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Bus, Subway, Train Fare Collection Smartcards

The main application of contactless smart cards today is public transport. Contactless smart cards allow queuing times to be greatly reduced, saving time and money for both the passenger and service provider. Using a contactless card with journey credits or money stored on it, smart card technology provides a simple, convenient payment method.

In the field of public transport, (microcontroller) smart cards can be used for instance for registering the fare upon entering the bus or train and charging it to the passenger's account. The essential features of this smart card are that it enables cashless payment, it functions as an electronic ticket, and it deduces and charges the correct fare. Prepaid electronic tickets remain valid even when fare increases are introduced, and season or monthly tickets can begin on any day within the month.

Smartcards for fare payment allow transit systems to handle all fare categories and process different kinds of fares (single-trip fares, period passes, special fares) in an automated, user-friendly and cost efficient way.

The key benefit is the speed with which transactions can be performed as the card only needs to be placed next to the reader to pay for the fare. This makes contactless systems very convenient and attractive to users as well as to service providers, reducing queuing and delays by allowing passengers to get on or off faster. Also, because the card is contactless, the card reader can be in a sealed unit, protecting it from the environment and reducing maintenance costs.

Smart cards can also help reduce the amount of cash needed in the system, allowing fast and accurate revenue collection and effective financial management with audit trails. They can easily be programmed to support different tariffs for season tickets and concessionary fares for specific population groups, helping optimise the ticket issuing process and reducing administration costs. Also, depending on the application and type of card used, parameters such as time, date and journey can be encoded on the chip to secure authorised use.

The smart cards and smart paper tickets will electronically store travel details and will enable passengers to gain quick access to the transport network. Customers will pass their MIFARE-based card past card readers situated at the entry of the bus. The cards can be reloaded at retail sales outlets or ticket vending machines.

As the system uses radio frequency technology, passenger throughput can be increased and congestion reduced at peak travel periods. In addition, smart card ICs contain security features which will help ensure that the cards are virtually impossible to replicate, cutting down also on the level of fraud.

The Ajax and Burlington Transit systems in the Toronto area were the first in North America (1991 and 1995 respectively) to implement contactless/proximity smartcards in this way. Both systems were designed, produced, and installed by Precursor Ltd. of Toronto.


Transit users have the flexible choice of using the smartcard's reloadable value to pay individual fares, to activate different types of period passes, and/or to pay for accompanying multiple fares. Within the period pass options, users can activate a 31-day pass at any time (instead of being restricted to a monthly pass). This flexibility not only assists users to make better payment choices, but also overcomes congestion and staff overloading for the transit system at the end of each month.


An important by-product of smartcards are the detailed data they can produce on ridership and use patterns. This is a great resource for transit management, previously available only from expensive manual surveys. The data can support greater operational efficiencies and enhanced marketing strategies, giving transit management a new edge.

Oyster Smartcards in the London Underground Subway System

02/05 - London transport chiefs intend to expand the use of Oyster cards to pay for small purchases such as newspapers and milk. More than 2.2m passengers use the Oyster smartcard to pay for their journeys, and Transport for London aims to team up with financial institutions to allow the cards to be used for shopping. The value of purchases would be deducted from a customer's card, saving them the need to fumble for coins or hand over notes.

The expansion plans for the Oyster card echo those of the Hong Kong Octopus smartcard, which has about seven million cards in circulation. In addition to making journeys on the subway the Octopus cards can be used as a cash alternative in phone booths, vending machines and snack bars.

Companies providing fare collection consulting, equipment, & services.

Canada to hop aboard smart transit bandwagon

11/29/2004 by Fawzia Sheikh

Although Canadian transit authorities have been slower to embrace smart card technology for public transportation than their counterparts in Europe and Asia, this is changing as large cities and small- and mid-market centres catch on to the concept.

One of the latest efforts in Canada is taking place in the Greater Toronto Area, where 12 transit agencies, including the Toronto Transit Commission and GO Transit, are banding together to deploy a smart card system that will be completely rolled out in 2008 or 2009.

This service will allow customers to use a fare card to ride on any participating GTA transit service without pre-purchasing tickets or passes, having the exact cash fare for each service provider or knowing in advance the fare policies.

Smart cards contain embedded chips that are recognizable to an electronic reader even through a purse or wallet. Customers never have to pay directly for fares again, as more money can be uploaded to smart cards overnight from bank accounts if they choose.

Smart cards, which are digitally encrypted, are designed to provide better security than simple cards with magnetic stripes. Even if someone was able to crack the technology's code and add monetary value to the card, the system will quickly discover it's a "rogue reload" and shut down the card, said Paul Gooderham, president of the Gooderham Group in Newmarket, Ont., a consultancy specializing in the implementation of smart card fare collection systems.

"If you go around the world, you'll find over a hundred places that utilize smart cards in what I would refer to as a closed system," explained Michael Jordan, associate partner of consultancy Accenture in Toronto. "That's a single system.

"What we're trying to do here in Toronto is to extend that from one single system to multiple transit systems. So from a closed to an open system."

Other large Canadian munipalities like Montreal, Vancouver and Ottawa are also exploring smart card solutions. Montreal, which conducted a competitive procurement process almost three years ago, is in the process of implementing systems based on smart cards and magnetic stripes, said Gooderham.

"In Vancouver's case, they have a magnetic system. They are doing studies as we speak to determine the viability of implementing a smart card system to replace the magnetics," he said. "There's a groundswell of interest with these small to medium-sized transit properties who are seeing that those economies can be available to them as well."

For instance, St. John's, Nfld. is in the midst of developing a service to be used for its 54 buses. Saskatoon is preparing a business case outlining the viability.

He said in the U.S., San Francisco is "well down the road to implementation;" Washington, D.C. is running a good solution; Seattle is putting in a system; and Minneapolis, San Diego, Houston and Atlanta are "all at various stages of implementation."

Although the GTA's regional smart card system is pegged at $200 million, Gooderham said ones that have multiple applications, such as loyalty programs involving several merchants, tend to be more expensive.

The real challenges of developing this strategy has less to do with the actual technology than the business issues, said Jordan. Setting up a regional system requires "a mechanism to clear and settle the payments between the participating transit properties or agencies," he said.

In the case of the GTA, a clearinghouse mechanism will allow commuters travelling across the borders of the participating 12 agencies to travel seamlessly and pay only one fare, he said.

Other business hurdles include convincing transit agencies to agree to fare card policies and developing rules on sharing the cost of the common infrastructure, added Jordan.

As the GTA develops its plan, it will probably look to the Netherlands, a country with a population of about 17 million people in which 15 transit operators have banded together to create a regional smart card service for bus, tram and rail services that will be complete in 2007 .

"People are using it like mad. It's taking away thresholds of public transport," said Jeroen Kok, CEO of Trans Link Systems in the city of Amersfoort, last week at a conference on transit issues in the GTA.

Kok said one of the smartest decisions he made was to set up a separate company in which the five largest operators in the Netherlands are shareholders, giving them the right to approve annual budgets but no other mandate. As far as he's aware, it hasn't been done elsewhere.

Usually a government body or a single entity that expands will oversee this type of project, he said. In other cases, a steering committee is in charge, but he warned it's hard to work like this on a massive regional transit effort because "everybody wants to decide on everything on a daily basis."

Australian students get travel smartcard for trial

Chris Jenkins -

01/18/05 - STUDENTS returning to NSW schools this year will participate in one of the largest roll-outs of smartcards in Australia.

About 300,000 students who travel to and from school on private buses will be issued with chip-equipped bus cards at the beginning of the school year. About 2400 buses have been equipped with card readers.

The deployment is the first step in the $338.5 million Tcard integrated ticketing project, which aims to have all forms of NSW public transport on a common, smartcard-based ticketing system by 2007. A trial of the system for commuter trains, buses and ferries would take place mid-year, a Ministry of Transport spokesman said.

Some of the equipment had been installed, but much of the infrastructure was not yet in place, he said.

To facilitate the commuter trial, smartcard ticket readers are being installed at stations in Sydney's inner west and city circle train lines. After the trial, which will help determine final capacity requirements for the system, Tcard ticketing will be introduced gradually across the state's transport systems, and will become available to school students traveling on government-owned transport. The project is expected to be complete by early 2007.

About 7000 students from schools on Sydney's north shore tested the student smartcard system in July. This trial, which was not factored into the project's original budget, forced a year-long delay of the project and increased the cost by $18 million.

The integrated ticketing project was first floated by Transport Minister Carl Scully in 2002. A contract for it was awarded in February 2003 to Integrated Transit Solutions, a division of Perth-based smartcard outfit ERG. ITSL will run the NSW system for 10 years, at an estimated cost of $260 million. Queensland also is planning trials of a smartcard-based integrated ticketing project, aiming for deployment in 2006.

Like NSW, it has suffered delays. In July, Victoria embarked on an integrated ticketing project with a request for tender.

Victoria plans to have its integrated system -- which it claims will be cheaper to run than the existing $55 million a year system -- in place by 2007. ITSL estimates about two million tickets will be issued in the NSW Tcard scheme. The cards for the initial Student Transport Scheme for private buses would not use the full capabilities of the cards, a department spokesman said.

He said they were very much an interim version -- more like a "trip counter".

They would not be loaded with travel entitlement information, so students would still have to carry their conventional bus pass, he said. When student travel entitlements were loaded on the cards, bus-mounted readers would be able to police trip allowances, allowing entitlements to be "more effectively managed", he said.

The Transport Services Minister, John Watkins, said smartcards would allow the Government to rein in the $469 million cost of the school student subsidy scheme, because the technology would allow exact student movements to be tracked. Misuse of student travel entitlements is estimated to cost NSW about $112 million each year

Stop Talking and Start Paying

02/05 - Japan - NTT DoCoMo plans to start testing next month a service that would enable cellular phone subscribers to use their handsets to pay for train rides, the latest example of the Japanese wireless carrier's push to make the mobile phone a devices for financial transactions.

In developing the new service, expected to launch in January 2006, DoCoMo has partnered with East Japan Railway Co. and Sony Corp. The Mobile Suica service will enable DoCoMo subscribers using its FeliCa smart-card handset to pay for rides on  trains.

The current electronic payment card, dubbed Suica card, which has been issued to more than 10 million riders, can also be used to make purchases at selected restaurants, convenience stores and other shops inside and outside stations.

EasyCard Smartcard in Taiwan Going Multi-purpose

03/05 - EasyCard, which allows users to board buses, ride the MRT and park in public parking stations in the Taipei area, currently has over 5 million cards in circulation.

The Smart Card Union -- formed by Cathay United, Chinatrust Commercial Bank, Taishin International Bank and Taipei Fubon Bank -- won the bid to secure the right to issue the multi-purpose MRT EasyCard/credit card for three years by offering NT$412.5 million in royalties, a mere NT$2.5 million more than a bid led by rival Union Bank of Taiwan and Far Eastern International Bank.

All four banks in the successful consortium are shareholders of Taipei Smart Card Corp, EasyCard's distributor.

The Smart Card Union expects to issue more than 2 million multi-purpose cards, which combine credit, e-wallet and transport pass features, over the next three years.

Contactless Smartcard Ticketing System in New Zealand

03/05- Stagecoach New Zealand has selected Australian electronic ticketing company ERG as the preferred supplier of a contactless smartcard ticketing system.

Stagecoach will fit out all its 1000 buses in Wellington and Auckland with ERG's TP5000 smartcard readers, capable of deducting fares from smartcards when waved three to six inches in front of them.

If rail operator Toll NZ settles on the same smartcard payment technology, passengers could be offered "integrated ticketing" options, allowing them to pay for a journey involving both bus and train travel with a single smartcard-based electronic payment.

Passengers will be able to top up their smartcards at regular ticket outlets or on the buses themselves. Passengers may also be able to top up their smartcards over the Internet using a credit card. The "credit" would then be transferred to their smartcard the next time they passed it in front of a payment terminal.

Some contactless smartcard payment systems are capable of automatically deducting fares by scanning smartcards as passengers step on and off buses, but most patrons want to have the feeling of presenting their card to a reader.

ERG Transit Systems and Card System Group

Perth-based ERG Group employs 900 staff worldwide.  It has implemented electronic ticketing systems for the cities of Sydney and Hong Kong.

In Hong Kong's case, ERG supplied eight million smartcards which are compliant with the EMV banking standard, meaning they can be used as a generic stored-value card to purchase low-value items from stores such as 7-11, Starbucks and McDonald's as well as bus and train tickets.

The Hong Kong ticketing system cost more than $100 million and handles 7.5 million transactions each day.

GO Transit drives smart card plan - Ontario rail system adopting smart cards.

Smart card fare-payment system delays in Houston plague Cubic Transportation Systems - article 01/05


Thales has become one of the dominant forces in the European and Asian transit card markets.  As a secure systems integrator, Thales offers a broad range of solutions spanning public transport ticketing, conventional and electronic toll collection, fleet management and passenger information systems, urban traffic management and public car park management using faregates, automated vending equipment, card validators, and the core module, their our own contactless smart card reader.