Transit Payment Systems: A Case for Open Standards
By First Data Government and Education Task Force 3/12/2010
Executive Summary
In the metropolitan area surrounding Salt Lake City, Utah, bus riders use their Visa, MasterCard or American Express branded contactless bankcards to "tap on" when they board and "tap off" when they leave their buses. Using the open specifications of the payment cards, the transit authority has a lot of flexibility to incorporate new products in the future.
These scenarios are the future of transit payment systems. If your transit authority isn't there yet, it's time to consider how you are going to get there.
The fact of the matter is most U.S. transit agencies have proprietary fare payment systems today. These systems were implemented years or decades ago when there was no practical alternative, and even today they are still the most proven and widely available transit payment systems. In the past, only a proprietary payment system could meet the requirement to move riders quickly through the faregates while ensuring that the transit authority collected its appropriate fare from each rider. It's true that proprietary transit payment systems still work today, but they are expensive to maintain and constrain their customers, making it hard for transit authorities to reduce costs, develop innovative services and generate new revenue streams.
In recent years, the technology and processes for open standard payment systems have reached the point where they can meet the needs of transit systems. This paper looks at the current trends in payment systems and the benefits they hold for transit authorities. Pilot programs are proving that the opportunity is there for cost savings, new revenue streams, improved customer convenience, easier integration with other transit modes, and innovative partnerships. What's more, such systems allow transit authorities to focus on their core competency—transportation—and get out of the costly business of processing payments.
