February 2013

Passengers Seek More Ways to Pay Fares

by Brittany-Marie Swanson, Associate Editor

When the Southeastern Pennsylvania Transportation Authority (SEPTA) began gathering information from the public about fare collection, they discovered people wanted to pay for transit the same way they paid for everything else — with their own credit and debit cards or mobile devices.

The agency has been working since November 2011 to bring an open payment system to its customers, which will allow them to “choose how they want to pay their fare,” according to John McGee, chief officer, new payment technologies, for SEPTA.

By spring 2014, passengers will be able to use their own contactless cards, a traditional SEPTA card, or a smartphone with Near Field Communications (NFC) capabilities to board buses or trains.

The Chicago Transit Authority (CTA) and Dallas Area Rapid Transit (DART) are also moving to implement open payment systems by 2013 and 2015, respectively. Officials say an open payment system is beneficial to passengers and transit agencies alike.

“[Open payment] is easier for [passengers] to use and more straightforward,” says David Leiniger, executive VP/chief financial officer, DART. “The customer side of this is very important to us, so we just think it’s the better way to pay.”

More payment options
“Open payment provides passengers with the convenience of carrying a card or device that can serve multiple purposes, including fare payment,” according to Kim Green, president, SPX Genfare. “So, the major benefit for the passenger is convenience.”

Open payment offers flexibility other systems don’t, according to Eric Reese, director, revenue, for CTA, because it “more generally resembles a customer’s retail experience on a day-to-day basis.”

Through its Ventra system, CTA will offer customers the opportunity to purchase a Ventra Card, which can be used as a prepaid debit card to make retail purchases as well as pay for transit service. Passengers will also have the option of using their own contactless bank-issued credit and debit cards or a mobile phone, which they will tap at “L” stations to board a bus.

The Ventra Card will eventually be available for purchase at more than 2,500 locations within a one-third mile of all bus stops, Reese says.

Similarly, SEPTA passengers will be able to use a traditional SEPTA card, but also a contactless credit or debit card — “in which case they don’t have to buy anything; they can actually board the bus or go through the turnstile using that card,” McGee says.

“Looking ahead, we believe that the marketplace is moving away from the traditional cards to open payment NFC-enabled devices, such as contactless credit cards and mobile payment,” he adds.

DART’s Leiniger points out that giving passengers the option to pay via smartphone is a savvy move.

“From 2010 to 2012, the uptick of utilization of smartphones went from under 30% to over 60%,” he says. “Interestingly enough, the lower income and transit-dependent demographic actually had a higher use of smartphones than the general population…so mobile payment for us became a very attractive strategy.”


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