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| Subject: standardsmost relevance to the transit industry is ISO 14443 | |
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Author: Automated Ticketing Systems |
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Date Posted: 09:07:48 02/01/03 Sat Knowledge Management Proposal Automated Ticketing Systems: The State of the Art Background 1. In several cities in the world, including Rio de Janeiro and Buenos Aires, there has been a major drive towards concessioning urban transport services to the private sector. This is intended to improve the level-of-service provided to users and, at the same time, reduce or eliminate operating subsidies. 2. One objective of most urban transport systems is the physical and tariff integration of its several modes and the introduction of multimodal fares which will allow the user to move from one mode to another without having to buy a new ticket for each mode he travels on. When the urban transport operating agencies are all under the same government agency, as was the case in the past, the introduction of multimodal passes were much easier because, in most cases, the government would decide arbitrarily the revenue sharing and would pay the subsidies. Very few agencies were motivated to show a net income because the government would cover their deficits. In the new private sector dominated context, the introduction of multimodal fares requires a system which will track, in a reliable manner, how much each user traveled by each mode so that revenue sharing reflects more accurately the services provided. 3. Automated ticketing through contact and/or contactless smart cards facilitate the tracking of kilometers traveled and eliminates the problem of revenue sharing. It also makes ticket fraud more difficult (a common occurrence in many systems) and help in reducing fare evasion. 4. The objective of the proposed Knowledge Management (KM) exercise is to learn about the state-of-the-art in automated ticketing systems, in particular, the new generation of smart cards and how they can be applied in the LAC countries. How can multimodal passes such as the "vale-transporte" Vale-Transporte is a federally mandated monthly pass in Brazil which employers must provide to employees whose home-to-work trip costs exceed 6% of their base salary. be transformed into smart cards ? How would the operators establish revenue clearing systems? Should the smart cards be just for transport or for other purposes (banking, meals, sports tickets, etc)? How should these new systems be introduced? 5. Given that fare evasion and ticket fraud in a number of systems in Europe and Latin America reach 30%, smart cards may not only facilitate the integration with other modes but may also decrease the loss of revenues, thereby helping to achieve the elimination of subsidies and the intermodal integration of the system with a fair share for each mode. Objectives of the KM exercise 6. The primary objective of this KM exercise is to learn about the state-of-the-art in automated fare ticketing, in particular, the "smart card" and understand how it can be applied in a context where there are several private sector urban transport operators. Furthermore, since there have not yet been many applications of this technology in developing countries, this paper will attempt to put into context the advantages and disadvantages of introducing it in that environment, where the majority of the users are low-income populations. Methodology Used in this Report 7. The methodology followed was: Review bibliography on the subject; Get acquainted with the products available in the market; Visit several systems in the world where the system has been applied; Meet with the regional transport authorities to understand how the system was planned and implemented, its advantages and disadvantages; Understand the proposed organizations for the revenue clearing systems and how they interact with the operators; meet with operators to learn what are their views about the automated fare ticketing system and the revenue-clearing organization. Propose potential applications in the LAC region. Audience 8. The intended audience is the Urban Transport Thematic Group of the Bank and our urban transport borrowers in LAC. 9. Transit managers across the world are exploring and adopting electronic fare payment system concepts. One of the major incentives for this shift is that transit operators want to decrease expenditures on fare collection and lessen the associated security risks connected with collecting large amounts of cash and tokens while providing greater convenience for transit riders. Nevertheless, implementing a modern transit fare collection system is a complex initiative involving a variety of technological considerations, partnership issues, institutional changes, legal considerations, as well as rider acceptance issues. ELECTRONIC FARE PAYMENT: BASIC CONCEPTS ( This section draws heavily on "Advanced Public Transportation Systems: The State of the Art" -- Update '98, January 1998, U.S. Deaprtment of Transportation, Research and Special Programs Administration, Volpe National Transport System Center). 1. Electronic Fare Payment Advancements in card technology have created new capabilities and opportunities for transit fare systems. The technological advancements include: radio-frequency proximity cards; contact chip/stored-value bank cards; combined contact/radio-frequency cards (combi-cards); improved microprocessors; and development of multi-application software. The opportunities this type of technology can provide are: security, multi-function capability, open software solutions, data capacity and portability, and the "contactless" potential. The added value of Smart Cards versus existing card solutions is the security of the transaction. Smart cards offer secure data banks, requiring on-board, rewriteable, flexible memory solutions. The development of new software environments provide open programming solutions for multi-applications. A considerable benefit of the contactless smart card for a transit application is the quicker transaction time through the farebox or turnstile. This section will examine the spectrum of current and planned fare systems including the technology that makes them possible and the current challenges transit managers are confronting. Transit managers across the country are exploring and adopting coordinated fare payment systems that promise greater flexibility in fare structures, less expense in collection, and greater convenience for riders. Transit, like other service areas, has the desire to reduce the use of cash payments while improving customer convenience. New card technology offers transit managers the opportunity to integrate a new generation of electronic fare media and equipment that will provide a more cost-effective distribution and a more secure fare collection process. 2. Automated Fare Payment Systems The system or environment in which a card will be issued or used is a fundamental issue. Generally, cards will either be used in what is commonly referred to as an "open" (multiple card issuers and multiple service providers) or "closed" (a single card issuing organization) system. It is important to note that a system can and may evolve from a closed system to an open system. Two primary distinctions relevant to transit are: is the transit agency issuing and accepting it's own card; and is the transit authority accepting cards issued by other organizations. Historically, a closed system is how many transit agency fare programs have operated. Currently, transit authorities in the U.S. are using three types of fare payment media: magnetic stripe cards; credit cards; and smart cards. There are three types of smart cards: contact; contactless; and combi-cards. Extensive technological developments in many forms of payment media have recently occurred. The trend towards an "electronic cashless commerce" is a growing business practice being implemented worldwide. Interest from the financial, postal, and telecommunications industries are contributing to the rapid pace of technological advancement. Advancement in card technology will facilitate the acceptance of electronic payment media programs as a viable payment option for transit operators. Currently, stored-value and multi-use programs are in limited trials in U.S. cities. Multi-use transit projects are already in operation in other parts of the world. Ultimately, the success of electronic payment programs will depend on the degree of acceptance of the media by issuers, merchants and, most importantly, consumers. System definitions and overviews are detailed below. 2.1 Closed System Definition A "closed" system is one in which the card is issued by a single organization and can be used for that organization's services and other agreed upon service providers. Historically, a closed system is how transit agency fare programs have operated. Today, "closed" systems are also emerging at many large universities, such as the University of Michigan and Florida State University.137 2.2 Closed Transportation-Only System Overview Within a closed, transportation-only system, a transit agency or group of regional transit agencies issue fare media usable on any of the agencies' services. This system can be used to achieve an upgrade in the agencies' fare collection processes and/or generate additional ridership and revenue. Individual agency functions such as card production, distribution, revenue settlement, equipment acquisition and maintenance can be provided by one or more of the member agencies, a system integrator (contractor), or by a new organization created by the agencies. To achieve maximum benefits and efficiencies, re-engineering of operational procedures will have to be achieved. Coordinating the acquisition of equipment, installation and subsequent maintenance procedures will make multi-agency fare collection settlements more complex, but potentially more cost-effective. 138 2.3 Open System Definition The term "open" system can be interpreted differently. A truly open system can consist of multiple card issuers and multiple service providers (merchants). However, within the transit industry, an open system describes a fare payment system in which an outside organization's card (i.e., a bank or university) is accepted for use within the transit agency. There are three types of models that can be implemented in an open system. These models are discussed later. 139 2.4 Open System Overview Within an open system, a transit agency accepts the fare payment media from one or more outside issuers. Open systems contain three principal models or scenarios in which a transit agency can participate: 1. A transit agency can become a "merchant" in a participating program. Within this model, the agency will have to pay a transaction fee for their customer's usage. The principal benefit to this model is the agency reduces the risks associated with investing in rapidly changing technology and leverages infrastructure and card distribution costs with their partners. The card issuer will absorb this risk; 2. The transit agency can become a formal partner; sharing the benefits and risks associated with such a venture. Partnering as a co-issuer of the card can result in additional revenues and maximum market penetration; or 3. The agency can administer its own payment program. This model allows outside issuer cards to be used provided the cards comply with the program's requirements. A primary benefit to any type of open system model is broader market penetration. In addition, successful partnerships will offer greater opportunity to generate additional revenue . However, with an open system, partnership agreements, issues and conflicts become more prevalent and complex. A major disadvantage of an open system is the transit agency will have less control over fare collection and less flexibility with pricing. 140 2.5 Multi-Use System Definition The emergence of a multi-use smart card system is gaining interest with members of the transit community. The advent of integrated circuit "smart" cards and the use of stored value has created new opportunities to integrate more than one market with a single payment option. A multi-use application card can be established in various institutional environments including: transit-only; a more general public environment; or in an open system. 2.6 Transit Multi-Use Overview Transit operators will implement a multi-use program for different reasons. The transit agency's goals and objectives are critical elements in determining the type of multi-use program that is pursued. Additional factors such as availability of funding resources and availability of technology will also influence the program type. The nature of the institutional setting and partnership agreements will depend on the program initiator's goals and the capabilities and constraints of the organization. Adopting a multi-use payment system will require a fundamental change in the way an organization has previously operated. These changes will impact the consumer, participating merchants, banks, clearinghouses, and transit agencies. Many of the legal, regulatory, and policy issues concern the integration of multiple service providers, card issuers, as well as future technology development and deployment environment.141 There is growing commercial acceptance and availability of multi-use payment options, particularly in the banking and financial industry. Banks and financial institutions are extremely interested in seeing what the transit industry will do with multi-use cards because of the broad, geographically focused market transit provides access to. It is their hope that they can establish valuable partnership agreements with regional transit agencies, which in turn may provide opportunities to share card distribution, infrastructure and costs. More pilot tests are needed to see if a multi-use smart card can accommodate integrated electronic payment in a diverse, institutional While many obstacles exist, there are benefits to a transit authority in implementing a multi-use system. Potential benefits include: The desire to promote integrated, seamless regional transit through a "universal ticket"; Increase market base; Generate additional revenues; Improve data collection and ridership information; Reduce fare collection costs; and Improve customer convenience. 142 2.7 Closed Multi-Use Systems In a closed multi-use system the transit agency issued fare media can be used for other purposes such as telephones, or retail. The institutional support to carry out the production and distribution of cards, and the acquisition and maintenance of equipment can be provided by the agency, private contractor, or through a partnership with a separate company. The potential benefits to this system can include creation of an innovative, integrated fare system and increased market penetration. However, the transit agency's expanded role in a complex collection process with multiple merchants will be a primary disadvantage. This system will involve complex legal, regulatory, and political hurdles which may be difficult to overcome. 143 2.8 Types of Payment Media The use of cash in transit fare collection has long been seen as a problem. Many transit operators have sought to minimize the associated risks in favor of some sort of prepaid option. Currently, transit authorities in the U.S. are using three types of fare payment media. 2.9 Magnetic Stripe Cards BART, the San Francisco Bay Area Rapid Transit system, introduced magnetic stripe cards into the transit fare collection system. Now, nearly 30 years later, the magnetic stripe card continues to be implemented in various transit systems across the country. The magnetic stripe card is read by units located in computerized ticket machines and turnstiles. Ticket vending machines located in transit stations accept regular currency. The ticket value is then recorded onto the magnetic stripe. When the rider enters the system the turnstile read-write unit records the place and time of entry. For systems with a flat fare the reader deducts the fare from the value on the card and writes the remaining value. For systems with a distance-based fare, the exit station turnstile computes and subtracts the price of the trip based on length of trip, and in some transit systems, the time of day. 144 The principal benefit of the magnetic stripe card is the read-write magnetic stripe "stored value." This stored value represents a convenience for the transit rider and a benefit to the transit agency. A mag stripe card can hold a large number of fares, greatly reducing the number of separate fare purchase transactions a transit rider must engage in. The transit agency benefits from automated fare collection through lower labor costs and greater security in the handling of money. Although the concept of stored value is a principal benefit of the mag stripe card, there are some shortcomings with this technology. The mechanical systems that transport fare cards inside the read-write units can be prone to failure. These types of systems require frequent maintenance, which is often costly. More importantly, the processing of transit riders through the turnstile is substantially slower with mag stripe cards than with cash or tokens. The slow transaction time at the turnstile is due in large part to the process of putting the card into a slot located at the turnstile and retrieving it. To reduce the transaction time, and increase card life, some transit agencies have tried plastic mag stripe cards of normal automated teller machine thickness, designed for hand-held swiping through a read-write unit. Transit operators have found that this process is subject to problems, including the unreliability of the write operations in swipe-type read-write units. 145 2.10 Credit Cards A major benefit of credit cards is that it offers transit riders the convenience of a cashless fare payment medium. The major disadvantage of this payment medium is that the transit authority incurs a risk of accepting invalid credit cards, and must pay the card issuer a transaction fee. 2.11 Smart Cards Technically, "smart card" refers to a card with an embedded, pre-programmed integrated circuit or chip. However, many use the term to describe a variety of chipless automated cards. There are three types of smart cards: contact; contactless; and combi-cards. Contact cards require physical contact between the card and the reader, typically requiring the user to insert the card into a slot. Transaction time for these cards is longer and may not meet some of transit's unique needs. Reliability of contact readers in the transit environment is also a concern. Additionally, financial cards require different security checks than a transit card. These issues make contact cards less preferable among transit managers. Because of these issues, separate purses may be required for retail/banking and transportation applications. Contactless cards do not require insertion into a unit slot or reader. Instead, these cards are read by passing the card close to the reader unit. Contactless cards speed up the transaction time of the transit rider through the turnstile providing a greater convenience to the rider. While the transaction time is a benefit to contactless cards, customers and operators have expressed concern about the security of a contactless card. Systems must be designed to assure customers that their card could not be read inappropriately from a card reader. Customers must also be assured that the value of their cards cannot be stolen. Encryption and verification software needs to developed to provide adequate security for consumers. 146 The combi-card is a recent innovation in smart card technology that combines the characteristics of both the contact and contactless cards. Combi-cards can use either two separate purses for the interface or a single purse capable of being accessed in either manner. An electronic purse is an application in a card where value is stored for low dollar transactions. A card may be dedicated to the purse function or contain memory and programs for other applications. Cards 147 with separate memory and processing for the contact and contactless interfaces are called "hybrid" cards. Most developers are trying to integrate the microprocessor and memory into one card. This would reduce manufacturing costs and enable the user to access a single electronic purse in either contact or contactless mode if desired. Operational tests will assist in assessing the different card configurations and market acceptance implications. 148 3. State-of-the-Art Summary Extensive technological developments in many forms of payment media have recently occurred. The trend towards an "electronic cashless commerce" is a growing business practice being implemented worldwide. Interest from the financial, postal and telecommunications industries are contributing to the rapid pace of technological advancement. Transit, like other service areas, has the desire to reduce the use of cash payments while improving customer convenience. [149] Ibid. [150] Ibid. 4-8 Advancement in card technology will facilitate the acceptance of electronic payment media programs as a viable payment option f or transit operators. Currently, stored-value and multi-use programs are in limited trials in U.S. cities. Multi-use transit projects are already in operation in the United Kingdom, Germany, France, Australia, Netherlands, South Korea, and Hong Kong. 149 While there is considerable interest in multi-use programs, prospective participants will have to overcome many barriers. To successfully achieve the benefits of a regional fare payment system, many of the institutional aspects of the revenue collection process must be integrated or at least coordinated. Combining card production, distribution, and marketing of several agencies can be complex but it can produce significant cost savings. A clearinghouse or payment settlement process can be developed which can manage these processes. Participating agencies and merchants will have to agree on revenue management policies and procedures. Complex partnership agreements will need to be developed specifying each party's position with regard to responsibilities, ownership, costs, and revenues. Smart cards can produce a record of where the traveler has been. Many believe that it is important that this information be used only for purposes of providing ridership information so that riders' privacy is ensured. Since multi-use cards are in their earliest stages of development, few resolutions to these issues exist. 150 Ultimately, the success of any of these electronic fare payment programs will depend largely on the degree of acceptance of the media by issuers, merchants, and most importantly, consumers. 4. Applications 4.1 Seattle/Central Puget Sound Area, Washington In the Seattle/Central Puget Sound area, regional transit authorities have recently completed a smart card trial prototype demonstration project involving six transit agencies and the Washington State Ferry. The plan and implementation of a regional fare coordination program will enable customers to use one fare card on multiple systems throughout the four county Central Puget Sound area. Contactless smart card fare collection technology will be used to allow linked trips between bus, rail, and ferries and to significantly expand each agency's strategic fare policy capabilities. 151 Contactless smart cards were distributed to transit riders participating in the revenue service tests. Cards were configured as a fixed period pass with unlimited rides, stored ride, or stored value. Revenue service testing included installation and operation of the prototype demonstration equipment on four King County Metro coaches serving Boeing custom bus routes, and four Pierce Transit coaches serving a Seattle Express route. Non-revenue service testing consisted of portable versions of the equipment in a variety of environments, demonstrating the equipment to agency and stakeholders groups. Overall reactions from both the customer survey and focus groups were positive. The project is currently finalizing the business requirements phase. It was anticipated 152, 153 that these requirements would receive regional approval at the end of 1997 or early in 1998. 154 4.2 San Francisco Bay Area, California The TransLink system is being developed and implemented by more than 20 regional transit agencies in the Bay Area. The lead agency in this effort, The Metropolitan Transportation Commission, determined that the most appropriate form of technology would be a regional integrated system using contactless smart cards. An initial demonstration of magnetic stripe cards revealed that this technology was not flexible enough to meet regional needs. Partnerships with private companies have been encouraged. Private sector participation in system management, integration and operational processes, including clearinghouse functions, is expected to occur.155, 156 An Industry Review Draft of the TransLink Contract Book was distributed in early October 1997. The Contract Book serves as an introduction to MTC's planned regional fare payment systems. These documents have been distributed to firms, organizations, and agencies that have expressed interest in MTC's program.157 4.3 New York City, New York In 1990, the New York Metropolitan Transportation Authority (MTA) began implementation of an automated fare collection system. The MetroCard is a magnetic stripe stored-value card. Read/write ticket processing units are installed on all buses and in all rail stations. Cards can be purchased at stations and nearby retail units in specific denominations. The initial project was designed with the intent of expanding usage of the card to other regional transit operators as well as for tolls and other uses. The MTA established a company, the MTA Card Company, to implement this broader plan by entering into a joint venture with a private company. The MTA entered into negotiations with a bank over the terms of the partnership agreement. The two sides were never able to agree on the terms of the deal and negotiations were terminated in May 1996. The MTA is still hoping to proceed with integration of a multi-use program. The mechanism for administering these functions has not been decided upon. 158 4.4 Ventura County, California Seven transit agencies are currently participating in a contactless smart card program in Ventura County. The Passport program, initiated in March 1996, is a monthly pass, stored-value card that can be used on any bus in Ventura County. On-board recharging of the smart card can be accomplished by all but one program participant. In addition to the card payment system, the Ventura County Transportation Commission has implemented other APTS technologies, including automatic vehicle location and automated passenger-counting systems. Linking smart cards with these systems will provide the agency with valuable ridership information. 159 4.5 Ann Arbor, Michigan The Ann Arbor Transportation Authority has over 80 buses equipped with card readers to accept the University of Michigan "M" smart card. More than 35,000 trips were made using the "M" cards during a trial period. The trial tested the feasibility of using the University cards on buses and found the transaction time too long for the bus environment. The Ann Arbor Transportation Authority is now studying potential fare equipment changes that could accept both the university card and a transit issued contactless card. 160, 161 4.6 Atlanta, Georgia The Metropolitan Atlanta Rapid Transit Authority (MARTA) partnered with Visa and three banks in the VisaCash stored value, contact card rollout initiated at the 1996 Summer Olympic Games. Visa covered the cost of installing two card read/write units in 33 MARTA stations. Card vending machines were also installed in key transit stations around Atlanta. During the Olympics, MARTA represented the single largest use of VisaCash cards, accounting for 25 percent of all VisaCash transactions. MARTA has extended the pilot through an agreement with one of the three banks.162, 163 4.7 Cleveland, Ohio The Greater Cleveland Regional Transit Authority (GCRTA) has hired an evaluation firm to assist them in assessing the possibilities of integrating some form of electronic fare payment media into their system. GCRTA has been exploring possible multi-use arrangements with multiple partners including the Ohio Department of Human Services. 164 5. Standards and Interoperability The question of standards and interoperability are key concerns being raised by transit managers considering an electronic payment system. Regional fare coordination can only occur if there is compatibility with payment systems of other transportation operations within the region. Currently, standards exist for certain aspects of smart cards. However, there is no specification to ensure complete interoperability among the different card types and operating systems. Card standards are being developed by several international organizations: the International Standards Organization (ISO), the American National Standards Institute, and the European Committee for Normalization. Individual work groups (WG) and task forces have been established within these organizations. Card standards are being developed under ISO Standard Committee 17 (Identification Cards and Related Devices). The key working groups are WG1 (Mag Stripe Cards and Test Methods), WG4 (Contact Chip Cards), and WG8 (Contactless Chip Cards). 165 . [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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| The basic set of standards for contact cards is known as ISO 7816. ISO 9992 and ISO 10202 (security) | 5.1 Contact Cards | 09:09:14 02/01/03 Sat |