Mass Transit magazine features agency profiles, industry trends, management tips and new product information.
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NOVEMBER 2014 | MassTransitmag.com | Mass Transit | 23 enough or reliable enough, so we decided to go with the card-based system," he said. In 2015, the Washington Met- ropolitan Area Transportation Authority (Metro) will start a pilot program to introduce an open fare payment system for riders. "WMATA's pilot is a big ad- vance in transit fare payments and for payments in general," said Randy Vanderhoof, executive di- rector of the Smart Card Alliance. "Te open payment platform pro- vides more convenience for riders, allowing them to skip the lines at the ticket vending machine and use any contactless form of pay- ment already existing in their wallets or mobile phones. "Tis pilot shows the progress Washington, D.C.,is making to- ward a common infrastructure built on compatible contactless cards and mobile devices that government employees and area residents are already carrying. While retail and transit indus- tries are making strides in EMV, contactless and NFC mobile pay- ments, the government market is using the same contactless stan- dards for securing its buildings and information networks." Mobile Payment Growth Continues Smartphone technology and in- creasing availability in NFC-en- abled devices has ushered in ticketing options for transit agen- cies, which can keep investments in new equipment on a much lower level due to the investment mostly coming from the rider side. Currently only a small amount of riders are using mobile tick- eting options in transit agencies, but Vanderhoof said he expects that number to grow now that Ap- ple has introduced its own NFC fare payment sofware. According to a study released by Accenture on Oct. 29, the num- ber of North American consumers who used a mobile phone to pay for something is at 40 percent in 2012, up from 16 percent in 2012. About 52 percent of millennials used a phone for payment and 55 percent of high-income consumers. Michael Gray, chief technolo- gy ofcer with GlobeSherpa, said transit agencies want to ensure the collection of every revenue dollar it can with fare collection. Te use of mobile ticketing allows agencies to collect on fares with less physical infrastructure needs but more sofware needs. "Not only does the rider have these devices, but they're always changing them and upgrading to the new iOS or the new Android," Gray said. "Te system always has to work and you're always hav- ing to keep up with these changes with some sort of sofware system and to update your systems to meet these changes. Tis has been an education point with agencies interested in this technology, so there is a learning process." Gray said the advent of tech- nology also turns mobile payment providers like GlobeSherpa in con- sulting roles to educate agencies about what technology is available and how to roll it out. It's vital to im- proving the agency's performance because Gray said rider behavior can be tracked at a whole new level with mobile payment systems. "Today we're used to saying to someone 'sure, you can use my location,' and there you're able to see the behavior of the riders," he said. "For example, we can fnd out where did someone purchase a ticket? … so the next logical step is where did they activate that ticket? Where did they click to begin their journey and see that behavior. "All of a sudden, they have this data right in front of them to re- ally look at ride behavior then ask what does that data tell me from an efciency angle, how can it be con- strued from a productivity angle and to ask questions of that data." Fare Systems Open Up Vanderhoof said transit agencies are forced into selling fare media and collecting payment with tra- ditional forms of closed payment systems even though they're in the business of moving riders quickly and efciently, not being a fnan- cial system. Collecting fare pay- ment with a closed system can be expensive given it has to be man- aged and maintained in house, but open fare payment systems take that burden of of the agencies. "What's now appealing in this technology shif is it enables transit agencies to concentrate on opera- tions while the fare payments are handled by the fnancial institu- tions that are already serving those customers," Vanderhoof said. "For consumers, this also means they don't have to stop at a booth or vending machine to convert cur- rency into another currency that's only accepted in the transit system." Open payment platform allows riders to skip the lines and use any contactless form of payment already existing in their wallets or mobile phones. RANDY VANDERHOOF, executive director of the Smart Card Alliance WITH MOBILE ticketing, riders use their own devices to pay for rides instead of a transit agency having to supply fare media. GlobeSherpa