National Academies Press: OpenBook

Multiagency Electronic Fare Payment Systems (2017)

Chapter: Chapter Eight - Conclusions and Suggestions for Future Research

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Page 68
Suggested Citation:"Chapter Eight - Conclusions and Suggestions for Future Research ." National Academies of Sciences, Engineering, and Medicine. 2017. Multiagency Electronic Fare Payment Systems. Washington, DC: The National Academies Press. doi: 10.17226/24733.
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Page 69
Suggested Citation:"Chapter Eight - Conclusions and Suggestions for Future Research ." National Academies of Sciences, Engineering, and Medicine. 2017. Multiagency Electronic Fare Payment Systems. Washington, DC: The National Academies Press. doi: 10.17226/24733.
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Page 69
Page 70
Suggested Citation:"Chapter Eight - Conclusions and Suggestions for Future Research ." National Academies of Sciences, Engineering, and Medicine. 2017. Multiagency Electronic Fare Payment Systems. Washington, DC: The National Academies Press. doi: 10.17226/24733.
×
Page 70

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68 Surprisingly, the use of smart cards in fare systems is not so widespread as would be expected from the early electronic fare payment studies begun from 1996. Fewer than 25 regional agencies in the United States have implemented smart cards for seamless transit travel across modes and operators. Although magnetic stripe cards are occasionally used in multimodal and multiagency environments, smart cards are the choice for most multiagency electronic fare payment systems (EFPS). The large systems, especially those where multiagency EFPS were initiated before 2012, took a significant amount of time to deploy. Based on the research, several controlling factors can be iden­ tified to explain the long duration to deploy these systems. The factors fall into one or more of five categories. (It should be noted that cost was not analyzed as part of this study.) Complex governance rules take time to craft. Governance rules, such as fare integration, financial allocation and settlement, and decision­making authority, take time to craft well. Respondents acknowl­ edged that they needed to deal with these issues before deployment. Consensus takes time. Good governance requires trust and consensus among all stakeholders. Multiagency EFPS programs that are run by consensus will enjoy stakeholder buy­in and better relationships over the long term. Many of the early systems that were led by a transit agency are now exploring how to democratize the process even more. Noting that consensus­based decision­making takes time and patience, program participants variously identified it as a challenge, a strength, or a weakness. As one respondent put it, “It’s a matter of picking your poison.” New technologies require thorough testing. New technologies require testing, even if the technol­ ogy has been deployed in another environment. The most critical deployment lesson involved testing. Respondents repeatedly stated that it was a mistake to go live before most of the “kinks” were out of the system. Projects have suffered from customer, partner agency, and political pressures when systems are pre­maturely deployed. Applying complex business rules to software takes longer. Complex business rules such as fare policies and structures tend to lengthen the time of deployment. The trend among many agencies is to simplify their fare structures and provide benefits such as fare capping to reward frequent travelers. Also, fare payment systems, particularly ones that must accommodate multiple modes and agen­ cies, differ from large equipment­based projects because they are software driven, especially the newer architectures that use mobile apps or back office account­based architectures. The complexity of these systems is typical of most large complex software projects. Multiagency systems tend to phase in functionality and partner deployments. Because deploy­ ments tend to be complex, regional systems have opted for turnkey or Design­Build­Operate­Maintain (DBOM) models, and many deploy using the “big bang” approach. However, several of the most recent procurements are issued as multiple tenders. Systems that are scalable, such as a multiagency EFPS, tend to integrate agencies and ser­ vices in a systematic, modular fashion. Even after seven or more years in deployment, Clipper, the electronic smart card servicing San Francisco Bay Area transit agencies, is still adding new partners. chapter eight CONCLUSIONS AND SUGGESTIONS FOR FUTURE RESEARCH

69 Five common themes emerged from the interviews, survey, and studies on how to deploy multi­ agency EFPS. These include: Deploy the system in stages. Whether the staged deployment is by functionality, user groups, or modes, partition the deployment to allow room to fix incremental issues with the software. “Test, test, test” and when you are finished testing. . . . Most of the respondents have learned not to go live until all the problems, user issues, and software glitches are out of the system. This lesson is perhaps the more critical to ensure public acceptance. Increase outreach efforts. No matter how many outreach efforts are deployed, actual customers’ behavior may not coincide with expectations. Several agencies have engaged customers very early in the deployment process to anticipate and learn from their interaction with the media and validators, after which EFPS programs may apply corrections before the majority of the system is deployed. Extend transition phase and decommissioning deadlines. Several regional smart card programs have waited until customers were comfortable with the new system, and all issues were resolved before decommissioning the old system. Hire program management support. Respondents overwhelmingly identified the need to hire a program management consultant to help plan, procure, and deploy the system, and to manage the vendor (or multiple vendors). The program management consultant not only supported the procure­ ment of traditional fare system technology, but now must also cover banking, electronic payment, credit/debit operations, security/PCI compliance, and mobile and card technologies. New business models are emerging for common fare payment management. New technologies; faster, more effective communications; and widespread use of mobile devices drive new paradigms, architectures, and business strategies. With new payment technologies advertised and promoted by consumer electronics manufacturers, it is difficult to predict what the next generation payment system will look like. Will travelers use contactless bank cards to tap on a reader, check in using mobile apps and wearables, or be tracked (be­in) through their Global Positioning System device through their transit journey? With several multiagency EFPS deploying second­generation systems, and some agencies jumping from tokens to accounts or from paper tickets to mobile apps, there are a few potential trends on the horizon: Integration of on-demand mobility services. Political and customer demands to integrate on­demand mobility services is beginning to drive integration of multiagency EFPS to include non­traditional ser­ vice partners. Some card­based systems are beginning to identify solutions to build the interoperability. However, among the current solutions, at least one of the partners has a customer account management application in the back office that integrates the customer profile or smart card. Open payment systems. Open payment systems that use payment apps may reduce or eliminate the need for specialized transit fare media altogether. The study revealed information about current practices related to governance structures, fare inte­ gration and methods, procurement and deployment approaches, new architectures and technologies, and data analytics. There are a few questions raised by recent developments or too detailed for a syn­ thesis to explore. The following studies are suggested for future research: Business/financial models in a multiagency EFPS. The research did not cover issues such as costs, revenue settlement and allocation among partner organizations, partner agency integration issues, and new models for including non­traditional mobility partners. These areas are critical to understand­ ing where multiagency systems can extend in the future. Mobile payment EFPS. Of particular interest is the emergence of mobile payment EFPS deployed as a payment platform (also known as payment as a service or PaaS). The physical infrastructure is

70 owned by the vendor, and agencies procure fare and payment services from the vendor. These sys­ tems are shared among multiple agencies that may or may not be geographically contiguous. The Massachusetts Department of Transportation program Bus Plus implemented the first phase of this business model. The results that emerge from this program will show how effective this system is at leveraging infrastructure across multiple, smaller transit providers. The mobile space in particular is an area that has yet to be examined, particularly public/private partnerships with the vendor, eco­ nomic justice and equity issues, integration with third party mobility providers, integration with card or account­based fare systems, new paradigms for “check in” or “be in,” and many more open issues. Equity and social justice. How payment systems—either card­based or account­based—are dealing with equity and social justice issues is a critical issue area that has not yet been covered by most studies. Card­based systems have limitations that the newer account­based systems do not; account­ based systems, because they are not constrained by an index written to the card, can provide an unlimited number of fare policy strategies, extend to multiple fare media, and expand to emerging and integrated mobility options. However, most account­based systems, including mobile ticketing, require a link to a bank­issued credit or debit card, which is a problem for the unbanked population. These issues will become more pronounced as disruptive mobility options are integrated with transit services. Measures of success. Respondents were asked about their return on investment studies and measures of success for their regional fare system. Few had performed post­implementation studies that showed whether they achieved their objectives. When asked about their performance metrics, agencies described measurements related to equipment reliability and ridership; however, there are many other types of measures that were not described—the rate of transition for new media, reduc­ tion in cash collection, customer acceptance, and use of new fare policies by transaction. A deeper understanding and normalization of measures of success will help agencies build better strategies for their transition and phasing approach. In summary, multiagency EFPS benefit every customer, region, and agency that participates in the system. From customer convenience to agency efficiencies, the reward is apparent in areas such as fare policy flexibility, seamless transit payment, rich data analysis, customer discounts, and mobility service integration. The complexity of the system is still an obstacle to adoption, yet new models are evolving to lower barriers. The deployment of the new architectures may eventually help transition regions from their ticket or magnetic card technology to payment methods that allow users to cross­ geographical and institutional boundaries with new payment technologies.

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TRB's Transit Cooperative Research Program (TCRP) Synthesis 125: Multiagency Electronic Fare Payment Systems describes the current practice, challenges, and benefits of utilizing electronic fare payment systems (EFPS), such as smart cards. This synthesis reviews current systems and identifies their major challenges and benefits; describes the use of electronic fare systems in multimodal, multiagency environments; and reviews next-generation approaches through existing implementation case examples.

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