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The Chicago Transit Authority, which operates the nation's second-largest public transit system based on annual ridership, in the next few days will issue a request for proposal for the development of open-loop contactless debit or credit cards that would enable riders to pay for transit fares and make purchases at restaurants and stores with the same card, the CTA says. In addition, the request would call for the creation of a reloadable, contactless prepaid debit card, the CTA says. The contactless debit or credit cards would be tied to the cardholders' checking or credit accounts, but the contactless prepaid card would not, the CTA says. "The first phase of the procurement process will be to examine the CTA's options for developing the card, considering possible procedures, management and cost of the program," the CTA said in a statement. "After reviewing these proposals and developing a final plan, the second phase will give companies the opportunity to submit proposals for the actual implementation of the program." Nick Holland, senior analyst for Aite Group, a Boston-based consulting firm, says if the CTA follows through with its strategy, it would be good news for contactless cards and for Near Field Communication. "The planets are starting to align for contactless," Holland says. "If the CTA upgrades to contactless cards, it will provide a strong argument for retailers near transit stations and bus lines to upgrade their terminals to accept contactless cards." However, transit systems and traditional point-of-sale payment terminals operate on different sets of contactless standards, Holland adds. Transit systems generally accept contactless cards use the MiFare standard and POS terminals use the ISO 14443 contactless standard. A dual-interface chip card, manufactured either by Oberthur Technologies or Gemalto N.V., easily would bridge the separate standards, Holland says. NFC-equipped cellular phones also would bridge the two technologies because could be used a point-of-sale terminals as well as transit authority entry stations, Holland says. Carole Brown, CTA board chairman, says the proposed system would make riders' lives easier. "With this new system, customers would benefit from the faster boarding times and ease of use, as nearly all fare transactions would be touch and go," Brown says. The CTA issues the Chicago and Chicago Plus cards, two contactless prepaid cards, but the cards can be used only to pay fares, a CTA spokesperson says.
