The Chicago Transit Authority appears closer to implementing an open-network electronic fare-collection system that would accept contactless card and mobile payments.
The authority says it still is analyzing proposals for the actual implementation of a new fare-collection system, which has drawn interest from some 12 bank and credit card companies, according to transit officials. “Right now, [we’re] in the midst of the procurement process,” says a spokesperson for the agency.
Chicago will hold a second round of bidding later this year, and it hopes a private company would replace a system that reportedly needs some $10 billion worth of upgrades. Some 1.6 million commuters use the authority’s bus and trains daily.
In June, Chicago-based mobile-payments company mPayy Inc. told PaymentsSource it was in the running as an option for the new system (
MPayy, however, is proposing a closed-loop program that uses a contactless sticker commuters would attach to mobile phones. Users who purchase the sticker (or card) could link it to their checking account and schedule account top ups.
Chicago’s proposed system also could spark interest from a rumored mobile payments scheme involving wireless carriers AT&T Inc., Verizon Wireless and T-Mobile USA (
Aaron McPherson, a research manager for payments at the Framingham, Mass.-based research firm IDC Financial Insights, said in an Internet presentation about mobile payments Aug. 26 the wireless carrier model should first focus on niche areas such as transit and parking meters.
“Mobile payments has worked well in transit” in Hong-Kong and Singapore, McPherson says.
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