REPORTER'S NOTEBOOK: Bridge Sought Between Transit, Smart Cards

What do transportation and smart cards have in common?

Not much - at least not yet - based on what was said at a conference last week in Philadelphia that was meant to bring those subjects together.

The conference, "Putting Transportation Payment on the Electronic Highway," was co-sponsored by the Smart Card Forum, the Intelligent Transportation Society of America, and the U.S. Department of Transportation.

Transportation industry officials were in the majority, but a smattering of bankers from the Smart Card Forum's membership also attended. Most of the high-tech transportation case studies were about radio frequency technology and magnetic-stripe cards rather than smart cards with their characteristic computer chips.

Catherine Allen, vice president of Citicorp and president of the Smart Card Forum, a multi-industry group that promotes the technology, said the conference was a step toward bringing banking and transportation together. Transportation - including mass transit, toll roads, and trucking - is isolated from the mainstream payments industry, she said, and its technology suppliers are not experienced with smart cards.

Government agencies are a big part of the transportation industry, and "the public authorities tend to follow each other," Ms. Allen said.

But she said budget cuts and consumer demand for multiple-function cards might inspire a "melding" of banks and transportation as electronic payment systems evolve.

A conference speaker, Wayne Spaulding of the Delaware Department of Transportation, discussed a partnership with Electronic Payment Services, owner of the MAC Network, and Wilmington Trust Co., a participant in EPS' forthcoming smart card trial.

As the pilot rolls out in Delaware next year, cards will be accepted on buses. Although the bank will charge transaction fees, the transportation agency avoids huge systems and equipment investments.

But other agencies have made other choices: The Washington subway's Go Card experiment uses a bulky radio frequency card; the New York City subway's MetroCard uses magnetic stripes; most highway toll projects, including New York City's imminent E-ZPass program and a toll road test in Orange County, Calif., use a radio frequency patch attached to cars' windshields. The toll is debited from a consumer's account as the vehicle whizzes past a collection point.

Ray Ribeiro, president of Echelon Industries Inc., described a public bus project in Ventura County, Calif., that uses radio frequency cards, also known as proximity cards.

He said radio frequency is the most reliable technology, followed by smart cards and magnetic cards.

Gilles Lisimaque, executive vice president of Gemplus Card International, the largest chip card producer in the world, expressed surprise at Mr. Ribeiro's estimate that one in 1,000 smart cards fails, compared with one in 15,000 proximity cards.

"In the smart card arena, you can't afford to have failures," said Mr. Lisimaque. He blamed the problem on the combination of technologies being used, including readers.

He displayed a radio frequency sleeve that could be used for toll roads when a smart card is inserted. The value stored in the card would be reduced by the transaction amount.

The last speaker, Andy Tarbox, vice president of chip cards at MasterCard International, implored the audience not to "reinvent the wheel. Use the EMV (Europay-MasterCard-Visa) standards," he said. "They're important."

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