Digital Transactions Authoritative, insightful and timely information for payments professionals
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New Jersey Transit jumped a technological turnstile Wednesday in announcing that it is Google Inc.’s first transportation-agency partner to implement the Google Wallet smart-phone payment and loyalty system based on near-field communication (NFC) technology.
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New Jersey Transit’s move puts it a step ahead of other transit agencies that have tested or plan to roll out NFC and contactless card payments, both of which can use the same terminals at merchant locations. The most prominent example is the Utah Transit Authority, which already accepts contactless general-purpose bank cards and plans to roll out the Isis mobile-payments and marketing system in 2012. Isis is a joint venture of wireless carriers AT&T, Verizon Wireless, and T-Mobile.
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New Jersey Transit, which provides rail and bus service around the state and connections into New York City and Philadelphia, said customers could use Google Wallet to purchase tickets in Manhattan’s Penn Station at vending machines and ticket windows, and at Newark Liberty International Airport Rail Station (AirTrain). Google Wallet users also will be able to pay for fares on six bus routes and on some buses on a seventh.
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“Our partnership with Google demonstrates that N.J. Transit and the state are at the forefront of emerging technology, paving the way for further exploration of new customer-service technologies,” New Jersey Gov. Chris Christie said in a news release.
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Goggle Wallet is available through an app that runs on smart phones using Google’s Android operating system. So far the Samsung Nexus S is the only phone in the U.S. that has an NFC chip, though payment and telecommunications executives say more will hit the market soon. (Samsung just released a cousin to the Nexus S, the Galaxy Nexus.) And Citigroup Inc. so far is only U.S. bank to integrate card accounts with Google Wallet.
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With these limitations, New Jersey Transit is unlikely to be getting many NFC transactions soon. Consultant Peter Quadagno, a former banker who also worked for the New York City area’s Metropolitan Transportation Authority, said both types of organizations move very slowly in making major changes to their payment systems. “Transit authorities make banks look jack rabbits,” says Quadagno, president and chief executive of Quadagno & Associates Inc., West Chester, Pa.
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Quadagno, however, notes that a number of agencies have requests for proposals out for contactless fare systems. Public transit is an ideal market for contactless tap-and-go payments because of the necessity for high-speed throughput. Plus, many agencies want to upgrade their fare-payment hardware because the proprietary systems they installed in the 1980s and ‘90s are wearing out. “I think transit is a great place for this to start,” he says.
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Neither Google nor New Jersey Transit responded to Digital Transactions News requests for executive interviews. Google, however, indicated that more transportation agencies would soon adopt Google Wallet. “Our partnership with N.J. Transit is just the first step for Google Wallet and transit,” business product manager Marlo McGriff said in a post on the Google Commerce blog. “In the coming months we look forward to announcing several innovative transit solutions with our partners.”
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Gov. Christie’s release called the Google Wallet initiative a “public-private partnership … developed at no cost to N.J. Transit.”
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National retailers using Google Wallet include American Eagle Outfitters, The Container Store, Foot Locker, Guess, Jamba Juice, Macy’s, OfficeMax, and Toys “R” Us.
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