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EMTA Working Group On NFC Ticketing - Barcelona Future Ticketing Plan Transport for London Charles Davie 6 th September 2012 Copyright © 2011 Transport.

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Presentation on theme: "EMTA Working Group On NFC Ticketing - Barcelona Future Ticketing Plan Transport for London Charles Davie 6 th September 2012 Copyright © 2011 Transport."— Presentation transcript:

1 EMTA Working Group On NFC Ticketing - Barcelona Future Ticketing Plan Transport for London Charles Davie 6 th September 2012 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

2 London 2012 Olympics: TfL & NFC 1 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

3 Visa & Samsung – London 2012 NFC App 2 The London 2012 Olympic & Paralympic Games have been used by Visa to showcase contactless and mobile payment technology to the world. Visa has been using contactless technology to help make the Olympic experience fast, easy and secure and to showcase the technology’s potential. Across the Games venues, Visa delivered a dedicated Point of Sale (POS) network with more than 3,000 contactless and electronic payment cards terminals. Mobile contactless payments were showcased through a number of Visa payments- enabled Samsung Galaxy S3 phones allowing the recipients to make contactless payments at contactless retailers, including those across the Olympic venues. Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

4 Visa & Samsung – London 2012 NFC App 3 We are not yet living in a contactless world, but the momentum is growing: The Olympics is an accelerant for usage as well as a showcase for the future – “we want people to get used to the contactless experience.” There are 39.1 million contactless Visa cards across Europe with over 378,000 contactless terminals. 24 million of these cards and 140,000 contactless terminals are in the UK. By the end of 2012 there will be 50 million contactless Visa cards in circulation across Europe, 30 million of which will be in the UK. Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

5 Success of NFC at the Olympics? 4 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

6 Oyster Today Complete multi-operator, multi-mode smart integrated ticketing system 50m cards produced Accepted on all TfL & TOC rail services & all bus services within London Used for 83% of all trips – main non-Oyster usage is TOC-retailed Travelcards from outside London 5 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

7 Big picture – where we have got to Contactless smart ticketing has delivered the business case – High gate throughput prevents bottlenecks constraining ridership growth on rail – Fast boarding time minimises bus fleet sizes and drives up appeal of bus vs. car – Fraud has been hammered But Oyster has issues: – Expense is uncomfortably high given TfL’s need to reduce operating expenditure – Customer experience is far from perfect Could we do this even better? 6 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

8 Oyster isn’t the perfect offering for these customers – some things could be better ISO14443 standard contactless – fast & intuitive Pay As You Go travel with daily capping – intuitive product that eliminates deliberate ticket purchase as a barrier to travel & drives up ridership Data stored on the card – makes it difficult to accurately offer customer information online Stored value purse on card – “non-commuters” have to invest time in managing PAYG balances (same applies to weekly season ticket expiry dates) Oyster is London-specific – many visitors don’t have it 7 Keep Change Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

9 Managing e-purses = changing currency at the border 8 Welcome to London! – Eurostar passengers switching to the Underground at St Pancras Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

10 There is a credible contactless alternative emerging in the UK payments market Use ISO14443 standards Funds held in current or credit account, not on card Source of most customers’ funds, so no need for pre- loading Available UK-wide & internationally 9 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

11 But fare collection is different from retail payments – can PAYG be made to work? Canary Wharf 25k people per hour @ <0.5 seconds each 10 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

12 But the industry’s CP transaction rules won’t work for urban transport fare collection 11 General CP rulesChallenges implicit in transport PAYG Price is known before the card is presented Price not known until rail journey is completed (or end-of-day if capped) Use of card counters to manage risk & occasionally fall-forward to Chip & PIN Throughput needs set maximum acceptable transaction time of 500ms No PIN pads on transit infrastructure Terminal field is activated manually by store staff Neither staff nor time to manually activate terminal field for each customer Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

13 Happily, the UK banks have developed a new transport transaction model 12 General CP rulesAgreed new rules for transport PAYG Price is known before the card is presented Each tap is £0, then operator back- office calculates price at end of day Use of card counters to manage risk & occasionally fall-forward to Chip & PIN Operator manages risks to provide equivalent protection within the 500ms time limit: Offline data authentication of card Deny Lists (DLs) in terminals Online auths from the back-office Terminal field is activated manually by store staff Terminal field is always active to maximise throughput Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

14 This new approach is being formalised as a new set of rules for transport transactions Visa, MasterCard and American Express are creating specific rule sets for transport merchants that cover these six areas 13 Card – terminal interaction (limited to 500ms) Merchant intermediate layer processing Aggregation of journeys to daily charges Merchant Deny List (DL) processes Liabilities & frequency of authorisations Mid-journey inspections Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

15 Principles under-pinning the new transport transaction model Single model applicable for all urban transit operators Applicable to existing base of contactless cards Protect throughput of passengers at peak times Ensure issuers can earn attractive volumes of additional contactless interchange Ensure issuers take minimal additional risks Ensure that customer statements clearly show daily expenditures for each transit merchant Maximise role of transit merchants in providing customer service Maximise fare revenues received by transit operators 14 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

16 The model brings benefits for customers and transport operators Customers Save time – “currency exchange” eliminated Save time – queues reduced Save time – interoperability 15 Operators Issue fewer smartcards Pay reduced commissions Enjoy reduced customer service burden Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

17 This model eliminates the need for customer action and “currency exchange” before travel 16 StationGate-line, platform, bus Buy Oyster PAYG value using credit/debit card (CP) Tap-in using Oyster card PAYG Travel Station, retail outletGate-line, platform, bus Buy Oyster PAYG value using cash Tap-in using Oyster card PAYG Travel Bank branch, ATM, retail cash-back source Get cash from credit or debit account www.tfl.gov.ukwww.tfl.gov.uk, phoneGate-line, platform, bus Buy Oyster PAYG value using credit/debit card (CNP) Tap-in using Oyster card & collect PAYG value PAYG Travel www.tfl.gov.ukwww.tfl.gov.uk, phone Set up Oyster online account or call Oyster Helpdesk Gate-line, platform, bus Tap-in using credit/debit card PAYG Travel Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

18 Two pre-existing projects set the conditions for contactless credit & debit acceptance Replacement of 20,000 Oyster smartcard readers – Trial of 63 readers since March 2010 – 1 st production versions installed December 2010 Introduction of wireless 3G communications for Oyster on 8,500 buses – Trial on 32 buses underway 17 Specifications make these “EMV ready” Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

19 Oyster system will be enhanced to accept contactless credit & debit cards on all modes 18 + Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

20 Contactless credit & debit cards = inter-urban interoperability for PAYG fare payment Distributed by UK card issuers to customers across the country No city or regional distinctions Supported by capability for UK-wide marketing and customer education Very attractive product for business or leisure travellers visiting other UK cities on an occasional basis Importantly, requires transport operators to implement PAYG travel in a consistent manner to avoid customer confusion 19 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

21 Delivering the vision Bank card or mobile payment applications as an alternative to current bespoke ticketing technology Migration of Oyster into EMV technology Eventual elimination of the ‘currency exchange’ This needs evolution....... 20 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

22 How does NFC fit in? 21 Copyright © 2011 Transport for London. All rights reserved. This information is confidential. What problems are we trying to solve? What read speed can NFC achieve? What’s the business case for NFC outside of London? Is NFC secure enough? Can NFC solve the problem of “instant gratification”?

23 22 Where Customers Currently Top Up Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

24 23 When to top up? Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

25 Rio de Janeiro 2016 Olympics & NFC 24 Copyright © 2011 Transport for London. All rights reserved. This information is confidential.

26 Thank you for your attention Copyright © 2011 Transport for London. All rights reserved. This information is confidential.


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