There was a lively panel session at the Transport Card Forum meeting in London recently, which I had the pleasure of moderating. I won’t name names but the panel members represented the mobile industry (an operator and the GSMA), a digital money expert, the DfT, and a consumer champion. The session was entitled: Public transport ticketing & payment on mobiles – To what extent will mobiles be used in the entire journey process, from initiation through to ticketing and payment? What will the future hold and how might it work? The audience asking the questions were largely from the Transport industry.
The central question I was trying to get the panel to address was: If I am a UK Transport operator, and I want to accept NFC phones for payment or ticketing in my network, what do I do? In other words what are the steps, who do I talk to? This is not academic – I have been talking to Transport operators which are in precisely this situation. The very fact that they are asking the question rather sets them apart, and tells me they are fairly clued up. They think it will be easy – yet they have no idea of the hurdles and stumbling blocks in front of them. They don’t know what they don’t know.
As soon as you start to drill into the detail, questions pop up. Let’s start with what kind of product an Operator might want to accept on passengers’ NFC phones. In the UK, this could be:
- An existing proprietary fare product
- ITSO Stored Travel Rights (STR)
- An ITSO ticket product
- A Contactless Payment Card (CPC) app
Taking these one by one, to offer a proprietary fare product, the Operator needs to have a suitable app developed, which passengers can download to their phones. To do this securely, and then to load value onto it over the air, it is necessary to have access to the “Secure Element” (SE) on the passenger’s phone. In most phones currently the SE is the SIM card, and is owned and controlled by the passenger’s Mobile Network Operator (MNO). So – the Operator has to get the agreement – on some commercial basis to be determined – to be given this access. In the UK there are five MNOs, so if the Operator wants to have his fare product on all his passengers’ phones, irrespective of which MNO they subscribe to, he will have to do a separate deal with each of them.
Next, ITSO STR is like an electronic purse – you add value to your phone and then spend it on any compliant ITSO reader. There are almost no such schemes in the UK currently, but this might change in the future. In any case this, and the third option of an ITSO ticket product, should be the responsibility of ITSO to present a solution. In fairness to ITSO, I believe they are stepping up to the plate on this one, but it’s still early days.
Then, if the Operator wants to accept a CPC app on a passenger’s phone, first of all the app has to get there. Currently in the UK this is only available from Barclaycard on a Samsung Tocco Lite phone on the Orange network (known as “Quick Tap”). So even though I have a long standing Barclaycard account, it’s not available to me on my beautiful Samsung Galaxy Nexus NFC phone running on O2. Expansion by Barclaycard to other phones will be measured in months and to other networks in years – and Barclaycard is the market leader!
So what is our Transport Operator to do? Say to passengers, “You can have this really cool way of paying for your bus ride – but only if you have this credit card on this phone and this network?” What kind of message does this send to his other customers, and why would he bother? No solutions to this were offered at the TCF, and I wasn’t surprised.
What there needs to be is an engagement by the mobile industry with Transport. There’s no doubt they want this, because they see Transport as the “low hanging fruit” – the “killer app” that will drive transaction volumes and get subscribers using their phones for more new functions. The GSMA has kick started this, but so far their efforts are necessarily very global. They have some way to go before they have practical advice and support on a roadmap to implementation for Transport Operators in individual countries.
The consumer champion at the TCF capped it all by questioning why any passenger would want any of this. The jury’s out…
Fenbrook Consulting advises businesses about the commercial opportunities and technical requirements of Near Field Communications and Smart Ticketing