EMV for transit only works for certain users

As EMV migrates to transit systems, the use cases become more important.

Without owning the fare media in transit systems, EMV acceptance generally means a flat fare is needed across the entire network. Capping rules and limits can be applied, but these are highly complex to implement and maintain in the field.

While this works well for infrequent travellers (such as tourists), it’s far less cost effective for regular commuters, concessions or children who’d usually benefit from a discounted fare. This also raises another challenge in considering those without bank accounts, such as children, who’d likely be without access to a bank card, for example.

As Andy Yip of Octopus International Business said, “operators need to keep in mind that not all passengers will have an EMV card. To be inclusive and adhere to the principle of public transport – to provide transportation to (all) public, a more inclusive and convenient option should always be available to everyone.”

Projects rarely plan to entirely replace the existing smartcard system, and with a Snapper report finding most only estimate for 20% adoption of EMV, it’s important to consider the ROI of EMV. The longevity of TfL’s Oyster scheme speaks to this. Since the introduction of EMV in 2012, contactless EMV still only comprises 22% of all journeys at TfL, and roughly half of the total pay-as-you-go journeys. In 2018, the launch of a new TfL app enabling passengers to top-up their Oyster card "on the go" from their smartphone and to view their journey history made this legacy media even more appealing and user-friendly. In addition to how big your current customer base is, this also poses the question of how important your brand is. To migrate entirely to EMV would forfeit brand ownership and management – not to mention all transactions would be subject to a cut from schemes and banks.

All systems require a level of risk management in order to maintain throughput levels - a purely online ABT system would require internet connectivity speeds and reliability currently unavailable. For EMV, this requires its own unique "payment and processing later" model to accommodate where funds may not be available. It’s possible to set up a settlement process with issuers, but this creates additional partnerships that, in turn, require time and money to manage.

A major benefit of an ABT system is increased access to valuable traveler data previously unavailable which can be analyzed to inform new and competitive business and pricing models.

With an EMV implementation, it’s worth noting that the involvement of schemes and banks will reduce the amount of data available to process and evaluate.

Undoubtedly, the coming years will be defined by a migration of AFC systems to ABT in some form. The level of convenience offered by EMV acceptance is high but it’s vital that before taking the jump, operators listen beyond the EMV buzz and consider all the factors.

Simply considering a hybrid ABT system with EMV included can be a game changer for operators to maximize the success of existing legacy systems, minimize costs, and easily enable acceptance of new fare media and the addition of new features. Singapore is just one example where they have moved from EMV to a hybrid system. EZ-Link, which covers both the Mass Rapid Transit (MRT) and Light Rail Transit (LRT) in Singapore, is a brilliant example of a value-adding ABT system. Managed via the mobile app, travelers can track transactions, block, and top-up their account on the move. The app also brings additional benefits such as a reward scheme, support for adjacent services such as car parking, and auto-reload functions. Travelers are also given the choice of using either their EZ-Link card or mobile as the fare media.

Another factor commonly overlooked by operators is the benefit of utilizing open standards. By championing openness, operators can be freed from the constraints and costs of vendor lock-in, while empowered to innovate and upgrade systems more easily and at a pace they define.