State-of-the-Art Automated Ticketing Automated Ticketing ... ‘closed’ (a single card issuing...

New Frontiers in Passenger Rail

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Japan Railway & Transport Review 32 • September 200212 Copyright © 2002 EJRCF. All rights reserved.

State-of-the-Art Automated Ticketing

Jorge M. Rebelo

Electronic Fare Payment

Advancements in card technology havec r e a t e d n e w c a p a b i l i t i e s a n dopportunities for transit fare systems. Thetechnological advancements include:radio-frequency proximity cards; contactchip/stored-value bank cards; combinedcontact/radio-frequency cards (combi-cards); improved microprocessors; anddevelopment of multi-applicationsoftware. The opportunities this type oftechnology can provide are: security,multi-function capability, open softwaresolutions, data capacity and portability,and non-contact card usage. The addedvalue of smart cards versus existing cardsolutions is the security of the transaction.Smart cards offer secure data banks,requiring on-board, rewriteable, flexiblememory solutions. The development ofnew software environments provide openprogramming solutions for multi-applications.A considerable benefit of the non-contactsmart card for a transit application is thequicker transaction time through theturnstile. This article examines thespectrum of current and planned faresystems including the technology thatmakes them possible and the currentchal lenges t rans i t managers a reconfronting. Transit managers across thecountry are exploring and adoptingcoordinated fare payment systems thatpromise greater flexibility in farestructures, less expense at collection, andgreater convenience for riders. Transit,like other service areas, has the desire toreduce use of cash payments whileimproving customer convenience. Newcard technology offers transit managersthe opportunity to integrate a newgeneration of electronic fare media andequipment that will provide a more cost-effective distribution and a more securefare collection process.

Automated Fare PaymentSystems

The system or environment in which acard wil l be issued or used is afundamental issue. Generally, cards willeither be used in what is commonlyreferred to as an ‘open’ (multiple cardissuers and multiple service providers) or‘ c lo sed ’ ( a s i ng l e ca rd i s su ingorganization) system. It is important tonote that a system can and may evolvefrom a closed system to an open system.There are two primary distinctionsrelevant to transit: 1. Is the transit agencyissuing and accepting it’s own card?2. Is the transit authority accepting cardsi s sued by o the r o rgan iza t ions ?Historically, many transit agency fareprograms have operated a closed system.Currently, transit authorities in the USAare using three types of fare paymentmedia: magnetic stripe cards, creditcards, and smart cards. There are threetypes of smart cards: contact, non-contact, and combi-cards. Extensivetechnological developments in manyforms of payment media have recentlyoccurred. The trend towards ‘electronic

cashless commerce’ is a growing businesspractice worldwide. Interest from thefinance, postal and telecommunicationsindustries is contributing to the rapidpace of technological advancement.Advancement in card technology willfacilitate acceptance of electronicpayment media programs as a viablepayment option for transit operators.Currently, stored-value (stored-fare) andmulti-use programs are in limited trialsin US cities. Multi-use transit projectsare already in operation in other parts ofthe world. Ultimately, the success ofelectronic payment programs will dependon the degree of acceptance of the mediaby issuers , merchants and, mostimportant ly, consumers. Systemdefinitions and overviews are detailedbelow.

Closed systemsA closed system is one in which the cardis issued by a single organization and canbe used for that organization’s servicesand other agreed service providers.Historically, a closed system is howtransit agency fare programs haveoperated. Today, closed systems are also

Octopus system train gates in Hong Kong (B. Chalmers)

Japan Railway & Transport Review 32 • September 2002 13Copyright © 2002 EJRCF. All rights reserved.

emerging at many large universities, suchas the University of Michigan and FloridaState University1.

Closed transportation-onlysystem overviewWithin a closed, transportation-onlysystem, a transit agency or group ofregional transit agencies issue fare mediathat can be used on any of the agencies’services. This system can be used toachieve an upgrade in the agencies’ farecollection processes and/or generateadditional ridership and revenue.Individual agency functions such as cardproduction, distr ibution, revenuesettlement, equipment acquisition andmaintenance can be provided by one ormore of the member agencies, a systemintegrator (contractor), or by a neworganization created by the agencies. Toach ieve max imum bene f i t s andefficiencies, re-engineering of operationalprocedures will have to be achieved.Coordinating the purchase of equipment,installation and subsequent maintenanceprocedures will make multi-agency farecollection settlements more complex, butpotentially more cost-effective1.

Open systemsThe term open system can be interpreteddifferently. A truly open system canconsist of multiple card issuers andmultiple service providers. However,within the transit industry, an open systemdescribes a fare payment system in whichan outside organization’s card (a bank’scard) is accepted for use within the transitagency. There are three types of modelsthat can be implemented in an opensystem1. These models are discussedlater.

Open system overviewWithin an open system, a transit agencyaccepts the fare payment media from oneor more outside issuers. Open systemscontain three principal models or

scenarios in which a transit agency canparticipate:• A transit agency can become a

‘merchant’ in a participating program.Within this model, the agency willhave to pay a transaction fee for theircustomer ’s usage. The principalbenefit to this model is the agencyreduces the risks associated withinvest ing in rapidly changingt e c h n o l o g y a n d l e v e r a g e sinfrastructure and card distributioncosts with their partners. The cardissuer absorbs this risk.

• The transit agency can become aformal partner, sharing the benefitsand risks associated with such aventure. Partnering as a co-issuer ofthe card can result in additionalrevenues and maximum marketpenetration.

• The agency can administer its ownpayment program. This model allowsoutside-issuer cards to be used as longas the cards comply with theprogram’s requirements. A primarybenefit to any type of open systemmodel is broader market penetration.In addition, successful partnershipswill offer greater opportunity togenera te addi t iona l revenue.However, with an open system,partnership agreements, issues andconflicts become more prevalent andcomplex. A major disadvantage ofan open system is the transit agencywill have less control over farecollection and less flexibility withpricing1.

Multi-use systemsThe emergence of a multi-use smart cardsystem is gaining interest with membersof the transit community. The advent ofintegrated circuit (IC) smart cards and theuse of stored fares has created newopportunities to integrate more than onemarket with a single payment option. Amulti-use application card can be

established in various institutionalenvironments including: transit-only, amore general public environment, or inan open system.

Transit Multi-use Overview

Transit operators implement a multi-useprogram for different reasons. The transitagency’s goals and objectives are criticalelements in determining the type of multi-use program that is pursued. Additionalfactors such as availability of fundingresources and availability of technologywill also influence the program type. Thenature of the institutional setting andpartnership agreements will depend onthe program initiator’s goals and thecapabilities and constraints of theorganization. Adopting a multi-usepaymen t s y s t em wi l l r equ i r e afundamental change in the way anorganization has previously operated.These changes will impact the consumer,participating merchants, banks, clearinghouses, and transit agencies. Many ofthe legal, regulatory, and policy issuesconcern the integration of multipleservice providers and card issuers, as wellas future technology development andthe deployment environment2.There is growing commercial acceptanceand availability of multi-use paymentoptions, particularly in the banking andfinancial industry. Banks and financialinstitutions are very interested in seeingwhat the transit industry will do withmulti-use cards because of the broad,geographically focused market that transitprovides access to. Banks hope that theycan establish valuable partnershipagreements with regional t ransi tagencies, which in turn may provideopportunities to share card distribution,infrastructure and costs. More pilot testsare needed to see if a multi-use smart cardcan accommodate integrated electronicpayment in a diverse, environment.



While there are many obstacles, there arebenefi ts to a t ransi t authori ty inimplementing a multi-use system,including:• Integrated, seamless regional transit

using universal ticket• Increased market base• Additional revenues• Improved data col lect ion and

ridership information• Reduced fare collection costs• Improved customer convenience3

Closed multi-use systemsIn a closed multi-use system the transit-agency-issued fare media can be used forother purposes, such as telephones orretail. The institutional support to carryout production and distribution of cards,and the purchase and maintenance ofequipment can be provided by theagency, private contractor, or through apartnership with a separate company.The potential benefits of this system caninclude creation of an innovative,integrated fare system and increasedmarket penetration. However, the transitagency’s expanded role in a complexcollect ion process with mult iplemerchants will be a disadvantage. Thissystem will involve complex legal,regulatory, and political hurdles that maybe difficult to overcome1.

Types of Payment Media

The use of cash in transit fare collectionhas long been seen as a problem. Manytransit operators have sought to minimizethe associated risks in favor of some sortof prepaid option. Currently, transitauthorities in the USA use three types offare payment media.

Magnetic stripe cardsThe San Francisco Bay Area Rapid Transit(BART) system was among the firstoperators to introduce magnetic stripe

cards into the fare collection system.Now, nearly 30 years later, the magneticstripe card continues to be implementedin various transit systems across thecountry. The stripe card is read by read-write units in computerized ticketmachines and turnstiles. Ticket vendingmachines in transit stations accept regularcurrency and the ticket value is thenrecorded on the magnetic stripe. Whenthe rider enters the system, the turnstileread-write unit records the place and timeof entry. For systems with a flat fare, thereader deducts the fare from the valueon the card and writes the remainingvalue. For systems with a distance-basedfare, the exit turnstile computes andsubtracts the price of the trip andsometimes records the time of day1.The principal benefit of the magneticstripe card is the read-write magneticstripe stored value. This stored value isa convenience for the transit rider and abenefit to the transit agency.A stripe card can hold a large number offares, greatly reducing the number ofseparate fare purchase transactions. Thetransit agency benefits from automatedfare collection through lower labor costsand greater security in the handling ofmoney. Although the concept of storedvalue is a principal benefit of the stripecard, there are some shortcomings withthis technology. The mechanical systemsthat carry fare cards inside the read-writeunits are prone to wear and requirefrequent and costly maintenance. Moreimportantly, the passage of riders throughthe turnstile is substantially slower withstripe cards than with cash or tokens. Theslow transaction time is due in large partto the process of putting the card into theturnstile slot and retrieving it. To reducetransaction time and increase card life,some transit agencies tried plastic stripecards designed for hand swiping throughthe read-write unit but found that thisprocess is subject to various problems,including unreliable write operations4.

Credit cardsA major benefit of credit cards is that theyoffer riders the convenience of a cashlessfare payment. The major disadvantageis that the transit authority incurs a riskof invalid credit cards and must pay thecard issuer a transaction fee.

Smart cardsTechnically, smart card refers to a cardwith an embedded, pre-programmed ICor chip. However, many use the term todescribe a variety of chipless automatedcards. There are three types of smartcards: contact, non-contact, and combi-cards. Contact cards require physicalcontact between the card and reader,typically requiring the user to insert thecard into a slot. The transaction time forthese cards is relatively long and may notmeet some unique needs of transit.Reliability of contact readers in the transitenv i ronment i s a l so a concern .Additionally, finance cards requiredifferent security checks than a transitcard. These issues make contact cardsless preferable among transit managers.Because of these issues, separateelectronic ‘purses’ may be required forretail, banking and transportationapplications. An electronic purse is anapplication in a card where value isstored for low-value transactions.Non-contact cards do not requireinsertion into a unit slot or reader.Instead, these cards are read by passingthe card close to the reader unit. Non-contact cards speed up the passage of therider through the turnstile, providinggreater convenience. While the fasttransaction time is a benefit of non-contact cards, customers and operatorshave expressed concern about thesecurity of non-contact cards. Systemsmust be designed to assure customers thattheir card cannot be read from a cardreader inappropriately. Customers mustalso be assured that the value of theircards cannot be stolen. Encryption and


verif ication software needs to bedeveloped to provide adequate security1.The combi-card is a recent innovation insmart card technology that combines thecharacteristics of both contact and non-contact cards. Combi-cards can useeither two separate purses for theinterface or a single purse capable ofbeing accessed in either manner. A cardmay be dedicated to the purse functionor contain memory and programs forother applications. Cards with separatememory and processing for the contactand non-contact interfaces are calledhybrid cards2. Most developers are tryingto integrate the microprocessor andmemory into one card. This wouldreduce manufacturing costs and enablethe user to access a single electronicpurse in either contact or non-contactmode if desired. Operational tests willassist in assessing the different cardconfigurations and market acceptance1.

State-of-the-Art Summary

There have been extensive technologicaldevelopments in many forms of paymentmedia. The trend towards electronicca sh l e s s commerce i s g row ingworldwide. Interest from the finance,postal and telecommunications industriesis contributing to the rapid pace oftechnological advancement. Transit, likeother service areas, wants to reduce theuse of cash payments while improvingcustomer convenience. Advancement incard technology will facilitate acceptanceof electronic payment media programsas a viable payment option for transitoperators. Currently, stored-value andmulti-use programs are in limited trialsin US cities. Multi-use transit projectsare already in operation in the UK,Germany, France, Aust ra l ia , theNetherlands, South Korea, Hong Kong,and Japan.While there is considerable interest in

mul t i -use programs, prospect iveparticipants will have to overcome manybarriers. To successfully achieve thebenefits of a regional fare paymentsystem, many of the institutional aspectsof the revenue collection process mustbe integrated or at least coordinated.Combining card production, distribution,and marketing of several agencies can becomplex but it can produce significantcost savings. A clearing house orpayment settlement process can bedeveloped to manage these processes.Participating agencies and merchants willhave to agree on revenue managementpolicies and procedures. Complexpartnership agreements will need to bedeveloped specifying each party’sposition with regard to responsibilities,ownership, costs, and revenues.Smart cards can produce a record ofwhere the traveler has been. Manybelieve that it is important that thisinformation is used only for providingridership information and that riders’privacy is ensured. Since multi-use cardsare in the early stages of development,there are few current resolutions to theseissues. Ultimately, the success of any ofthese electronic fare payment programswill depend on the degree of acceptanceof the media by issuers, merchants, andmost importantly, consumers.

Application Examples

Seattle/Central Puget Sound,Washington StateSix regional transit agencies and theWashington State Ferry in the Seattle/Central Puget Sound area have recentlycompleted a smart card prototype trial.Implementation of a regional farecoordination program will enablecustomers to use one fare card onmultiple systems throughout the four-county area. Non-contact smart card farecollection technology will allow linked

trips between buses, railroads, and ferriesand will significantly expand eacha g e n c y ’s s t r a t e g i c f a r e p o l i c ycapabilities5. Non-contact smart cardswere distributed to riders participating inthe revenue service trial. Cards wereconfigured as a fixed period pass withunlimited rides, stored rides, or storedvalue. Revenue service testing includedinstal lat ion and operation of theprototype demonstration equipment onfour King County Metro coaches servingBoeing custom bus routes, and fourPierce Transit coaches serving a SeattleExpress route. Non-revenue servicetesting consisted of portable versions oft h e e q u i p m e n t i n a v a r i e t y o fenvironments, demonstrat ing theequipment to agency and stakeholdersgroups. Overall reactions from both thecustomer survey and focus groups werep o s i t i v e . T h e f i n a l b u s i n e s srequirements6,7 received regionalapproval in 19988.

Bus contact card reader in Salvador, Brazil(B. Chalmers)



San Francisco Bay Area,CaliforniaThe TransLink system is being developedand implemented by more than 20regional transit agencies in the Bay Area.The lead agency in this effort, TheMetropolitan Transportation Commission(MTC), determined that the mostappropriate form of technology would bea regional integrated system using non-contact smar t cards . An in i t ia ldemonstration of magnetic stripe cardsrevealed that this technology was notflexible enough to meet regional needs.Partnerships with private companies havebeen encouraged. Private-sectorparticipation in system management,integration and operational processes,including clearing-house functions, isanticipated1,7. An Industry Review Draftof the TransLink Contract Book wasdistributed in early October 1997. TheContract Book serves as an introductionto MTC’s planned regional fare paymentsystems. These documents have beendistributed to firms, organizations, andagencies that have expressed interest inMTC’s program9.

New York City, New YorkIn 1990, the New York MetropolitanTransportation Authority (MTA) beganimplementing an automated farecollection system using the MetroCardmagnetic stripe stored-value card. Read-write ticket units are installed on all busesand in all rail stations. Cards in specificdenominations can be purchased atstations and nearby retail units. Theinitial project was designed with theintent of expanding usage of the card toother regional transit operators as wellas for tolls and other uses. The MTAestablished the MTA Card Company toimplement this broader plan by enteringinto a joint venture with a privatecompany. The MTA entered intonegotiations with a bank over theagreement terms but the two sides could

not agree and negotiations ended in May1996. The MTA is still hoping to proceedwith integration of a multi-use programbut the mechanism for administeringthese functions has yet to be decided1.

Ventura County, CaliforniaSeven transit agencies are currentlyparticipating in a non-contact smart cardprogram in Ventura County. The Passportprogram, initiated in March 1996, is amonthly pass, stored-value card that canbe used on any bus in Ventura County.The smart card can be recharged onboardbuses of all program participants exceptone. In addition to the card payments y s t e m , t h e Ve n t u r a C o u n t yTranspor ta t ion Commis s ion hasimplemented other advanced publict r a n s p o r t a t i o n s y s t e m s ( A P T S )technologies, including automaticvehic le locat ion and automatedpassenger-counting systems. Linkingsmart cards with these systems willprovide the agency with valuableridership information1.

Ann Arbor, MichiganThe Ann Arbor Transportation Authorityhas over 80 buses with card readers thataccept the University of Michigan ‘M’smart card and more than 35,000 tripswere made using the M cards during atrial period. However, the transactiontime was found to be too long for the busenvironment and the TransportationAuthority is now studying potentialequipment changes that could acceptboth the M card and a transit-issued non-contact card1,7.

Atlanta, GeorgiaThe Metropolitan Atlanta Rapid TransitAuthority (MARTA) partnered with Visaand three banks to rollout the VisaCashstored value contact card at the Atlanta1996 Summer Olympic Games. Visacovered the cost of installing two cardread-write units in 33 MARTA stations.

Card vending machines were alsoinstalled in key transit stations aroundAtlanta. During the Games, MARTArepresented the single largest use ofVisaCash cards, accounting for 25% ofall transactions. MARTA extended thepilot rollout through an agreement withone of the three banks1,7.

Cleveland, OhioThe Greater Cleveland Regional TransitAuthor i ty (GCRTA) has hi red anevaluation firm to assist them in assessingthe possibilities of integrating some formof electronic fare payment media intotheir system. GCRTA has been exploringpossible multi-use arrangements withmultiple partners including the OhioDepartment of Human Services10.

Standards and Interoperability

The ques t ion o f s t anda rds andinteroperability is a key concern beingraised by transit managers considering anelectronic payment system. Regional farecoordination can only occur if there iscompatibility with payment systems ofother transportation operations within theregion. Although there are standards forcertain aspects of smart cards, there is nospecif icat ion to ensure completeinteroperability between different cardtypes and operating systems. Cardstandards are being developed by severalinternational organizations, including theInternational Standards Organization(ISO), the American National StandardsInstitute (ANSI), and the EuropeanCommittee for Normalization (CEN).Card standards are being developedunder ISO Standard Committee 17(Identif ication Cards and RelatedDevices) and the key working groups areWG1 (Magnetic Stripe Cards and TestMethods), WG4 (Contact Chip Cards) andWG8 (Non-contact Chip Cards)1.


Contact cardsThe basic set of standards for contactcards is known as ISO 7816. Additionalstandards ISO 9992 and ISO 10202(Security) pertain specifically to financial-transaction cards. Moreover, a set ofspecifications is being developed toaddress in teroperabi l i ty o f cardacceptance, security, and paymentfunctions. The jointly developed Europa/MasterCard/Visa (EMV) Specificationsgovern financial (debit and credit)transactions using contact smart cards butonly per ta in to debi t and credi ttransactions. Other organizations areworking to produce standards for prepaidand e-purse cards. This gap in standardsand specifications leaves the issue ofinteroperability between prepaid andstored-value cards unresolved. Stored-value programs in operation or on trialutilize ISO-compatible contact smart cards1.

Non-contact cardsThe development of relevant standardsfor non-contact cards for the transitindustry is covered by ISO 14443(Remote Coupl ing Cards ) whichaddresses physical characteristics, radio-frequency interface, transmissionprotocols, and transmission securityfeatures. The smart-card industry ismoving steadily towards adopting thestandards for non-contact cards andcombi-cards required for a successfulmove towards interoperability2.

Functional standardsFunctional standards and requirementsa l so need to be deve loped andimplemented. There are severalinitiatives underway at present. ITSAmerica (http://www.itsa.org) hasestablished an ITS Payment Systems TaskForce to identify issues that may beinvolved in electronic payment programsin all modes. In addition, the US DOT/Volpe Center has established a workinggroup11 under FTA sponsorship tasked

with defining functional requirementsand developing design guidelines formulti-use transit smart card applications.The APTA Fare Collection Committeealso plans to consider the issue througha s u b c o m m i t t e e . F i n a l l y, t h eTransportation and Multi-ApplicationWorking Groups of the Smart Card Forumare also reviewing multi-use card issues.

Non-contact Smart Card asKey to Personal Mobility

Planning a smart-card non-contactsystem raises 10 technical and marketingissues:

1. Should non-contact smart cards beonly (or mainly) for public transport?

User convenience issues in Tokyo (JRSuica), Hong Kong (Octopus), London(Travelcard) , and Seoul (Bus CardSystem) suggest that the answer is yes.Others push the case for mul t i -applications. Although there is still nofull-scale multi-application, projectsinclude several E-Purse providers (Proton,VisaCash). At first, financial institutionswere reluctant to be involved withtransport and were worried about thestricter security protocols needed forbanking. Nowadays, they realize thattransport smart cards have millions of

transactions per day and they want toexploit this market opportunity.

2. Should the card be non-contact orpartial contact?

A completely non-contact system permitsa smaller-capacity reader for chip cardsa n d d e c r e a s e s t h e n u m b e r o felectromechanical parts which cutsmaintenance costs.Conversely, a partial non-contact systemrequires an increased-capacity reader forhandling non-contact smart cards,magnetic cards (single trip), paper ticketsor even cash.In developing countries , non-contactsmart cards will co-exist with partiallynon-contact cards for some time but theconsensus is that the non-contact smartcard is better and faster.

3. Will the public embrace non-contactsmart cards?

The answer depends on how convenientthey are to use. The very rapidacceptance of the JR Suica in Tokyo andthe Octopus card in Hong Kong suggestthat the answer is yes.Obtaining the full benefit of non-contactsmart cards requires:• High-quality customer information

and training• Educating staff to answer passenger

Octopus system city bus in Hong Kong (B. Chalmers)



questions and assist with problems• Educating the public about the user-

friendliness (no need to think aboutfare) of smart cards

• Overcoming res i s tance whencustomers are accustomed to flat ratesor unlimited travel passes

• Offering incentives to intermodaltravel (discounts when using severalmodes/fidelity schemes/seamlesstravel)

• High-level anti- f raud/hacking/cracking measures

4. What are the advantages for theoperators?

The business case for non-contact smartcards requires consideration of the life-cycle cost of investment in cards,equipment, and clearing houses plus thecost of operation and maintenance. Sidebenefits include reduced fraud, bettermarket information based on accuratetravel patterns, and more sophisticatedticket products such as the ability toadjust fares according to time of day.

5. Should the system operator be keptin-house or outsourced?

Each t ype ha s advan t age s anddisadvantages; the Paris Transport

Authority (RATP) and the WashingtonMetropolitan Area Transit Authority(WMATA) both operate in-house systemswhile Seoul ( INTEC), Hong Kong(Crea t ive S ta r ) and London andMelbourne (Supplier Consortium) areoutsourced.

6. How should revenues be divided?This thorny issue has been resolved in anumber of ways by division betweenoperators in one mode (Seoul until now);between all operators in one system(Hong Kong, London); and between alloperators and other service providerslinked to the E-purse. London usessampling in the case of non-smart-cardrevenues (for length of bus ride).

7. What is the best method for timelyimplementation?

Timely implementation requires a clearchampion on either the contractor’s side(TransSys consortium for London, ERG forHong Kong) or the buyer’s side (operatoror service provider).

8. Should fares be debited at the startor end of the journey?

There are various schools of thoughtabout this. Either the maximum fare may

be debited from the stored value whenentering the system (Kowloon CantonRailway Corporation in Hong Kong,London Underg round , SMRT inSingapore) and then the unused partrefunded when leaving the system. Thisreduces fraud and obviates the need fortravelers to read fare tables, zones, etc.In the case of the Passport stored-fare cardused on private railways in Tokyo, theminimum fare is debited on entering thesystem and the extra is debited at exit. Ifthe card has insufficient stored fare, aticket for the balance must be purchasedfrom a fare adjustment machine at theticket wicket. Another solution is to debitthe stored value for an amount indicatedby the traveler when entering the system(bus trial in Harrow, UK).

9. Should the card be supplied with asleeve case?

RATP provides cards with a sleeve foreasy reading of the card value and otherinformation but it is bulky. The advantageof providing only a card is that it fits easilyin a wallet.

10. How much information should becentrally collected?

This is a very difficult subject that raisesimportant social questions about dataprivacy, etc. In some cases, all data iscentrally tracked (Hong Kong) while inothers, only limited data is collected bya decentralized system (RATP).

Conclusions

Most operators agree that introduction ofsmart cards will decrease maintenancecosts if the electromechanical-based farecollection is replaced completely byoptical/wireless readers. Most existingsystems still have both collection systems,resulting in much lower benefits.Operators also agree that a smart-cardnon-contact system allows faster passage

Suica system train ticket gate in Japan (EJRCF)


Jorge M. Rebelo

Mr Rebelo is Lead Transport Specialist of Latin America and the Caribbean Region at the World

Bank. He obtained Masters degree from MIT and MBAI from Mc Gill University. He joined World

Bank in 1987 and worked on urban transport projects.

thereby saving time. There is alsoagreement that the non-contact smartcard will decrease fraud, particularlywhen used for monthly passes andintegrated fares.The success of a non-contact card systemdepends on how the general publicembraces the system. In developingcountries, there are cost constraints thatm i g h t m a k e i n t r o d u c t i o n v e r ychallenging. For example, in Washingtonand Hong Kong, an initial investment of$10 and $6, respectively, is required. Itis doubtful that a deposit of this amountcould be afforded by many people inIndia for example. The deposit isimportant to operators because itrepresents a reserve revenue. However,a mechanism must be found to chargeeither a much lower deposit or to providecards for free, although the latter maycause card wastage. Other issuesconcern the card recharge function. Howmuch money will users in developingcountries be able to afford? If the amountis too small they will have to constantlygo back to recharge machines, creatingdelays. In many industrialized countries,the recharge machine accepts bills/coins,credit cards or direct debit from a bankaccount. This feature will require carefulstudy for developing countries wheremost people do not have credit cards oreven bank accounts . Somewhatunexpectedly, Hong Kong’s sophisticatedpopulation still prefers to add value totheir cards at station offices perhapsbecause they feel uncomfortable with therecharge machines.When used in buses, especially when thebus does not have a flat fare, locationfeatures must be added to determinewhere passengers get on and off. AGlobal Positioning System (GPS) is beingtested on Singapore’s buses.Staffing levels might not be cut easily incountries where vandalism is common.In Hong Kong and Singapore, there arevery severe penalties for vandals and the

presence of a single attendant is sufficientto prevent the already low levels ofvandalism. However, vandalism andtheft increased in Argentina when stationattendants were removed during anattempt to introduce the magnetic stripcards. Total removal of station attendantscould have severe consequences.The open system seems likely to be moredifficult to introduce in developingcountries, because it assumes that userswill have an electronic purse and mostwill not.Before introduction of a smart-cardsystem in any country, it is essential thatthe regional transport commission orequivalent is represented, and thebusiness rules covering tickets, passes,discounts, concessions, etc., are carefullydefined.Systems that have mastered use ofmagnetic strip cards in several modessuch as the TransLink system in Singaporewill switch more easily to non-contactsmart cards. Their business rules are clearand there is a regional transportcoordination commission.Whi le se lec t ing the appropr ia tetechnology is crucial , educat ioncampaigns to prepare users are importantfor succes. Consequently, any schedulefor introduction of smart-card systemsmust take education campaigns intoaccount. �

AcknowledgementThe author acknowledges the assistance from Messrs.

Dreibend (WMATA), the Secretari de Transportes de

la Republica Argentina, Wildermuth (consultant for

the Buenos Aires System), the Secretariat of

Metropolitan Transport of the State of Sao Paulo,

Bichara (Salvador, Bahia), Chambers (Octopus,

Creative Star, Hong Kong), Bourgeois and Portier

(Systra, RATP), Prakasam (LTA, Singapore), Tan and

Wen (Singapore SMRT).

This article draws heavily on ‘Advanced Public

Transportation Systems: The State of the Art—Update

‘98’ (January 1998, US Department of Transportation,

Research and Special Programs Administration, Volpe

National Transport System Center) and the original

version is available at World Bank website (http://

www.worldbank.org).

Notes1. Potential of Multipurpose Fare Media, Draft Final

Report, TCRP, Multisystems, Inc., Dove

Associates, Inc., Mundle & Associates, Inc., June

1997.

2. Smart Cards Seizing Strategic Business

Opportunities, The Smart Card Forum, The

McGraw-Hill Companies, Inc., 1997.

3. Smart Cards: Promoting Partnerships and Profits,

briefing by Michael G. Dinning, Volpe National

Transportation Systems Center, May 1997.

4. F. R. Holmstrom, Smart Fare Payment Systems

for Public Transit, Technical Brief, Volpe National

Transportation Systems Center, January 10, 1996.

5. Smart Facts: Central Puget Sound Regional Fare

Coordination Project, October 1997.

6. Smart Card Prototype Demonstration Project,

Final Report, IBI Group, June 1997.

7. M. G. Dinning, Volpe National Transportation

Systems Center, Cambridge, Massachusetts.

8. C. Carlson, King County Metro, Seattle,

Washington.

9. R. Driver, Metropoli tan Transportat ion

Commission, Oakland, California.

10. J. Frielich, Greater Cleveland Regional Transit

Authority, Cleveland, Ohio.

11. ITS America Web Site (http://www.itsa.org)

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