A New Payment Option

For decades, the most common way to travel has been with a paper ticket — one that passengers use to board a train, plane or bus. However, in areas of the world like Europe, Japan, China, Australia, Venezuela, Mexico and the United States that have a higher concentration of commuters, paper tickets have gone by the wayside.

Instead, technology companies have been working with “contactless” smart card technology — a system in which the computer chip within the card communicates to the card reader through induction technology — and allows passengers to be within close proximity (up to 10 centimeters) to a card reader to complete a transaction. These cards, commonly referred to as contactless smart cards or proximity cards, are often used when transactions must be processed quickly or hands-free, such as on mass transit systems where cards can be used without removing them from a wallet or purse.

In the United States, this technology is already starting to take over the commuter experience with applications used for both transit fare payment, tolling and parking fee payment. Transit agencies are interested in this kind of technology, and many of them are now considering the use of contactless smart cards to replace the traditional magnetic card or tickets as a viable payment option. It is perceived as a secure method of user validation and fare payment and it makes the driver’s job easier, as he or she no longer has to collect and verify the fare.

Smart Card Popularity

After years of testing and applying smart cards into the everyday transit systems, the benefits to the traveler are clear for all modes of transportation. Why is this technology becoming so popular in the transit arena? First and foremost, for the passenger it is an easy-to-use convenient form of payment that is reusable and more reliable than magnetic cards. There is also no need for a customer to determine exact change or tokens; a smart card in a wallet or purse can simply be presented to a reader and the transaction is complete. Since the transaction is fast and does not require the user to insert the card into a reader, there is a reduced transaction time, which results in passengers moving faster through the system — the boarding time at a stop is reduced allowing vehicles to maintain a more consistent adherence to schedules. The added convenience of putting loyalty programs associated with the user or the card is an option of multiple applications, such as parking, E-cash or tollbooths. Customers have another advantage with the ability to retrieve their balance if the card is lost.

For transportation companies, transit authorities and other government agencies, the smart card gives added expediency if there is a transfer or an additional trip without the use of other types of media; it’s paperless and all embedded in the transaction on the card. These system qualities allow for transit agencies to not only keep track of passengers, but also to avoid the hassle of delays or traffic buildups in walkways and subway platforms. From an operation and maintenance perspective, since there are no moving parts, the contactless smart card system is inherently more reliable and easier to maintain.

As a result of the growing success of such technologies, automatic fare collection providers have grown internationally throughout Spain, China, Venezuela, Mexico and now the United States. The smart card technology uses the same hardware and all the associated software to manage the necessary systems to keep passengers moving quickly and efficiently. Information technology companies are helping transit agencies around the world become ready and able to supply and implement systems where the passenger can use a smart card as a form of payment.

Disadvantages of Magnetics