advances in modern fare collection

Advances in modern fare collection

BUSRIDE | TRAPEZE GROUP2 busride.com

About Trapeze Group 3

Building the foundation for modern fare collection 4By Floyd Diaz

Simplifying the complex revenue management landscape 5By Floyd Diaz

Security and evasion control 6By David Kachemov

New advances optimize farebox efficiency, maintenance 7By Floyd Diaz

Account-based systems pave the way for open payments 8By Floyd Diaz

5 benefits of contactless smart cards over magnetics 9By Floyd Diaz

Table of Contents

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ABOUT TRAPEZE GROUP

We create, deliver and support software solutions and services that make it easier for transportation agencies to manage their complex, day-to-day business operations. We have the unique ability to partner with you for the full 360 degrees of your operations due to our focus on serving the transportation industry with a broad product portfolio.

From the bus stop to the finance department, Trapeze technology is the glue that binds a transportation agency together. We are dedicated to helping you streamline and integrate your many day to day functions. Enabling you to focus on your #1 goal, providing amazing customer service!

Our team gets what you do. They reason why? Is because they have been in your shoes! Many Trapeze employees have been in the transportation business for decades! They know what your pain points are and are passionate about helping you eliminate them and meet your goals, as well as those of your board members.

With our passion and knowledge, we are excited to partner with you to maximize the value of your systems for the long term.

TRAPEZE PARTNER PROGRAMTrapeze works with a number of industry vendors in order to

help ensure our customers systems work together to deliver scalable, long-term, flexible solutions.

These partnerships are designed to enable an agency’s systems to maintain their integrity while providing optimal performance. At Trapeze, we build long-term, trust-based relationships with select companies. This approach provides a greater opportunity for our partners and better serves our customers.

For more information on being a partner contact us at [email protected]

Our passion is enabling you to meet your goals.

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F O C U S O N : F A R E C O L L E C T I O N

Building the foundation for modern fare collection

Transit customers are demanding a greater choice of payment options, fare media and purchasing channels, while at the same time requiring a user friendly and simple process, no matter the transaction type. This presents a number of challenges to transit agencies planning fare collection strategies for the future — especially as they factor in the wide range of solution options and equipment, and the number of vendors in the marketplace. Any solution design must also consider transitioning legacy systems in the challenge to determine exactly where to start.

The most straightforward approach to this challenge would be to enlist the help of a system solution provider to offer a complete fare collection package. From cash collection through to account-based smart and digital passes, the optimum system must have the underpinning of an extensive back office that provides a unified view and meets the transit agency’s fare policies and business reporting needs. Implementing a market-leading, agile system lessens many of the integration challenges so agencies can readily embrace today’s technologies, and maintain the firm foundation necessary for meeting the requirements of the future.

For most, the road to a modern fare collection system entails a more gradual and transformational approach, integrating legacy systems with some newer technologies. An example of this approach

By Floyd Diaz

Above: TVMs like this one from Trapeze Group mirror the user experience of a smartphone.

“The road to a modern fare collection system

entails a more gradual and transformational approach…”

to future faring would be upgrading an agency’s Ticket Vending Machine (TVM).

The latest TVM technology, such as Trapeze has developed and built in its AFC production center exclusively for the North American market, focuses extensively a simple-yet-premium customer experience. The user experience mirrors how riders use their smartphones and the TVM has the aesthetic appeal that is synonymous with today’s technology. This particular TVM brings together all modern cash management features such as bill/coin validation and recycling, secure contact and contactless PCI & EMV card processing, with card-based and account- based smart card processing — representing an integrated way to meet ADA requirements. Where legacy systems may still be in operation the new TVM also supports mag-stripe where appropriate. The Trapeze TVM is part of a faring solution that is supported by a comprehensive revenue management back office, designed to seamlessly integrate with a range of legacy, current and future transit technologies.

Regardless of what stage an agency is at in the overall transformational process, introducing this type of product to its paying customers clearly demonstrates the look of future of faring, while deriving real-time benefit for today’s business. It is also worth noting that a scalable back office is available to support myriad new payment standards, requirements and technologies that are transforming the payment landscape.

This strategic first step solidly anchors the foundation for a modern, fully integrated faring system. Once this foundation is built, the transit agency can better position itself to move ahead on the strategic front best determined to suit business needs.

Floyd Diaz serves as director of automatic fare collection, Trapeze Group, Mississauga, ON, Canada. Visit the company online at www.trapezegroup.com

http://www.trapezegroup.com


In 2015, transit managers can walk into the office and have the total revenue generated for all transit activities over the last 24 hours on display to greet them. They have instant access to the details that make up that number; by pass type, by sales channel, by customer. They are able to see the status of all revenue equipment deployed for service. For many agencies with the latest in fare technology, this is today’s reality. Yet for some agencies, this seems like an impossible dream.

The primary focus of each transit agency is ensuring their riders get where they need to be. It can be a challenge to embrace modern trends in payment technologies and revenue collection systems. Solution partners like Trapeze work with agencies to lessen these challenges. This partnering approach allows agencies to continue to focus on what’s important - their riders.

The first step is to start the migration from simple cash-oriented, paper-based ticketing/pass systems. Often a gradual process, agencies adopt smartcard and mobile options piecemeal as they emerge. New payment methods also increase demand for multifunctional fareboxes, ticket vending machines (TVMs), and Mobile Ticketing Apps. For riders, the fare payment process is becoming ever more convenient. For agencies, however, the revenue management landscape is growing to be quite complex.

Adding to the challenge are vendor-locked systems that do not integrate well with other revenue solutions. The implementation of these systems creates new complexities for the agency. Realizing these challenges, solution partners like Trapeze have created solutions that embrace new technologies. With an open approach, Trapeze works with many vendors to make the faring evolution easier for agencies.

A key foundation to this new era of revenue collection is the Central System software. Agencies lose efficiency when they need to pull data from across a variety of disparate systems. Add to that the hours spent configuring spreadsheets and other tools for system views and performance data. Obtaining the performance data needed to manage the agency’s business should be a fast and simple process. Trapeze has found an easier way for agencies to get the most from their revenue collection systems: a single platform that underpins all the elements of an agency’s revenue ecosystem, whether an agency has a single vendor for these elements or has many vendors for their various system components.

This centralized solution allows agencies to manage all elements of their fare collection system. Managers can see graphic views of operating TVMs or fareboxes and, at a glance, assess their status. This gives them quick insight on in-service equipment, inventory levels, vault status etc.

There are many advantages that a Central System provides. Managers can make instant changes across their entire fleet.

By Floyd Diaz

They can make simple software updates and solve challenges with individual equipment items. A range of reports and dashboards support revenue management reporting and reconciliation. Easy access to rider behavior allows agencies to predict needs and optimize their service.

Integrating with supporting transit partners and fellow agencies is now an achievable goal. In the past, several factors that made it difficult to establish cross-agency relationships, central clearing, settlement and revenue allocation to name a few. With a centralized approach to revenue management, these factors evolve from challenges to opportunities.

A clear example of these transformations has been the evolution of the Ticket Vending Machine. Trapeze has brought the latest in TVM technology design and functionality to its customers. Building on core foundations of security and efficiency, the TVM embraces consumer engagement trends like sleek design, gesture control and screen manipulation. This TVM embraces what we’ve learned over the years about how best to handle cash. Building on this, it encompasses new card-based options and is NFC capable for mobile payment - all in a user-friendly, easy to navigate, ADA-compliant form.

A robust Central System works with the Trapeze TVM to deliver an exceptional customer experience. With such advanced feature sets, it is critical that the agency has the means necessary to track and keep them up to date. This way, the agency is always communicating fresh information through the consumer engagement screens. Monitoring maintenance elements is also easier through a centralized system. Teams can issue alerts and avoid system interruptions in a fast and effective manner.

For years, the dream has been out of reach for transit agencies as they struggle to find the means to navigate this new landscape. But with a Central System and a new approach to partner solution delivery, the dream is very much a reality.

Floyd Diaz serves as director of automatic fare collection, Trapeze Group, Mississauga, ON, Canada. Visit the company online at www.trapezegroup.com. Get the full story by reading Trapeze Group’s eBook at www.busride.com/ebooks.


The best fare solutions encompass new card-based options and are NFC capable for mobile payments.

Simplifying the complex fare revenue management landscape


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Security and evasion controlBy David Kachemov

The credit card security breaches that have occurred at several large retailers over the last few years will soon result in significant changes to the way electronic payments of all types are managed and processed.

This broader technical evolution will most certainly influence the way that public transit agencies handle fare collection, whether it’s on-board a bus, via Point of Sales (POS) devices, or at Ticket Vending Machines (TVMs).

One emerging trend in fare collection that you must be aware of involves chip and PIN credit cards that meet European MasterCard Visa (EMV) standards. Going forward, banks may take the position of passing on the responsibility for credit card fraud to any vendor that operates using the less secure magnetic strip approach, currently the technical standard throughout the United States.

This, in turn, creates another challenge for many US transit agencies: transitioning from closed loop smartcard systems to real-time account-based operations powered by 4G LTE communications.

The transition to EMV-styled chip and PIN systems, which have been in operation in Canada and Europe for about a year, will begin in the United States in October 2015. This change is going to impact every transit agency with POS systems.

So, the simple guidance is: stay away from magnetics. If you already have them in place, you need to create a transition plan to move your payments collection and security forward. Net-net, magnetics is a sunset technology due to its high maintenance costs and poor security features.

Most agencies will also need to evolve their evasion control measures by utilizing on-board electronics to assure fare validity for both fixed route and paratransit operations. On-board validators that can read bar codes, QR and smart card/NFC, and provide audio-visual feedback to the patron and bus operator, are particularly effective.

Knowing all of this, it is recommended that all agencies considering a fare collection system procurement or upgrade seriously contemplate a smart card based e-payment component that offers hybrid functionality (e.g. closed loop and account based capabilities), and augment this with a mobile ticketing solution.

The rationale for hybrid is to ensure that security checks on payment media can be done when out of cellular coverage range, while still maintaining control over efficient passenger boarding times.

By implementing real-time, account-based systems that integrate evolved fare collection methods with modern security controls, transit agencies of all sizes will position themselves to add open payments solutions at a fraction of the cost of replacing closed-loop magnetic systems. Companies such as Trapeze Group have proven solutions for this hybrid approach.

Once deployed, these solutions will provide the basis for improved operational efficiency, greater fare evasion controls and a modern, scalable passenger payments experience.

David Kachemov serves as vice president, ITS/AFC operations and development, for Trapeze Group. Visit Trapeze Group online at www.trapezegroup.com. Get the full story at www.busride.com/ebooks.

A broad technical evolution will influence the way that transit agencies handle fare collection, whether it’s on-board a bus, via Point of Sale devices, or at Ticket Vend-ing Machines (TVMs).





New advances optimize farebox efficiency, maintenanceBy Floyd Diaz

The continuing evolution of new payments technologies, and the potential passenger benefits and operational efficiencies that they offer, continues to drive transit agencies of all stripes to adapt their onboard and back office capabilities in order to meet future demands.

Fareboxes, once used only to accept bills and coins must now provide support for several payment mediums, including cash, credit cards, QR codes from smartphone screens and even more recently, contactless smart cards. From an operations standpoint, it makes sense for agencies to not only enable digital technologies, but to incentivize passengers to use them, as doing so improves onboard efficiency and creates a wealth of information, including stop-level data, that is of tremendous value in operations and planning.

It was with an eye to these developing market opportunities that the Trapeze Group acquired the assets of Fare Logistics in May 2014. Since that time, we’ve been working to integrate the EZFarebox solution, as it’s now called, with other onboard and back office technology, most notably the driver’s ITS (Intelligent Transportation Systems) console, in order to amalgamate and enhance operational utility, as well as decrease the need for preventative maintenance.

What does it mean?The old interface has been replaced with a full-color 10.2 inch

touchscreen that’s much easier to read and interact with, and is notably low maintenance. Integrating the two pieces of hardware has created more room for the driver to operate in, providing some nice ergonomic benefits, and the box has a new capability to automatically collect, transmit and visualize stop-level data, with upgraded reporting options.

The integrated EZFarebox/ITS console automatically switches modes based on operation status. So, when the bus is moving, the ITS screens are up, and when passengers are boarding, the system switches into fare collection screens, providing a quick reference for drivers while simultaneously reducing their workload to accept cash fares. Both the driver and passenger interfaces are completely customizable. Of course, the amalgamated EZFarebox system accepts cash and all the relevant forms of digital payments, including credit cards, contactless smart cards and QR codes. The system will also support custom options, such as machine readable student cards, for payment.

Efficient data transmission is handled over industry standard Wi-Fi with support for GPS and a cellular data modem. The solution also includes intelligent vaulting for data storage. Perhaps the most exciting updates, though, have to do with some new reporting options, which include a series of standard and customizable reports that deliver granular stop-level data, all displayed with rich visualization characteristics to help make it easier to spot trends and identify opportunities.

Charlottesville Area TransitCharlottesville Area Transit (CAT) is the provider of mass

transportation in Albemarle County, VA. The agency provides service on 11 routes, including a shuttle route using trolley-style buses that connects downtown with the University of Virginia, home to more than 21,000 full and part time students.

Until recently, CAT was dealing with legacy fare boxes nearing their end of life that supported only basic pay options. CAT’s objectives were to upgrade to a state-of-the-art fare collection system that could support a custom payment option for university students and provide detailed, stop-level data to operations.

Working with the Trapeze Group, CAT installed the EZFarebox hardware on their buses. The new system automatically validates cash payments, reducing demand on drivers. The EZFareboxes also read the barcoded student IDs – both academic passes as well as hospital IDs - from the University of Virginia. This allows electronic boarding information to be captured automatically as the students scan their cards, eliminating the need for drivers to visually verify and record the data. No updates to the student passes were needed for this enhancement. CAT also enjoys enhanced stop-level data, down to knowing the exact payment type, amount and frequency of each payment method, at each route stop.

The new solution went live just before classes commenced for Fall of 2015 and the results were immediate. The new system and relief from validating cash fares has created happier, more efficient drivers. Passengers enjoy fast, easy-to-use, modern payment methods, and data is quickly captured, transmitted and visualized for operational review. Furthermore, the need for preventative maintenance, or maintenance of any kind, is minimal.

It’s still early days yet for EZFarebox and automated fare box technologies on the whole, but the early returns on operational efficiency and improved passenger experience provide much optimism for the future.

Floyd Diaz serves as director of automatic fare collection, Trapeze Group, Mississauga, ON, Canada. Visit the company online at www.trapezegroup.com. Get the full story by reading Trapeze Group’s eBook at www.busride.com/ebooks.

Modern fareboxes accept cash, credit cards, QR codes from smartphone screens and even more recently, contactless smart cards.





Account-based systems for fare collection - including mobile ticketing - are gaining in popularity.

Account-based systems pave the way for open paymentsUsing bank cards, non-proprietary devices and the acceptance of mobile wallets are key to the future of fare collection

By Floyd Diaz

As more and better wireless technologies for public transit are developed and agencies’ competencies and commitment to integrating mobile data evolve, account-based systems for fare collection - both smart card and mobile ticketing - are gaining in popularity, and with good reason.

Account-based systems offer several clear advantages to agencies, which want to create more efficient and secure payment systems, and to increasingly mobile-savvy passengers, who are demanding more flexible fare and payment options. With open payments, riders can also use their credit or debit card to pay for their trip adding an extra level of convenience.

At the same time, the business opportunities of open payments systems, such as the digital wallet solutions recently introduced by Apple, Samsung and a number of others, are creating the perfect environment for open payments to become the de facto standard for accepting payment in public transit and everywhere else.

Since July of 2014, Apple, Google, PayPal, Amazon, Samsung and others have all launched open payment solutions of their own. Revenue from mobile payments solutions in the U.S. and EU is growing at a staggering 42 percent per year – on track to total more than $90 billion in 2016.

According to a recent VentureBeat article, secure open payments via mobile now account for 7 percent of all e-commerce sales, a sevenfold increase since 2010, and will rise to more than 50 percent in the next three years – meaning revenue from open mobile payments systems will, by 2018, account for more than half of the world’s digital revenue.

Many of the benefits of an account-based system, and the ability to capture and use data from wireless techs, have direct application to the future of open payments, including:• Flexible fare options including customer retention loyalty programs and capped

fares. Keeping existing passengers is just as important as attracting new ones. By creating partnerships with local business owners who offer discounts and other special considerations to public transit passengers, agencies help to foster a more positive experience for passengers, while also strengthening ties to local business owners. In a similar vein, capped fares are popular with passengers because they allow for flexible use of transit services for a fixed fee. This allows the passenger to travel throughout a day, or week, without the requirement to buy extra tickets, or worry about spending more than they need to, always knowing that they are going to get the best possible fare. The simplicity of these types of transactions and the opportunity to learn from the business intelligence (BI) data they produce is of great value in developing ideal open payments solutions.

• Commercial rules are consolidated in the back office. By consolidating fare rules in the back office environment and fulfilling transactions

from account-based systems automatically, the burden on vehicle operators and others who collect fares from passengers (e.g. ticket window staff) are reduced. More importantly, the need to warehouse data for long periods of time is mitigated and front office staff are allowed a window into real-time fare collection data - a critical step for implementing advanced BI solutions down the road and providing riders their rewards and benefits immediately. Open payment systems in transit will build from this BI to create new fare offerings based on a passenger’s travel data as it relates to different modes, routes, schedules and contextual circumstances.

• The devices required are non-proprietary and ubiquitous. By moving away from a walled-garden approach to collecting, integrating and sharing data across the enterprise, the agency benefits in several ways: First, by increasing interoperability across different intelligent transit systems (both in-house and third party); Second, by reducing the expense of provisioning fare collection (non-proprietary devices are uniformly less expensive to implement and easier to maintain than proprietary solutions), and finally by leveraging the smartphones and other mobile devices that most passengers now have, to allow them to discover, query, select and pay for fares in a manner with which they are very familiar.This last point, connecting via mobile technologies and experiences

that the passenger understands and feels comfortable using, is essential to understand because the frequency, volume and value of open payment methods are skyrocketing.

Surely, this extraordinary shift in how consumers want to pay for things will manifest itself in the public transit industry as well.

Account-based systems for fare collection are a crucial step in allowing public transit agencies to scale their operations in order to accept open payments. This is a critical time for agencies to evolve their fare collection solutions in advance of a time, coming very soon, when support for passenger’s mobility and digital wallets move from “nice to have” fare collection solutions to the preferred form of digital payments worldwide.

Floyd Diaz is director of Automatic Fare Collection at Trapeze Group, where he is responsible for developing long term strategic initiatives that will facilitate Trapeze’s market growth in the Automatic Fare Collection (AFC) domain. Visit www.trapezegroup.com.




5 benefits of contactless smart cards over magneticsBy Floyd Diaz

For the purposes of fare payment in public transit, contactless smartcards are a clearly superior technology to magnetic stripe cards.

As far back as 2008, the U.S. Federal Transit Administration (FTA), via the Transit Cooperative Research Program, had identified the advantages of contactless systems over all other forms of payment, with smart cards out-performing magnetics in terms of reliability, convenience, security, speed of use, fraud risk management and lowering operating costs.

Don’t let the sluggish adoption of smart card technologies in North America fool you. That reticence is based more on an attempt to leverage legacy investments than any objective analysis of the merits of contactless systems. Contactless smart cards will become the standard because they are simply a better option for passengers and agencies alike – especially as transit agencies adopt account-based payment systems.

Here are five clear benefits of contactless smart cards over magnetics in a modern transit agency environment.

1. Smart cards are more secure.Compared to magnetics, smart cards offer more storage and secure

reading and writing of data thanks to a number of encryption algorithms and electronic keys. In transit, there are numerous examples of fraud with magnetic cards based on the poor security of the technology. Contactless smart card technology has been deployed at some of the largest transit agencies internationally and in the U.S. with virtually no cases of fraud based on the technology.

There are also inherent behavioral safeguards to contactless systems, as the Federal Reserve Bank of Boston pointed out in an Emerging Payment Industry Briefing, “Active participation of the cardholder is required to perform a transaction. The payment device never leaves the consumer’s hand; and the distance factor of 4 inches between the reader and the RFID chip makes unauthorized scanning for customer data more difficult.”

Contactless smart cards, which feature on-board microprocessors, are difficult to hack, replicate or counterfeit. By comparison, replicating a magnetic stripe card is easy and inexpensive. So, an investment in a contactless smart card system is also an investment in fraud prevention that will yield immediately measurable ROI.

2. Smart cards are more reliable and reduce maintenance costs.Those preoccupied with the expense of transitioning from magnetics

should consider the long term. The maintenance savings alone of eliminating magnetic stripe tickets will more than offset the cost of switching to contactless smart cards.

For one, smart cards are more reliable and durable with a failure rate of one in 25,000 transactions compared to one in 5,000 for magnetic stripe cards, according to IBM. Secondly, contactless validators have no mechanical parts, thereby reducing maintenance costs for both parts and labor. Finally, contactless smart cards are sturdy and waterproof, requiring fewer replacements than magnetic stripe cards that are easily damaged by magnetic fields, moisture or normal wear and tear.

3. Smart cards are faster and easier to use.Smart cards can perform complicated transactions in very little

time, automatically allocating charges for each stage or mode of travel. In conjunction with the ability to recharge via web or mobile, this improves passenger experience and provides ease of use.

As to speed: A typical contactless smart card transaction takes about 300 milliseconds - there’s no need to fumble through a wallet or purse, feed tickets into machines, or navigate a turnstile. Improving experience and getting more passengers boarded faster means increased operational efficiencies, greater on-time bus performance and lower total cost of provisioning the service.

4. Smart cards lower operating costs and reduce losses from fare evasion.Yes, deploying a contactless smart card system is an investment,

but it’s a good investment. As noted above, reduced expense in maintenance costs more than make up for the upfront expense. And, although producing magnetic stripe cards is less expensive, contactless smart cards are still less costly overall because of the lower equipment costs and usable life of the smart card.

5. Smart cards have great BI benefits.By creating a repository for contactless smart card data and linking

it to other databases and systems across the transit enterprise, the agency creates a powerful business intelligence (BI) engine for route planning, in particular.

There are also benefits to the enterprise in correlating smart card data to solutions for workforce management, KPIs in operations and enterprise asset management, and for strategic planning purposes.

This is the direction the industry is going - connecting data from smart payments systems and all across the enterprise to improve every facet of experience and operational performance.

Floyd Diaz is director of Automatic Fare Collection (AFC) at Trapeze Group, where he is responsible for developing long term strategic initiatives that will facilitate Trapeze’s market growth in the AFC domain. Visit www.trapezegroup.com.

Smart cards are more secure, more reliable, faster and easier to use than magnetic stripe cards.


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