IMGCAP(1)]
More evidence that transit operators are becoming interested in accepting open-loop payment for fares: both MasterCard Worldwide and Visa Europe announced during the Cartes and IDentification 2008 conference and exhibition this month they are working with Paris subway, bus and tram operator RATP to enable riders to pay their fares by tapping their banking cards on readers at gates and on board buses and trams.
The parties hope to have a trial some time next year.
"There is a very good level of interest," Emmanuel Petit, MasterCard country manager for France, tells Prepaid Trends' sister publication Cards&Payments. "It's a complicated project."
France's postal bank, La Banque Postal, now the acquiring bank for bankcard purchases riders make when they buy RATP close-loop tickets, also is involved in the project.
RATP issues contactless cards for the closed-loop contactless fare-collection application, called Navigo. It has expressed interest in reducing costs for that fare-collection system. And one way to do that in the long run would to accept bankcard payments, which would enable both local residents and visitors to the Paris area to use Visa- and MasterCard-branded cards to access transit services.
But it would require large changes to its fare-collection system, including a more sophisticated back-end system. RATP also would have to change readers to support the open-loop application, which it could do during its normal replacement cycle. Also, financial institutions ultimately would have to issue millions of contactless cards. The cards also could be used for contactless retail payments, although there are few readers in stores now.
"The fact they are working with us, they definitely want to understand more so they can make a decision," says Omar Rifaat of the innovation and acceptance unit of Visa Europe.
Visa set up a mock RATP gate reader at its booth at the Cartes exhibition that accepts both Navigo and Visa's contactless application, payWave.
Others Consider Open-Loop Cards
Other transit operators or authorities besides RATP are considering introducing open-loop payment in the next few years, including authorities in New York City and London.
Both Visa and MasterCard already have launched trials or rollouts of open-loop payment for transit fares, including a pilot in New York City in 2006, enabling riders on one of the city's subway lines to tap to pay with Citigroup bankcards with MasterCard's PayPass application onboard. MasterCard has launched a small rollout in southern Taiwan, and Visa has introduced small open-loop transit projects in Turkey and Malaysia.
Visa and MasterCard banks also have issued cards with separate transit applications, including those in South Korea, the United Kingdom and Hong Kong.
Visa Inc., the publicly traded company that comprises all of Visa's regions except Europe, also announced at Cartes it would work with Los Angeles County Metropolitan Transit Authority for banks to issue prepaid Visa-branded cards that carry the authority's separate TAP contactless application for use paying fares on buses and trains.
Visa says prepaid cards will be issued at LA Metro kiosks with $500 load limits and on prepaid cards with $10,000 limits that cardholders could load via free direct deposit of their paychecks. The cards also would support Visa's payWave retail contactless payment application, along with supporting magnetic stripe purchases.
"It doesn't require them to be a credit or debit cardholder. You can also be a nonaccountholder and be able to automatically load that from your direct deposit of paychecks," says Stephanie Ericksens of Visa Inc.'s global product deployment unit. "This gets them familiar with Visa products and services."
