactless payment seems to lead some people to fear that their card will be read and charged by errant readers as they go about their business, and the reality is that that's very unlikely with an unmodified reader. If you have a contactless credit or debit card now, try using it at a merchant that accepts contactless payment. You'll see that waving the card a foot in front of the reader does no good. You really do have to 'tap' the card on the reader, or at least hold it quite close—but at the same time, it will read through a wallet.
by Kurt Raschke on Jul 28, 2011 9:46 am • link • report
Also, the readers should be smart enough to be able to figure out that multiple cards are being tapped simultaneously, and only charge one.
by andrew on Jul 28, 2011 9:47 am • link • report
Kurt, the problem Dave is talking about is, if I have my transit card (SmarTrip or Oyster or whatever) in my wallet AND I have a contactless credit card in my wallet, and I touch my wallet to the reader, won't the faregate read and charge both, or get confused?
by MLD on Jul 28, 2011 9:54 am • link • report
Yes, but that's a separate problem, and it's really a more generic problem with contactless payment, if you have multiple contactless credit or debit cards in your wallet (which most people will eventually). The industry's response thus far has been that in that case you should remove the card you intend to use and tap it by itself.
This isn't really a flaw with open payment, or even contactless payment, but rather RFID in general.
As to the scenario you've proposed, WMATA's response would likely be that with an open payment system up-and-running, if you have a contactless credit or debit card, then you no longer have any need for a SmarTrip card, and had ought just remove it from your wallet. Of course, the reality is that there are plenty of scenarios where this is not the case—including where you have multiple contactless credit or debit cards in your wallet—but that's for the industry to work out.
WMATA intends to conduct rider focus groups on fare collection, as they did for station naming; if these issues are of concern to you, look for further information from WMATA, and make your voice heard when the time comes.
by Kurt Raschke on Jul 28, 2011 10:11 am • link • report
Yeah, they should be able to charge only one, but will it be the one I want to be charged?
Again, I just don't see the benefit. It would be one thing to have different targets (tap here for RFID, tap there for Credit) or something, but there seems to be little benefit to me for going to a contactless credit card. It won't be faster than SmarTrip. For universality, why not just make the RFID cards universal and have them linked to a bank account?
by Alex B. on Jul 28, 2011 10:16 am • link • report
My wife works for one of the law firms in the District and receives her pre-tax transit money via a credit on a special debit card the firm issued to employees who receive the transit subsidy. I think they went with that system, instead of SmartBenefits, because they have offices in other cities, including Philadelphia and New York, and it makes it easier for them to administer a single system for all offices. But I do not know all the details. I believe it's a MasterCard-branded card. What I do not know is how (or indeed whether) it prohibits the user from just taking the money and using it for something else, like say if you went out to lunch and wanted to use that MasterCard-branded debit card. My wife doesn't know either but doesn't care enough to ask their benefits person.
So I assume if they went to an open system, people receiving transit benefits COULD potentially use something other than the SmarTrip card, although some people would clearly benefit from sticking with the SmarTrip (people age 65 or older, for example, who are eligible for the Senior SmarTrip card that gets them a 50% discount).
by Rich on Jul 28, 2011 11:00 am • link • report
by Payton on Jul 28, 2011 9:27 pm • link • report
You're doing a fantastic job of answering all these points. But regarding 'card conflict' (i.e. having more than one in your wallet and potentially being charged twice), it seems that the best we can do is look out for a focus group to attend, or'that's for the industry to work out'.
This seems a little like brushing it under the carpet and not particularly customer focussed - it's about reducing costs, increasing profits and providing no benefit to customers. In fact it may well be more hassle as we could have to register the cards to stop more than one card being charged by vendors.
The present system does probably need to change, but it seems that much more thought needs to go into issues such as customer protection, providing for those without bank accounts or on benefits, and problem resolution when things go wrong.
by Dave on Jul 29, 2011 3:51 am • link • report
Rest assured that my intent was not to sweep anything under the rug (although I can't speak for WMATA's intentions, of course); many of the issues that you and other commenters have raised are things which I've written about in articles about the WMATA New Electronic Payments Program, MTA New Fare Payment System and open payment in general on my personal site, but the coverage there is somewhat more technical.
The intent of this post was to provide a fairly accessible overview of technologies which influence the design of future fare collection systems. Having laid the groundwork, future articles in this series on GGW will delve into the New Electronic Payments Program more deeply—and certainly they will tease out some of these unresolved issues.
As you've correctly diagnosed, there are many risks in open payment systems, and some of these risks derive directly from deficiencies in the underlying technology (like the inability to distinguish between multiple contactless cards in a person's wallet). The payment card industry has (not surprisingly) put a lot of money into pushing open payment forward, and at this point I suspect they are unlikely to turn back. It is possible that if riders pitch enough of a fit, changes may be made while these systems are being piloted, but they may forge ahead anyway.
There are indeed usability problems with open payment, and some of them are quite egregious: the MTA's proposed implementation for New York City, for example, does not intend to provide the balance of a prepaid card at the turnstile or bus farebox—riders must instead call an IVR system or go online to find out their balance. This is a serious loss in usability compared to the existing MetroCard.
I should point out, in closing, that there are other feedback channels available to riders, although they are somewhat less direct: submitting written testimony or speaking at meetings of either the WMATA Board or Riders' Advisory Council. I know this will seem unsatisfying to you, and the best I can do is share with you the frustration I've experienced over the past year as I have watched transit agencies develop plans for open payment in which usability is considered only as a distant second after cost-cutting. It is a general trend which has affected many transit agencies, not just WMATA, and I do not know where it will lead.
by Kurt Raschke on Jul 30, 2011 3:09 pm • link • report
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