December 2011

Transit agencies turn to new, innovative contactless payment systems

by Brittni Rubin, Assistant Editor

New Jersey Transit (NJ Transit) partnered with Google to become the first public transportation system in the nation to use smart phone payment app Google Wallet.

Launched at NJ Transit stations in October, Google Wallet is a tap-and-go smart phone app that essentially converts one's mobile phone into a "personal wallet." Rather than digging around for change in purses or pockets, consumers merely tap their phone, which stores credit card information, against a supported payment reader to purchase transit tickets.

During the tap, Google Wallet transmits credit card information using a technology called near field communication (NFC). The entire transaction processes directly on the phone; no physical ticket is needed.
As of now, travelers can use Google Wallet to purchase tickets at New York Penn Station, the Newark Liberty International Airport Station and on select NJ Transit bus routes

"This new and innovative partnership will give our customers more options, more choices and an ability to move more rapidly throughout their daily commute," said John Durso Jr., spokesperson for NJ Transit.

Over the past few years, NJ Transit kept current with industry trends and already had some contactless payment systems in place. This made the transition to Google Wallet easier, said Durso. "We have been committed to advancing our programs, so it was a natural progression in our efforts to leverage this cutting-edge technology," he explained.

To make it a seamless transition for customers as well, Google representatives came to the site on the day of the launch to help familiarize travelers with the new technology.

Since it is fairly new, Google Wallet is only downloadable through Nexus S 4G on Sprint phones. The app is free and there are no transaction fees; however, users do need a Google account. To ensure security, users must lock and unlock their Google Wallet for use.

As of now, payments can only be made through Citi MasterCard credit cards, but travelers can use non-supported credit cards to fund a virtual pre-paid card through Google. For a limited time, new pre-paid card holders receive a $10 incentive.

Following in NJ Transit's footsteps, Utah Transit Authority (UTA) also plans to integrate Google Wallet into its payment system. UTA has been moving toward contactless payment since 2006, with a goal to make its entire fare system electronic. The agency will use both Google Wallet and Isis, — a rival NFC-based mobile wallet platform — according to Gerry Carpenter, media relations specialist for UTA. Isis will be available through UTA by spring, with Google Wallet available by the end of 2012.

Carpenter said that transferring to smart phone payment will help combat some of the biggest challenges the transit agency faces today.

"Transit agencies need to understand how riders are using the system. Right now, it's hard to tell where riders are going — you can count them, but it's hard to track a full linked trip," said Carpenter. "With NFC tapping, each customer has a unique identifier, — either an ID or credit card - which enables us to tell that an individual customer went from point A to point B and arrived at point C, all without violating their privacy."

The long-term benefit is to use the tracking to make improvements to the public transportation system, which better suit the travel patterns of customers. UTA is hoping to create more direct trips to popular locations, explained Carpenter

"There are a lot of advantages of using mobile payment," he said. "It will speed up the boarding process, and also, we'll be able to know the distance of one's trip, so we can start charging people more fairly, based on how far they've traveled."

Both NJ Transit and UTA are tenaciously moving in the same direction as the industry, embracing new technologies to enhance transit in their expansive communities.

"We have pledged to create new and innovative programs that will benefit our customers and help them move throughout their daily routes at a more expeditious manner," said Durso. 

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