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Electronic Fare Collection: Lessons From New York

The TTC will present an information session on Open Payment systems:

Thursday, April 15, 2010
6:30 to 9:30 pm
Committee Room 1, Toronto City Hall

Here is the meeting description:

Open payment is an exciting breakthrough in fare collection. Instead of using a traditional farecard, it allows transit riders to use their credit or debit cards – even cell phones – at the turnstile or farebox. A prepaid card will also be available for children and others who choose not to use their personal cards.

By using the same technology as every bank, business and retailer, transit operators can be assured that their fare systems will have the highest level of security and will never be obsolete. Visitors from across Canada and around the world will be able to tap and go without having to figure out how to buy a fare.

The TTC is a full participant in the Presto farecard project and continues to work with the provincial agency to identify funding to bring farecards to Toronto. By proceeding with open payment in parallel with Presto’s traditional farecard the TTC is leading a revolution on how riders experience public transit.

Come to an information session on open payments led by Paul Korczak, former Chair of the Transportation Council of the Smart Card Alliance, a current member of the Near Field Communications Academy, and is actively involved in peer reviews and public forums on transit fare payments around the world.

With all the discussion of Smart Cards, this will bring a much-needed update on the evolution of payment technology to Toronto.

17 thoughts on “Electronic Fare Collection: Lessons From New York”

  1. The thing that’s really driving me crazy is that they seem intent on buying the new fare boxes for Metropass scanning so close to implementing smart cars, but with no provision for converting them. If there is really such a market in counterfeit passes might it not make more sense to speed up some kind of electronic pass that would be at least mechanically compatible with Presto, even if the actual back end had to be installed later?

    Steve: What baffles me is that the TTC is always boasting about its low fare evasion rate, but acts as if it were much higher.

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  2. If it takes as long to process as my bank card does, 10 people paying at a stop will take between 5 and 10 minutes.

    This may have to be combined with Peter Witt style fare collection.

    Steve: The charge does not go to your bank card directly. All it is used for is identification. At the end of a billing interval (say one month), the fare system figures out how much you owe and bills your account. Similarly, if you are using your phone as an identifier, it’s not billing the phone, only using it to tell who you are.

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  3. I would hope any system would be set up with a daily/weekly/monthly cap equivalent to the value of the corresponding pass so as to take the guesswork out of frequent transit use.

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  4. “The TTC is a full participant in the Presto farecard project and continues to work with the provincial agency to identify funding to bring farecards to Toronto. By proceeding with open payment in parallel with Presto’s traditional farecard the TTC is leading a revolution on how riders experience public transit.”

    Yes, but is the TTC a WILLING participant? It would seem to me to be a much better idea to use an existing system than to invent a “superior, made in Ontario technology.” All the we need is the ICTS of fare cards. I fear that Presto is going to be as successful as those other provincially mandated technologies: Mag-Lev, ICTS, Natural gas buses, and hybrids before the battery technology is mature.

    Steve: To be fair, it was actually Ottawa (the Martin government) that forced them into hybrids by offering funding that could only be spent on “green” technology. Green is good, but it has to work.

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  5. If your bank card or cellphone or whatever is used only to identify you when scanned, what’s to stop wide-spread fraudulent use of stolen or duplicated cards? Remember the fiasco with the parking meters not fully validating credit cards but producing a ticket anyway? Also, what happens when a customer disputes the rejection of their identifier by the system, whether or not they have a valid account in the transit fare database?

    Steve: All excellent questions for the presentation on Thursday.

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  6. Kristian says: If your bank card or cellphone or whatever is used only to identify you when scanned, what’s to stop wide-spread fraudulent use of stolen or duplicated cards?

    Based on similar schemes elsewhere…

    Duplicates: although each card scanenr is not linked “live” to a central computer, its transactions will be downloaded on a regular basis (probably every night) into a central computer. The transaction data would include card ID, balance before/after the time of transaction and amount deducted. Therefore, the central computer can check to make sure you have the correct balance on your card, and haven’t added money in some illicit way. A duplicate card would show up as having more money on it then it should and so would be black-listed (see below).

    Theft: cards you report as stolen (or lost) are simply black-listed.

    Black-listing (simple version): Each card reader get a daily update of all black-listed cards, and refuses to accept any cards from the list.

    Black-listing (practical version): Lots of cards will get reported lost/stolen, and it would be impractical for every card reader to know about every card. The trick is to have a “grey-list” on a central computer, which lists all cards repoerted lost/stolen. If any use of those is cards is detected, then it gets promoted to the black-list. (One can also have seperate black-lists for each area or region, so if a stolen card is used in Hamilton, it only gets on the black-list for (say) HSR and GO’s Lakeshore West services.)

    Oh, and this made me laugh: “The TTC is a full participant in the Presto farecard project”

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  7. Jonathon says: I would hope any system would be set up with a daily/weekly/monthly cap equivalent to the value of the corresponding pass so as to take the guesswork out of frequent transit use.

    Oakville Transit are doing just that, by ensuring you never pay for more than 36 rides in a month, which works out the same as a monthly pass.

    Steve: Some systems will work out the most advantageous rate depending on your usage with things like daily, weekly and monthly caps corresponding to pricing thresholds for ride-at-will fares. You might also wind up paying for a GO monthly pass plus some combination of TTC weekly passes or “tokens” if that was your usage pattern. It’s important that this type of capability is built into the new system because “the computer can’t do that” is (or should be) a fast route to the exit.

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  9. Kristian wrote, “Remember the fiasco with the parking meters not fully validating credit cards but producing a ticket anyway?”

    That is not the same as simply using a card to identify who one is. The parking meters use the card as a payment method, but in order to speed up the process the transaction was not sent to your card issuer for approval.

    Given that the amount was only a few dollars, the city’s system simply approved the transaction if the card “looked” valid. This means that the card number had a valid check digit and an expiry date that was in the future (there are some other simple checks that could be done, but for brevity I won’t go into them). The last digit of all bank cards is a calculation involving the rest of the digits, so simply creating a fake card without this knowledge only gives you a one in ten chance of actually creating a valid card number.

    The problem is that one could use a fake card with a valid check digit, or even a card from a cancelled account. When the city later forwards the transaction to the issuing bank, it gets rejected and the city was SOL as far as payment is concerned.

    Stand in processing could check a blacklist of cards reported stolen, but that can slow down the approval process and would not likely include cancelled cards from closed accounts. There would also be a time lag which would not see a cancelled card appearing on the blacklist for the stand in processing as quickly as one might expect.

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  10. “By proceeding with open payment in parallel with Presto’s traditional farecard the TTC is leading a revolution on how riders experience public transit.”

    Wait… so this is going to be a separate system from Presto? Why on earth would they building their own system in parallel with Metrolinx’s? If we’re spending the money to upgrade to a modern fare collection system, it had better be consistent from Whitby to Burlington.

    I don’t want the TTC leading a revolution, I just want the whole region using the kind of technology that major systems in the rest of the world use.

    Steve: The TTC is trying to encourage Metrolinx to use a modern, open standards technology rather than the proprietary system that, by the time they finish the rollout, could be obsolete. Is Presto another example of Queen’s Park getting into bed with a technology vendor to the detriment of transit?

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  11. Re: daily/weekly/monthly cap equivalent to the value of the corresponding pass.

    I would hope this issue is raised at the meeting. Also, it would be interesting to hear how this new system would issue reciepts for monthly/weekly passes given the Federal Tax Credit for Public Transit.

    Steve: The feds managed to create a difficult way of determining which fares are eligible for credit and which are not. They will have to fix it. As long as it’s billed on a bulk basis, however, this should not be a huge challenge.

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  12. The big difference between Presto and the current TTC fare collection is power requirement and possible central computer contact. The current system requires neither, and therefore a new infostructure is required to be constructed. POP (Proof of Payment) where ticket must be stamped will not likely be a problem because the ticket machines already have power supplied.

    If a connection to a central computer is required, there will be a problem wherever the fare is collected on the vehicle, GO or TTC. Connection reliability could be a REAL problem at times.

    Once the infrastructure is in place, it is likely that a change in fare management, such as acceptance of additional cards, can be implemented easily.

    Steve: A major advantage of open payment systems is that a lot of the back-end payment processing uses the existing infrastructure for credit/debit cards rather than requiring the transit system to build and maintain it. As for infrastructure, new systems use wireless links to minimize hookup complexity and give better flexibility in locating machines.

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  13. Gordon has a point about power hook-up. There is an epidemic of stop announcement displays (and to some extent the voice part as well) rebooting or not working at all and this is clearly due to problems with the power feed. (For some reason the newer the vehicle, the less likely the system is to work reliably.) The last bus I took to work had neither part of the system working and the operator was not calling out the stops despite being required to by policy. Imagine how disastrous this would be with fareboxes. Any failure of the farebox, whether due to power glitches or not, would likely result in the vehicle being removed from service.

    Steve: There is a more general concern about the number of subsystems that have been added to vehicles such as cameras, stop announcements and, now, fare devices. This is already producing growth in TTC maintenance staff needs.

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  14. Could this money collection system be used by motorists in paying a congestion tax?

    Could parking meters be adapted to accept credit cards and issue transit day passes, as well as driving day passes?

    Steve: The idea is that in an Open Payment system, you would use something you already had (a credit or debit card, or your cell phone) to identify yourself to the transit system. Anything else you might pay for would be handled by that vendor through their own system. You could also have a card issued by the transit system that was linked to an account maintained by or for you (e.g. a card held by a child but paid for by a parent, or a card held by an adult who did not want to use their credit card).

    The distinction between this and a “Closed” system such as Presto is today is that a vendor would not have to have a “Presto reader” to transact business with your card, and the transit agency would not bear the overhead of maintaining infrastructure and billing systems for third parties.

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  15. Thank you Steve for posting the meeting info – I attended and found it interesting. New York and some other cities are building second generation systems which incorporate open payment, as we in Toronto struggle with our first system. A well designed system should allow the operator(s) considerable flexibility for such as promotion fares, capping, daytime/evening discounts, transfers without the paper, zones and more. On my occasional visits to London I immediately buy an Oyster card – so simple and a joy to use.

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  17. Prepaid Cards are also not the way to go. The fees are unbearable for consumers and merchants alike. The biggest impact is on the unbanked and underbanked that they are targeted to address the needs of.

    Steve: Note that this link is provided by a vendor with an interest in this market. This is the second time this link has been posted, and the last time it will be accepted.

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