18.2Fare Collection Media

The real problem is not whether machines think but whether men do.B. F. Skinner, psychologist, 1904–1990

The following payment mediums are in common use in BRT systems around the world:

  • Coins;
  • Tokens;
  • Paper tickets;
  • Magnetic-strip cards;
  • Smart cards.

No one solution is inherently correct. The choice of fare collection system often involves a trade-offs among costs, simplicity, cultural conditions, and service features. The selection of an appropriate fare collection medium is generally guided by the following goals:

  • Minimize the time a passenger spends in purchasing tickets and entering the public transport system;
  • Make the overall fare collection process simple and easy to understand;
  • Minimize human interference in order to reduce the possibility of revenue leakage and fraud;
  • Minimize the cost of fare collection;
  • Generate financial and travel data for use in system monitoring;
  • Respond dynamically to changes in fare policies and service plans.

Two decades ago, printed paper tickets were the only economically and technologically viable fare collection system in public transport systems around the world. But with the advent of electronic fare collection systems, the scenario has changed. Across the globe, most BRT systems have adopted contactless smart cards as the preferred payment medium. This technology has become popular because it is relatively inexpensive both in terms of upfront investment and in recurring maintenance costs, while providing numerous operational features.

Mechanical coin and token-based systems are among the simplest technologies available to handle fare collection and fare verification. These systems can be quite robust and economical to operate. New York City’s public transport system worked on a token-based system for more than a hundred years.

The number of sales personnel can be reduced and ticketing machines are not necessary with coin-based systems because the customer does not need to go through the cumbersome process of programming the electronic card. Instead, the currency acts directly as the fare payment and verification mechanism. There is no need to issue any paper tickets to customers. Also, there is typically no queue at the exit side of the trip, either. Thus, while other systems may involve at least three separate customer queues (purchase fare, verify fare at entrance, and verify fare at exit), coin-based systems require the customer to only enter one queue (verify fare at entrance). However, once a ticket is purchased, contactless cards tend to have higher throughput at the turnstile; coin-based systems will likely move only eight to twelve passengers per minute, versus fifteen to twenty passengers per minute with contactless cards.

In Quito, Ecuador, a simple coin-based system has worked successfully for both the city’s Trolebús and Ecovía lines. The system thus avoids the need to purchase any payment medium whatsoever. In Quito, an attendant window does exist, but it is only to give change to those who require it. Upon exiting a system, passengers simply file through one-way exit doors without the need for further fare verification. Quito’s system also allows the flexibility to utilize discount fare cards as well; these fare cards are based on magnetic-strip technology. However, the entire turnstile device can fit into a limited space, and thus permits two turnstiles within a relatively narrow station.

Naturally, coin-based systems depend on the availability of coins in the local currency. Further, the coins must be available in a combination that matches the desired fare level. If coins are not part of the local currency, then tokens are an option. However, the inclusion of tokens in the fare collection system defeats many of the benefits of coins. While still providing a relatively simple fare system, tokens require all customers to purchase from a machine or sales point. This activity increases the amount of customer queuing required to use the system. Another alternative is to utilize fare collection turnstiles that handle paper currency. However, this technology is not nearly as robust as coin readers. The extra moments required for authenticating the currency note will slow down the entry process and thus reduce system capacity. This problem is exacerbated by the poor quality of older currency notes.

But there are some limitations to this simple system. Coin-based systems are only usable with flat-fare structures, and cannot offer multi-trip discounts, time of day discounts, or free transfers to other modes without physical integration facilities. Of course, there are many conditions where a flat fare is desirable, as discussed in Chapter 15: Fare Policy and Structure. Also, by combining a coin-based system with another technology (such as magnetic-strip cards or smart cards), then multiple-trip fares are also possible.

Coin and token systems are subject to the illegal use of slugs and counterfeit coins. The handling and administrative requirements related to coin collection and transaction accounting are also more labor intensive.

Printed paper tickets were previously a prime method of fare collection in public transport systems. Under most paper-based systems, preprinted tickets are issued to passengers against a cash payment of the fare. In many European public transport systems, paper tickets are sold off-board at vending booths, machines, kiosks, and other shops. The tickets are validated at the time of boarding by inserting the paper ticket into a stamping machine. This machine marks the time and sometimes the location of the validation. The validation process employed is important when paper systems have time limits on usage. Verification of paper tickets can take place manually upon entrance into the system, or may only be verified occasionally through random inspections.

In many public transport systems in Asia and Africa, a conductor inside the vehicle issues tickets. Often in such systems, the conductor manually issues and punches the tickets. Alternately, the tickets may be printed using a handheld ticketing machine; the conductor enters the codes of origin and destination on the numeric keypad of the machine and the ticket is printed using thermal paper. The continuous presence of a conductor helps ensure that all passengers are carrying valid tickets.

Paper tickets suffer from several drawbacks that limit their effectiveness in high demand rapid transit systems:

  • For proof-of-payment systems without conductors, periodic checks are required on a frequent basis to ensure that passengers buy tickets. Such checks are difficult during peak periods when fare collection is highest;
  • In the case of tickets issued on board by a conductor, the process of issuing tickets is onerous and inconvenient for passengers, especially on crowded buses;
  • The likelihood of revenue leakage is high if the public transport agency does not record passenger and revenue data on a regular basis. There are numerous possibilities for fraud, such as the printing of fake tickets or the failure to issue official tickets to all passengers;
  • The agency must digitize any manual records generated at points of sale and from conductors into electronic records in order to carry out any kind of statistical analysis;
  • The system will have no record about who travelled with that ticket when the trip ends;
  • Battery-operated paper ticketing machines require charging every day.

As a result of these drawbacks, paper tickets are rarely used on modern BRT systems. Agencies have turned to more robust fare collection media such as RFID smart cards (see below).

Fig. 18.3 All-purpose bus fare collection machine in Nagoya, Japan.

Magnetic-strip cards were the first widely adopted form of automated fare collection to be used on many public transport systems around the world. Magnetic fare cards use the same technology found in consumer credit cards. Magnetic-strip cards can implement complex algorithms—including multiple trips and varying fare rates for different types of trips—and store data securely. They allow both read and write operations, and data from the verification turnstile can provide system operators with information on customer movements. In this way, they represent a major advance over paper-based systems. Magnetic-strip technology also has the advantage of the low cost of the fare cards themselves, about US$0.02–0.05 per card. However, the magnetic-strip technology requires the card to come into extremely close contact with the card reader. Most systems require the user to feed the card into a slot. The card is then ejected for the user to retrieve. When the user removes the card, the turnstile opens. The extra time taken to process the card increases the boarding delay. In addition, magnetic-strip cards are generally made of coated paper, and can be damaged relatively easily. Some system providers utilizing magnetic-strip cards also elect to permit discounted fares for individuals purchasing multiple trips.

Smart cards are based on a microprocessor that can read and process a variety of information regarding cash inputs, travel, and system usage with the highest possible security level. Smart cards are capable of supporting complex fare policies and can facilitate integration among multiple public transport modes. Smart cards rely on radio frequency identification (RFID) that activates a turnstile when held in proximity to the reader, an act that generally requires less physical precision than swiping or inserting a magnetic-strip card. Smart cards permit a wide range of information to be collected on customer movements, which ultimately can assist in system development and revenue distribution. BRT systems in Bogotá, Colombia; Goiânia, Brazil; and Guayaquil, Ecuador, have successfully employed smart card technologies.

Contactless smart cards have embedded dynamic logic that enables the implementation of complex fare rules, including transfer discounts during specific time windows, discounted off-peak fares, and distance-based fares. Other payment media lack the dynamic logic necessary to carry out such operations. Smart cards also have a longer life cycle and are less likely to experience a loss of data when compared to magnetic-strip cards. Smart-card-based systems can also incorporate solutions for single-journey tickets such as RFID tokens. A passenger taps a token when entering the system and deposits it in a turnstile when leaving the system.

The main drawbacks of smart card technology are the relative cost of the card and its complexity. The system requires fare vending personnel and/or card vending machines. The system also typically requires verification machines at system exits if distance-based fares are utilized. In each instance, the risk of long customer queues, especially during peak periods, is increased at the point of sale but reduced at the turnstile. In addition to the costs of the vending and verification machines, each smart card is a relatively costly expense. Current prices are in the range of one to three US dollars per card. The card cost depends on the card complexity.

Virtually all smart cards conform to the ISO 7816 size standard. The card material can vary with options such as PVC, PET, and even paper. Different manufacturers have developed their proprietary protocols and operating systems that define the security and compatibility between cards and reading devices. The most common standard is defined in the ISO 14443 A/B standard, which details the card characteristics.

The microchip on a smart card can either be “memory only” or “memory with microprocessing” capabilities. Cards with a memory chip can only store data, and have pre-defined dedicated processing capabilities. The addition of microprocessing allows the smart card to actually execute applications as well. For example, a microprocessor chip can allow the stored value of the smart card to be used for purchases outside the public transport system.

In Hong Kong, the Octopus card permits users to make purchases at shops as well as pay for public transport. The Octopus card allows up to HK$1,000 (US$125) of stored value to be placed on the card. While this feature can be quite convenient, smart cards with microprocessing capabilities tend to be more expensive than other types of cards. However, for systems such as Hong Kong, the flexibility and utility of the cards make them a worthwhile investment. There are currently an estimated 26 million Octopus cards in circulation in Hong Kong. Approximately 13 million transactions take place in Hong Kong each day using the Octopus card.

Once a card brand such as the Octopus is established, its ability to penetrate into a wide variety of related markets is significant. Octopus started with a core network of transport services in 1997, and soon expanded into almost all forms of transport payment services.

Likewise, the Octopus card is finding utility in several applications outside the transport sector. Some of these outside payment applications include supermarkets, convenience stores, fast food franchises, vending machines, photocopiers, cinemas, and sports venues. The flexibility of such cards means that the system’s marketplace and potential for profit can extend well beyond the transport sector. Such market diversity can help strengthen overall company performance.

The Seoul, South Korea, T-money system is in many ways quite similar in performance to the Octopus card. T-money can be used both on the city’s metro system as well as other transport services such as the BRT system. Likewise, T-money is crossing over into many non-transport applications, such as retail purchases. The fare card systems in Hong Kong and Seoul are also showing much creativity in the form of the cards themselves. Both cities allow customers to accessorize with fare chips that are inserted in a range of products such as watches and key chains. Also, in the future it is likely that customers will be able to swipe their mobile telephones in order to make payments.

Typically smart cards for transport applications have from one to four kilobytes of memory. A four-kilobyte card will be able to support multiple applications, including e-money transactions.

Unlike magnetic-strip cards, though, smart cards have a long life and can be reused for periods in the range of five to ten years. As smart cards become more common, the cost of the cards will undoubtedly continue to fall.

Fig. 18.4 A fare collection machine in Chengdu, China, that accepts tokens and smart cards.

From a financial point of view, although smart cards have a relatively high initial cost (one to three US dollars per card), the cost per transaction is significantly less than that of magnetic-strip cards. Some system designers estimate that maintenance costs for contactless smart card equipment are between 7 to 10 percent of the initial investment, compared with 15 to 20 percent for magnetic-strip systems.

Besides the cost of the cards, the chief disadvantage of smart cards is the relative complexity of the implementation. In the case of TransJakarta, the BRT system operated for more than one year before the smart card system could actually function. Implementing a smart card system is an order of magnitude more difficult than many other payment mediums. Smart-card systems are not yet in the category of a “plug-and-play” technology, as much software programming and specialized skills must accompany the implementation.

Several emerging technologies offer the promise of simplifying fare collection in the future. One such technology is near field communication (NFC), a short-range wireless technology used in mobile phones. This technology, covered under the ISO 14433 standard, allows a smartphone to function similarly to an RFID smart card in conjunction with contactless readers at station turnstiles. It offers great flexibility, since the money pocket can be added to in several ways, including SMS or internet. An example of an NFC solution is the Google Wallet, an application that can store credit and debit account information securely on a phone, and then use the NFC capability to pay at enabled payment readers. At present, the biggest obstacle to more widespread use of NFC is the limited availability of NFC-ready phones, especially in developing countries. However, with increasing market penetration of smartphones, this technology may become viable for transport applications in the near future.