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Smart cards in transportation systems lead the way
CHIP TALK
Chip Talk Where leaders of the smart card revolution air their views
Smart cards in transportation systems lead the way Public transport’s launch of contactless technology in the 1990s was the first significant mass application of contactless smart cards. Today, with improved contactless applications and an increasingly large array of added-value commuter services, contactless transport’s usage rate continues to surge in some of the world’s largest cities. Olga Titova-Candel, product manager for Transport at Oberthur Card Systems examines the shape of things to come. Transit take a new route
“If you look at why contactless transport systems have been successful you can see that contactless transport ticketing responds to the requirements of both operators and end users. Operators reduce their system’s fraud and maintenance costs by eliminating inefficient paper-based fare collection systems. Their data collection and their reporting capacity are also improved. Smart cards drastically reduce transaction times to pay for tickets, meaning less queuing and improved service. For an operator, more people through the gate means a more effective use of the overall transport network. So contactless clearly works. “For a commuter, smart cards that use eticketing systems provide more functionality than old paper-based tickets. Transportation cards enable multi-service such as e-purse, car parking or retail purchases for users and can be positioned as ‘city’ cards. The first multi-services transportation cards were deployed on a large scale in Asia. Hong Kong’s Octopus, EZ link in Singapore, Easy Card in Taiwan and T-Moneta in Korea all use multi-service cards which operate as consortiums between the respective transit operator, local banks and public organisations. Converged e-ticketing
“Mass transit cards that combine contactless payment with multiple service platforms in a single device are giving public transport systems a new perspective. Taking leverage on Oberthur’s knowhow, the deployment of secure contactless technology in the payment market offers an exciting convergence approach for the transport sector and represents a strong potential segment for transportation cards. Commuters can now use their credit or debit cards in transportation systems such as the Visa OnePulse card in London with Oyster, or the New York metro card with a built-in MasterCard application. “More security in contactless has also led to more diversity in payment methods. Transportation operators looking to diversify their sales channels
February 2008
can now also leverage new techniques such as the reloading of transport tickets via the internet, or by mobile phone. Today, operators are launching trials to allow passengers to download transit information onto their mobile phones just by tapping the phone against posters embedded with contactless chips. Curing cost overruns through convergence
“Transport operators still face the major hurdle of cost when integrating electronic ticketing into their systems, especially when it must co-exist with their traditional existing paper and magnetic stripe fare collection systems. Operators face major pressure to control costs when issuing tickets for ‘occasional’ mass transit customers. In addition, operating cost control is a crucial issue for transit agencies. As a consequence, operators are becoming more willing to partner with other smart card-based solution issuers in an effort to reduce these overheads using more cost-efficient electronic-based solutions. “This trend is proving a catalyst for new collaborative partnerships between transit operators, the retail payments industry and other sectors such as mobile communications. This win-win orientation will provide occasional travellers with transport access via either their mobile or payment card. Transportation operators are turning to convergence to reduce their costs and improve both passenger services and transport network capability. Minding the gap
“At the centre of transport operators’ technology decision making is application interoperability. Two ISO standards are employed by different transit networks in their infrastructures, with the majority of smart transportation cards today being based on the ISO 14443A or ISO 14443B. Proprietary technologies such as Felica continue to co-exist in the Asia-Pacific markets. The introduction of new technologies for transport such as the use of mobile phones and payment cards provide a new demand to create an interoperable environment. “Interoperability and security requirements were key objectives in the development of two European
transit projects, ICARE and Calypso, which established the Calypso open specification to provide both e-ticketing with multi-service functionalities. Calypso became the first main transit market initiative for secure contactless smart cards. Many transit operators have successfully implemented Calypsocompliant transit systems in large, medium and small scale networks in many countries, including France, Portugal, Italy, and Belgium. NonEuropean countries such as Mexico, Israel have also adopted the Calypso standard. Other ways to enable inter-network interoperability are currently under analysis today, and different industry stakeholders are working toward a common specification for e-ticketing systems at a national level, such as ITSO in the UK market, or VDV for Germany. A ticket for the future of transit
“One of the most important commercial rollout opportunities for mass transit-ticketing could be the launch of mobile handsets based on the Near Field Communication (NFC) contactless standard. NFC enables commuters to pay for tickets using their mobile phone with a transport network’s existing card-based fare-collection infrastructure. For transit operators, NFC could help resolve the issue of interoperable ticketing and provide greater commuter flexibility. Multiple NFC projects with transit operators have been launched in the USA, Japan, South Korea, Singapore, China, Taiwan, Germany, France and Austria. “Oberthur NFC solutions have enjoyed unprecedented customer satisfaction during the first trials. The next key question for the future will be the creation of convergent ecosystems that integrate e-ticketing systems with new banking or mobile schemes. “In the long term, other contactless media that would carry a transit application, like a USB key, bracelet or wristwatch would be a natural progression that would make it easier to carry the product. The way forward for transport
“Operators must decide now the future direction that their technology will take. Multiple innovation choices, including secure contactless payment, NFC and new form factors are all on the radar for decision makers. These new technologies also provide many opportunities for operators to resolve existing issues relating to fare collection systems. By integrating into new ecosystems with banks, service providers and mobile operators, transport operators can maximize the potential of these technologies and provide the commuter with converged, secure, convenient and interoperable services at any point in their transport network. Contact: Olga Titova-Candel, product manager for Transport at Oberthur Card Systems, Tel: +33 1 47 85 54 00, Fax: +33 1 47 85 41 50, email: o.titovacandel@ oberthurcs.com, Web: www.oberthurcs.com.
Card Technology Today
9
Chip Talk Where leaders of the smart card revolution air their views
Smart cards in transportation systems lead the way Public transport’s launch of contactless technology in the 1990s was the first significant mass application of contactless smart cards. Today, with improved contactless applications and an increasingly large array of added-value commuter services, contactless transport’s usage rate continues to surge in some of the world’s largest cities. Olga Titova-Candel, product manager for Transport at Oberthur Card Systems examines the shape of things to come. Transit take a new route
“If you look at why contactless transport systems have been successful you can see that contactless transport ticketing responds to the requirements of both operators and end users. Operators reduce their system’s fraud and maintenance costs by eliminating inefficient paper-based fare collection systems. Their data collection and their reporting capacity are also improved. Smart cards drastically reduce transaction times to pay for tickets, meaning less queuing and improved service. For an operator, more people through the gate means a more effective use of the overall transport network. So contactless clearly works. “For a commuter, smart cards that use eticketing systems provide more functionality than old paper-based tickets. Transportation cards enable multi-service such as e-purse, car parking or retail purchases for users and can be positioned as ‘city’ cards. The first multi-services transportation cards were deployed on a large scale in Asia. Hong Kong’s Octopus, EZ link in Singapore, Easy Card in Taiwan and T-Moneta in Korea all use multi-service cards which operate as consortiums between the respective transit operator, local banks and public organisations. Converged e-ticketing
“Mass transit cards that combine contactless payment with multiple service platforms in a single device are giving public transport systems a new perspective. Taking leverage on Oberthur’s knowhow, the deployment of secure contactless technology in the payment market offers an exciting convergence approach for the transport sector and represents a strong potential segment for transportation cards. Commuters can now use their credit or debit cards in transportation systems such as the Visa OnePulse card in London with Oyster, or the New York metro card with a built-in MasterCard application. “More security in contactless has also led to more diversity in payment methods. Transportation operators looking to diversify their sales channels
February 2008
can now also leverage new techniques such as the reloading of transport tickets via the internet, or by mobile phone. Today, operators are launching trials to allow passengers to download transit information onto their mobile phones just by tapping the phone against posters embedded with contactless chips. Curing cost overruns through convergence
“Transport operators still face the major hurdle of cost when integrating electronic ticketing into their systems, especially when it must co-exist with their traditional existing paper and magnetic stripe fare collection systems. Operators face major pressure to control costs when issuing tickets for ‘occasional’ mass transit customers. In addition, operating cost control is a crucial issue for transit agencies. As a consequence, operators are becoming more willing to partner with other smart card-based solution issuers in an effort to reduce these overheads using more cost-efficient electronic-based solutions. “This trend is proving a catalyst for new collaborative partnerships between transit operators, the retail payments industry and other sectors such as mobile communications. This win-win orientation will provide occasional travellers with transport access via either their mobile or payment card. Transportation operators are turning to convergence to reduce their costs and improve both passenger services and transport network capability. Minding the gap
“At the centre of transport operators’ technology decision making is application interoperability. Two ISO standards are employed by different transit networks in their infrastructures, with the majority of smart transportation cards today being based on the ISO 14443A or ISO 14443B. Proprietary technologies such as Felica continue to co-exist in the Asia-Pacific markets. The introduction of new technologies for transport such as the use of mobile phones and payment cards provide a new demand to create an interoperable environment. “Interoperability and security requirements were key objectives in the development of two European
transit projects, ICARE and Calypso, which established the Calypso open specification to provide both e-ticketing with multi-service functionalities. Calypso became the first main transit market initiative for secure contactless smart cards. Many transit operators have successfully implemented Calypsocompliant transit systems in large, medium and small scale networks in many countries, including France, Portugal, Italy, and Belgium. NonEuropean countries such as Mexico, Israel have also adopted the Calypso standard. Other ways to enable inter-network interoperability are currently under analysis today, and different industry stakeholders are working toward a common specification for e-ticketing systems at a national level, such as ITSO in the UK market, or VDV for Germany. A ticket for the future of transit
“One of the most important commercial rollout opportunities for mass transit-ticketing could be the launch of mobile handsets based on the Near Field Communication (NFC) contactless standard. NFC enables commuters to pay for tickets using their mobile phone with a transport network’s existing card-based fare-collection infrastructure. For transit operators, NFC could help resolve the issue of interoperable ticketing and provide greater commuter flexibility. Multiple NFC projects with transit operators have been launched in the USA, Japan, South Korea, Singapore, China, Taiwan, Germany, France and Austria. “Oberthur NFC solutions have enjoyed unprecedented customer satisfaction during the first trials. The next key question for the future will be the creation of convergent ecosystems that integrate e-ticketing systems with new banking or mobile schemes. “In the long term, other contactless media that would carry a transit application, like a USB key, bracelet or wristwatch would be a natural progression that would make it easier to carry the product. The way forward for transport
“Operators must decide now the future direction that their technology will take. Multiple innovation choices, including secure contactless payment, NFC and new form factors are all on the radar for decision makers. These new technologies also provide many opportunities for operators to resolve existing issues relating to fare collection systems. By integrating into new ecosystems with banks, service providers and mobile operators, transport operators can maximize the potential of these technologies and provide the commuter with converged, secure, convenient and interoperable services at any point in their transport network. Contact: Olga Titova-Candel, product manager for Transport at Oberthur Card Systems, Tel: +33 1 47 85 54 00, Fax: +33 1 47 85 41 50, email: o.titovacandel@ oberthurcs.com, Web: www.oberthurcs.com.
Card Technology Today
9