Digital Transactions Authoritative, insightful and timely information for payments professionals
America’s mass-transit systems in early 2014 are continuing their migration away from proprietary fare systems and toward so-called open-fare systems that can accept general-purpose payment cards as well as mobile payments. This week, the Washington Metropolitan Area Transit Authority, locally known as Metro, awarded a $184 million, 8-year contract to consulting and technology-services firm Accenture plc to develop a payment system that will include acceptance of chip-enabled credit and debit cards, government identity cards, and mobile phones equipped with near-field communication (NFC) technology.
Meanwhile, the New York City area’s Metropolitan Transportation Authority (MTA) celebrated the 20th anniversary of its MetroCard, a magnetic-stripe fare card that replaced the iconic tokens that subway and bus riders used for decades, triggering speculation that New York will eventually adopt open-fare payments.
Transit riders in the District of Columbia and its Virginia and Maryland suburbs will continue to be able to use their proprietary SmarTrip cards, but Metro officials clearly hope the wider array of payment options they’re planning will displace the old card. “While Metro pioneered the tap-and-go system we currently use, by today’s standards that system is cumbersome and the technology is not sustainable,” Metro general manager and chief executive Richard Sarles said in a news release. “The new technology will provide more flexibility for accounts, better reliability for riders, and real choices for customers to use bank-issued payment cards, credit cards, ID cards, or mobile phones to pay their Metro fares.”
Metro operates a 106-mile rail network in addition to 318 bus routes, and it also provides paratransit service. Accenture later this year will test its new system in 10 Metrorail stations, 50 buses, and two parking lots. Some 2,000 riders will be selected to participate in the test.
As in Chicago, where the Chicago Transit Authority is converting to an open-fare payment system dubbed Ventra that is run by Cubic Transportation Systems, Washington transit officials hope new technology will reduce their expenses for operating outdated proprietary fare systems. Once fully deployed, Metro says the open-fare technology will be deployed in about 1,000 fare gates, 450 vending machines, 1,500 buses, and 160 parking exit lanes. The new system will not accept paper tickets, and Metro says it will continue phasing out paper fare media, which today account for less than 10% of rides.
Accenture said in the release that its technology is built with commercial off-the-shelf software and will use “an open architecture that supports a range of payment options and includes the flexibility for future evolution in payment technology.”
Open architecture will enable Metro to more easily make changes should problems arise, says former MTA official and payments consultant Peter J. Quadagno, a partner with Atlanta-based Bank Solutions Group LLC. Quadagno also notes that Cubic installed Metro’s current fare system and has more transit-fare system installations around the world than Accenture.
As the incumbent, the new contract was “always theirs [Cubic’s] to lose,” says Quadagno. “It is surprising that they [Metro] would go off and award this to Accenture. I have to surmise that they saw what was happening in Chicago. Chicago’s been a mess.”
Spokespersons for Cubic and Metro did not respond to Digital Transactions News’ requests for comment. The CTA-Cubic Ventra rollout that began in the fall was marred by a host of problems that included fare readers double-billing some customers’ accounts or not recording taps, resulting in more than 900,000 free rides for which the CTA will bill San Diego-based Cubic $1.2 million. Reports about Ventra problems have dropped off considerably in recent weeks, however.
In New York, the Metro Card’s 20th anniversary triggered talk about the future of electronic payments on the nation’s largest transit system. The MTA has tested chip cards and according to media reports wants its fare system replaced by 2019, possibly with general-purpose cards and mobile payments. But the MTA hasn’t yet committed to specific technologies as have Chicago, Washington, and other cities. In its MetroCard release, the agency said only: “What’s next? Oh, we’re working on something even better.”
