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Tag: account-based payment

Benefits and drawback of EMV Contactless Account-based Ticketing

Benefits and drawback of EMV Contactless Account-based Ticketing

EMV Contactless Account-based Ticketing

Source: Calypso

The major benefit of EMV Contactless certification

It relies on cards for which the certification is very thorough and a virtual guarantee of interoperability between cards and terminals.

However, for EMV, the validator (and the whole chain up to the Acquirer) must be PCI DSS Certified.

Using EMV contactless bank cards as secure ID media

It is a common way of using EMV contactless bank cards for public transportation.

This approach is employed by TFL (Transport For London). It consists of checking that a card is genuine and has not been black-listed when it is used for validating.

In standard EMV contactless transactions, the card has authorization for a small amount until the next chip and PIN transaction, typically a maximum of 20 Euros and when it is used, the counter is decreased from the amount paid. The transaction can be done offline. When the amount is reached, an online connection and/or PIN transaction is necessary to authorize the payment and reset the counter.

On the other hand, in transport, validators check that the card is genuine, acceptable and not hotlisted. This is performed in real-time and does not require an online transaction. Then a £0 transaction is triggered for every tap. Validators’ hotlists are regularly updated.

An authorization for an amount greater than the maximum trip is requested from the back-office to the bank. If the requested is accepted, this reserves the amount and therefore guarantees payment. If the request is denied, the information is then sent to validators to update the hotlist. This has for consequence that the first usage is always allowed.

The issuing bank will cover the cost of the very first trip, even when the account was blocked.

Major shortcomings of ABT

Network availability shortcoming

Traditional ABT systems rely heavily on networks as transactions are processed in a back-office server, which is not available when the network is down.

ABT terminals can buffer the transaction request and send the request to the back-office when the network connection is resumed. In that case, the terminal takes the risk of emulating a successful transaction for media that are linked to accounts that cannot be charged for lack of funds or for any other reason.

Concessionary profiles

As “pure” ABT POs only contain an ID, unless a network connection is available, there is no way for a terminal to ascertain whether the PO holder is entitled to concessionary fares.

Ticket inspection

As the information relative to ABT transactions is registered in back-office (and optionally in validators in addition to being stored in back-office), inspecting POs also requires accessing the back-office system.

In the metro, train, and in some bus and tram networks, ticket inspection is performed away from the validator/gate which means that relying on accessing the data directly from the validator/gate used by the traveler for inspection purposes is simply not feasible.

Others generic issues related to EMV :

  • Risk management
  • Data centralization
  • Susceptibility to hacking
  • Certification
  • Interoperability
  • PO security

Conclusion

Key benefits of EMV contactless-based ABT include the fact that card issuing and after-sales service are covered by third parties (banks), enrolment is automatic for bank customers and interoperability is mastered successfully.

The drawbacks of ABT schemes are network dependent, ticket inspection may face legal issues, concessionary ticketing is hard to implement, and finally that it removes some of the independence of transport authorities and operators.

Author Keith LauPosted on March 4, 2020March 4, 2020Categories TechnicalTags account-based payment, account-based ticketing, emv, emv contactless account-based ticketing, secure id media, TflLeave a comment on Benefits and drawback of EMV Contactless Account-based Ticketing

Singapore: SimplyGo is simply giveaway the local business to Visa and Mastercard

Singapore: SimplyGo is simply giveaway the local business to Visa and Mastercard

LTA (Land Transport Authority) introduces SimplyGo and Singapore has more ways to pay for trips on public transport now.

Techielobang.com April 2019

SimplyGo enables commuters to use their credit or debit cards with contactless function for fare payments.

What type of cards can be used for SimplyGo?

All Mastercard contactless bank cards, including foreign-issued cards, with the EMVCo Contactless Indicator, will be accepted in public transit.

Four types of mobile payment that can be used

  • Apple Pay
  • Fitbit Pay
  • Google Pay
  • Samsung Pay

SimplyGo by tapping your credit card or phone

Straitstimes April 2019

SimplyGo is not replacing existing payment methods such as EZ-link cards, but rather, providing commuters with another choice.

Senior Minister of State for Transport Janil Puthucheary first announced the scheme in Parliament last month, following a two-year trial which began in 2017.

Mastercard Singapore saw 26 million transactions from 100,000 users during the 2 years trial period began in 2017. It expects numbers to increase with SimplyGo’s official launch.

Does it really bring convenience to users?

What Card Community Sept 2019.

It was found that of the 80 people observed tapping in/out of the MRT station, only 15 of them were using a credit card for payment – less than 20% of the whole sample!

SimplyGo’s biggest advantage is that you can now earn credit card rewards with your public transport payments, something that was not readily available before – topping up your EZ-Link using your credit card at the ticketing machine, unfortunately, doesn’t give any rewards.

Benefits and drawback of EMV Contactless Account-based Ticketing

Technical Blog March 2020

Key benefits of EMV contactless-based ABT include the fact that card issuing and after-sales service are covered by third parties (banks), enrolment is automatic for bank customers and interoperability is mastered successfully.

The drawbacks of ABT schemes are network dependent, ticket inspection may face legal issues, concessionary ticketing is hard to implement, and finally that it removes some of the independence of transport authorities and operators.

SimplyGo, account-based ticketing, is a giveaway to Visa and Mastercard

Since 2002, EZ-Link has issued more than 40 million EZ-link cards. If on average of SG$500 usage per card per year, there are SG$ 20 billion processed every year.

Introducing account-based ticketing like SimplyGo simply giveaway the Singapore business to US-based Visa and Mastercard.

Conclusion

Singapore has overtaken the U.S. to become the most competitive nation in the world, according to the World Economic Forum (WEF) 2019.

Singapore should remove the tradition as a follower of the West particularly the US.

Singapore government including LTA should spend the effort to make EZlink a Singaporean cashless payment from public transportation to different vertical markets.

Effort should be spent on technology innovation to make EZlink a true mobile payment system supporting all IOS and Android phones.

The author has over 19 years of experience in the automated fare collection industry. The latest development of mobile wallets is worth looking into. To learn more, please visit mobileafc.net

Author Keith LauPosted on February 27, 2020March 10, 2020Categories AsiaTags account-based payment, EZlink, LTA, mastercard, simplygo, singapore LTA, visaLeave a comment on Singapore: SimplyGo is simply giveaway the local business to Visa and Mastercard

MTA’s Contactless Payment surpasses 3 million taps, a successful OMNY to Visa/Mastercard conversion?

MTA’s Contactless Payment surpasses 3 million taps, a successful OMNY to Visa/Mastercard conversion?

The Metropolitan Transportation Authority (MTA) has announced that OMNY, the new contactless fare payment system, has surpassed three million taps.

intelligenttransport.com Sept. 2019

The growth in use is said to have come over the course of just six weeks; a week faster than the system’s growth from one million to two million taps and four weeks faster than it took OMNY to reach one million taps.

MTA officials also unveiled the next stations where contactless readers will be available starting in December 2019 including Penn Station, Whitehall Street, South Ferry, 86 St Bay Ridge, Sutphin Blvd-Archer Av-JFK, St George and Tompkinsville stations on the Staten Island Railway.

“We are working relentlessly to deliver this new fare payment system effectively through meticulous and continuous testing and monitoring. We are excited to start this next phase to bring all MTA customers the ease and convenience of tapping at the turnstile.” 

A phase of installations that will bring the new contactless fare payment system to all 472 stations as well as all MTA bus routes by the end of 2020 is said to begin in December 2019. 

Winners and Losers

The project is expected to cost about $644 million — $200 million more than what the authority estimated in 2016.

New York Times July 2019

Subway Fares Are Rising Again. But That Won’t Solve the M.T.A.’s Crisis.

New York Times Feb. 2019

OMNY and Cubic, the solution providers are definitely the winners as they received $644 million to build the contactless payment system for MTA.

Visa and Mastercard are definitely the winners because they will charge about a 3% service fee for each transaction.

Passengers from outside New York City will be the winners as well. They don’t need to buy OMNY card and use their own credit cards.

MTA is a loser because they have to finance $644 million for the system but there are no financial benefits from them. MTA still have the burden of the OMNY system including the ticket top-up machines.

The taxpayers of New York are the ultimate losers. They will bear the financial burden without benefits because they use the OMNY card only.

OMNY Card should go after High-Profit Income from Retail Market

OMNY Card with a big user base can be a good cashless payment for convenience stores, fast food restaurants or retail stores. It has a competitive advantage over Visa or Mastercard that people carry it every day and there is no penalty for late payment.

According to the experience of Hong Kong, the transaction fee of the retail market will be an attractive income to MTA.

Conclusion

With the big customer base like MTA’s OMNY card and also latest mobile payment technology, OMNY card can be easily established itself as the local cashless payment icon in New York.

Not only it saves the taxpayers’ big money to invest further on new account-based open payment for New York, but it will also bring attractive income to the city of New York.

Learn more about the latest mobile payment technology for public transit and retail, please visit mobileafc.net

Author Keith LauPosted on January 9, 2020March 10, 2020Categories New YorkTags account-based payment, contactless payment, mastercard, mobile payment, mobile wallet, mta, new york, new york city, omny, omny card, visaLeave a comment on MTA’s Contactless Payment surpasses 3 million taps, a successful OMNY to Visa/Mastercard conversion?

Why Irish NTA replaces Leap cards with account-based payment?

Why Irish NTA replaces Leap cards with account-based payment?

The Journal, Nov. 20th, 2019 link

Plans progress to replace Leap cards with account-based payment by 2027

Cash payments were still common among some passengers and accounted for up to 20% of all journeys, which slowed down boarding time.

The National Transport Authority has issued a market consultation notice to engage with potential service providers as part of its plans to advance the implementation of an Account-Based Ticketing (ABT) system across the bus, rail, and light rail network.

It will allow passengers to pay for their journey through their mobile phones, bank cards or official ID card or passport, removing the need to carry a special card for commuting.

Why replace it with an account-based system?

7 years to integrate a cashless technology that’s been around for the last 5 years…. that’s absolutely embarrassing!!

Tony Henry, comments on The Journal

… If this would be the case would it not be a quicker / easier solution to update the app rather than overhauling the entire system. Especially a system that completely eliminates cash / topup payments

Kevin Mischling, comments on The Journal

Over three million Leap cards have been sold since the €55 million smart card system was introduced in December 2011, with transactions worth over €320 million processed last year – up almost 16% in 2017.

Why the authority wants to invest a large amount of money probably over €20 million and to giveaway the profitable and growing fare collection business to Visa, Master Card, Apple Pay,…?

Why not spend the money to develop its own account-based payment, mobile-based payment or to develop the local vertical market like retail, event ticketing?

Conclusion

The author has over 18 years of experience in the automated fare collection industry. The latest development of mobile wallets is worth looking into. To learn more, please visit mobileafc.net

Author Keith LauPosted on December 16, 2019Categories Urban Mobility in Different CitiesTags abt, account-based payment, afc, automated fare collection, cubic, cubic transportation, ireland, mobile payment, NTALeave a comment on Why Irish NTA replaces Leap cards with account-based payment?

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