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Multimodal Fare Payment Integration (2020)

Chapter: Chapter 2 - History, Context, and Technological Change

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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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Suggested Citation:"Chapter 2 - History, Context, and Technological Change." National Academies of Sciences, Engineering, and Medicine. 2020. Multimodal Fare Payment Integration. Washington, DC: The National Academies Press. doi: 10.17226/25734.
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8 History, Context, and Technological Change 2.1 Overview This literature review examined published reports, news articles, self-published agency materials, and industry news sources relating to fare payment systems and the current state of the industry as it relates to multimodal fare payment convergence. Both national and inter- national resources were used, though the focus was on U.S. experience. Over the years, various TCRP research reports and synthesis reports have explored topics related to fare payment convergence. Please see Figure 1 for a full list of related TCRP publica- tions. This synthesis includes a review of those reports, supplemented with additional sources. A full list of documents reviewed is provided in the References. 2.2 Historical Context of Fare Payment Convergence Fare payment collection systems for transit have experienced an accelerated rate of techno- logical change in recent years. From the post–World War II period until the 1980s, fare payments were dominated by cash, tokens, and paper passes. Between the 1980s and 1990s, magnetic stripe cards were introduced but did not completely replace cash (Okunieff 2017). In the 1990s, agencies started to explore using electronic fare payment systems such as smart cards. TCRP Report 10: Fare Policies, Structures, and Technologies (Fleishman et al. 1996) highlighted that using smart card technology offers agencies operational benefits such as the ability to provide a broader range of fare options and more revenue control. Looking to the future, the report states that emerging technological developments can facilitate inclusion of other transit operators and nontransit solution providers—alluding to the multimodal payment convergence that is the focus of this TCRP synthesis. TCRP Report 32: Multipurpose Transit Payment Media (Fleishman et al. 1998) noted that, with technological advances in both electronic transit payments and banking, convergence of transit and commercial banking technologies could lead to the acceptance of standardized financial media (i.e., stored-value cards) for transit payments. In 2000, the first smart card–based electronic fare payment system in the United States was introduced by the Washington Metropolitan Area Transit Authority. Many other transit systems followed, such as Boston’s Massachusetts Bay Transportation Authority in 2006, the Metropolitan Atlanta Rapid Transit Authority in 2006, the Port Authority of New York and New Jersey in 2007, San Francisco’s Bay Area Rapid Transit in 2007, and the Los Angeles County Metropolitan Transportation Authority (LA Metro) in 2005. Some agencies experi- enced impediments, with many early smart card deployments taking six to 10 years to imple- ment (Okunieff 2017). As of 2019, several agencies are still in the process of implementing C H A P T E R 2

History, Context, and Technological Change 9 smart card fare payment systems and most still allow cash fares. Additionally, the complexity of fare payment systems has increased with the introduction of multiagency fare payment sys- tems, extensively covered in TCRP Report 115: Smartcard Interoperability Issues for the Transit Industry and TCRP Synthesis 125: Multiagency Electronic Fare Payment Systems and defined as systems “in which one or more agencies share payment processing, adopt governance rules (including fare/transfer policies, settlement, and cost allocations), and deploy common elec- tronic fare media and equipment technologies to support the diversity of modes and fare structures” (Okunieff 2017, p. 11) In 2003, TCRP Report 94: Fare Policies, Structures and Technologies: Update (Multisystems Inc. et al. 2003) identified key issues and emerging developments, such as • Equity and environmental concerns, • New programs and partnership opportunities, and • A focus on providing “seamless travel.” The report noted that transit agencies are concerned about how to promote standardiza- tion and interoperability among the different contactless card technologies (Multisystems Inc. et al. 2003). TCRP Report 115 focused on smart card interoperability and the importance of standards. The study highlighted that “many smartcard-based fare payment implementations are based on proprietary system architectures that do not conform to common interface protocols” (Acumen Building Enterprise, Inc. 2006, p. 26). This problem creates a barrier to implementing regional interoperability among transit providers—and remains an impediment to multimodal fare convergence. According to TCRP Report 115, prioritizing standards at the system design and procurement stage would lead to better smart card interoperability (Acumen Building Enterprise, Inc. 2006). Related TCRP Publications 1996 TCRP Report 10: Fare Policies, Structures, and Technologies 1998 TCRP Report 32: Multipurpose Transit Payment Media 2003 TCRP Report 94: Fare Policies, Structures and Technologies: Updates TCRP Reports 10 and 32 2006 TCRP Report 115: Smartcard Interoperability Issues for the Transit Industry 2015 TCRP Report 177: Preliminary Strategic Analysis of Next Generation Fare Payment Systems for Public Transportation 2017 TCRP Synthesis 125: Multiagency Electronic Fare Payment Systems Figure 1. Related TCRP publications.

10 Multimodal Fare Payment Integration Since the early 2010s, trends from the retail payments industry have been crossing over to fare payments, with the Utah Transit Authority introducing open payments using contactless bank cards in 2010 and the Chicago Transit Authority expanding on the concept to support multiple agencies in 2013 (Okunieff 2017). In 2015, TCRP Report 177: Preliminary Strategic Analysis of Next Generation Fare Pay- ment Systems for Public Transportation provided an overview of technological developments and new possibilities for fare payment system design, and it introduced the terms “account- based” and “open payments” (Wallischeck et al. 2015). See Figure 2 for an illustration of that overview. TCRP Report 177 referred to this new type of system as a next generation transit fare payment system, which it defined as “a transit fare payment system that leverages technology to improve transit agency operations across the business enterprise, while increasing customer convenience and enhancing the customer experience” (Wallischeck et al. 2015, p. 5). The latest generation payment systems are developed using open architecture and are less dependent on smart cards, instead relying on a back office where customer accounts are stored. In 2017, TCRP Synthesis 125 focused on multiagency electronic fare payment systems and the new challenges and benefits of emerging fare payment technologies that use mobile devices and third-party contactless media (Okunieff 2017). Besides transit agencies, TCRP Synthesis 125 also covered nontraditional partners as part of a fare payment system. Customer choices and expectations are driving not only the adapta- tion of new payment methods but also the integration of payment options for nontraditional mobility services. At the time of the survey conducted for TCRP Synthesis 125, of the 23 transit agencies that responded to the survey, only nine included nontraditional mobility service providers in their fare payment systems. Of those nine agencies, four identified parking as the nontraditional service that was integrated into their fare payment system. The emergence of new modes and the popularity of nontraditional mobility services such as bike sharing, car sharing, scooter sharing, and ride hailing have increased the expectations of the traveling public. The advent of these new services along with the ubiquity of smartphones has generated much interest from both transit agencies and riders for payment convergence between transit agencies and new mobility service providers. Source: Wallischeck et al. 2015. Single Figure 2. Typology framework for transit fare payment system design attributes.

History, Context, and Technological Change 11 2.3 Current Transitions—Enabling the Future 2.3.1 Defining Payment Convergence The Secure Technology Alliance and Association for Commuter Transportation (2017) identified four types of payment convergence that support multiple transit modes and external mobility providers: • Use of a common payment technology • Linked or integrated mobile apps • Common or linked payment accounts • Incentives or co-marketing For the purposes of this TCRP synthesis, payment convergence can consist of any of those four forms, with special focus on achieving convergence with entities that are outside of the transit agency. Many public sector leaders and private sector developers of mobility services have stated that transit payment must not be a barrier to achieving a multimodal mobility ecosystem. To date, however, partnerships among transit agencies and new mobility service providers have not often included convergence of payment methods, focusing more on common mobile portals for trip planning, cross-promotional programs, or agreements to co-locate services (Meyer and Shaheen 2017). 2.3.2 Changes in System Architecture That Enable Convergence: From Card-Based to Account-Based Recent fundamental changes in fare payments stem from a global technological trend toward cloud-based processing and ubiquitous connectivity. In the fare payments space, these changes are reflected in a general trend away from card-centric systems to account-based systems. Card-based systems rely on processing power distributed among all smart card readers and smart cards, which function only if the readers are periodically synchronized with back offices (see Figure 3). In an account-based system, the fare payment medium functions principally as an identi- fier to an account residing in the back office. This architecture allows multiple identifiers for fare payment. Account-based payment systems can facilitate payment convergence because all information flows to customer accounts, allowing multiple types of fare media to access the same customer account. Customer accounts can be linked to various modes of travel, which provides convenience to customers and allows for cross-modal incentives (Wallischeck et al. 2015). 2.3.2.1 Instruments Accepted in an Account-Based System An account-based fare payment system can be an identifier-based fare payment system that architecturally supports any identifier issued either by the agency or by some other entity. For example, customers can access and pay for transit by presenting their bank-issued credit/debit cards, mobile payment methods (i.e., Apple Pay, Google Pay, Samsung Pay), two-dimensional (2-D) barcodes such as Quick Response (QR) codes either on a mobile display or printed on paper, student identification (ID) cards, or library cards, and potentially fingerprints, iris scans, or video identification based on closed-circuit television (Jayaprakash et al. 2018). Fare payment systems that can support identifiers issued by outside entities are widely described as “open-loop” systems “in which an outside entity’s card or other form of pay- ment is accepted for use by a transit agency” (Wallischeck et al. 2015, p. 17). In an open- loop system, the payment medium (i.e., the credit card) can serve as both the means by which riders purchase transit fare and the means by which a transit agency provides access to the system—the fare medium. Table 1 summarizes the most common solutions used with

12 Multimodal Fare Payment Integration Card-Centric Fare Payment System [A] fare payment system that uses read-write smart cards that store information about valid fare products (or stored value) and the last several transactions. The card-based system relies on the smart card and smart card reader to process the fare and validity of the media based on fare rules downloaded to the smart card reader. (Okunieff 2017, p. 72) Account-Based Fare Payment System [A] transit fare collection system architecture that uses the back-office system to apply relevant business rules, determine the fare, and settle the transaction. The terminal reads information stored on fare payment media and sends it to a back office over a network. The back office determines whether the card is valid and returns an “approve or deny” signal that enables the terminal to open the gate or to signal the rider and the bus operator on whether to allow passage. (Smart Card Alliance 2011, p. 41) Figure 3. Card-based versus account-based fare payment systems. Form of Contact with the Reader Explanation Cards Contactless smart cards Smart cards adapted to account-based systems Contactless bank cards Europay-, MasterCard-, and Visa-compliant bank cards accepted on transit Official documents Student card, ID, driver’s license, or similar documents Devices using near-field communication function (mobile phones, smart watches, etc.) Mobile wallet and bank cards Bank cards added to Apple/Samsung/Google Pay wallets and used in transit Mobile wallet and virtual smart cards Smart cards added to Apple/Samsung/Google Pay wallets (e.g., Ventra card in Apple Wallet) Mobile phone using the display QR codes from mobile apps Transit, Masabi, and other apps produce 2-D barcode tickets accepted on transit QR codes from mobile wallets WeChat and Alipay as a payment token Mobile phone using the camera Transit apps/wallets Using 2-D barcodes to create a “check in” or “check out,” or to pay a fixed fare Mobile wallets Using 2-D barcodes to create a “check in” or “check out,” or to pay a fixed fare Other Paper tickets with 2-D barcode Prepaid tickets that can be read electronically Wearable devices Key fobs, wristbands, and stickers adapted to account-based systems Biometric identifiers Fingerprints, veins, or facial recognition Table 1. Forms of identifiers used in account-based systems.

History, Context, and Technological Change 13 account-based systems for accessing transit, some of which may not have been implemented yet in the United States. For an agency implementing an account-based system that supports multiple forms of identifiers, it is important to ensure that both the back-office and the customer-facing aspects can support the identifiers. It is critical that customer-facing elements such as validators, fare gates, and other readers comply with standards such as Europay, MasterCard, and Visa (EMV) and payment card industry (PCI), and that they can read outputs such as optical barcodes, student/library ID cards, fingerprints, irises, and so on. 2.3.3 New Entrants and International Trends Many of the previously mentioned emerging solutions in transit ticketing have been intro- duced by entrants that are new to the transit industry. Their entry has led to new dynamism in the ticketing arena and challenges for transit agencies as they form new partnerships or work with new vendors that may not have as much background in the intricacies of transit. For example, well-established financial transactions companies such as MasterCard and Visa are seeking new ways to grow market share, including actively supporting public transport. Payment platforms such as Apple Pay, Google Pay, and Samsung Pay are also extending their services into the mobility market. For example, the Tri-County Metropolitan Transporta- tion District of Oregon has a virtual Hop card that allows for transit payment via a tap of a phone. These platforms partner either with traditional payment market players such as Visa or MasterCard or directly with transit parties. Globally, established financial transactions com- panies are now competing with new QR-based payment methods such as Alipay and WeChat, which are experiencing high rates of growth and adoption in Asia—and are now a method of payment in transit systems across the Asia-Pacific region. As new payment methods grow in popularity in the United States, transit agencies may also see benefits in adopting these methods for use on transit. In partnership with transit agencies, financial transactions companies have the potential to offer many more options for transit riders. These companies may challenge the status quo posi- tion of transit agencies, however, as they take over roles previously held by agencies, such as customer service and transaction processing. Therefore, agencies that want to maintain their influence on future developments, products, and service to the transit customer need to carefully consider how they procure services or enter into partnerships. 2.3.4 Data-Related Challenges Because of technological improvements, transit agencies can now collect large amounts of precise data including location data and personally identifiable information (PII). New mobility service providers also operate in the public realm and generate an increasing amount of data. Ensuring that data is collected, managed, and used by cities and companies in a way that is appropriate and protects user privacy is an increasingly urgent concern (NACTO and IMLA 2019). As transit payments evolve from cash-based, to card-based, to account-based, the amount of information collected and linked to an individual identity increases. As data is increasingly linked to individuals, concerns grow about its appropriate use and management. The National Association of City Transportation Officials identified four principles for sharing, protecting, and managing data: • Data is a public good. Cities require data from private vendors operating on city streets to ensure positive safety, equity, and mobility outcomes on streets and places in the public right-of-way.

14 Multimodal Fare Payment Integration • Data needs to be protected. Cities and private companies must treat geospatial mobility data as they treat PII. • Data needs to be collected purposefully. Cities must be clear about when, why, and what data is necessary for planning, analysis, oversight, and enforcement purposes. • Data needs to be portable. Open data standards help cities and private companies share data in universal formats, enabling cities to use data from multiple sources and supporting innovation in both the public and the private sectors (NACTO and IMLA 2019). The following subsections elaborate on current concerns about three specific data-related challenges: data management, protecting privacy, and managing cybersecurity risk. 2.3.4.1 Data Management Data collected and used in transit payments systems varies depending on the system. Many smart card–based systems allow for onboarding and offboarding information that can include PII such as rider classification (rider classification allows for discounts or incentives associated with status as a senior, student, or rider with disabilities) and some payment data. As fare payment systems become more sophisticated, information can expand to include more precise geolocation data and payment account information such as credit card information. Use of some of this data—particularly in relation to trip planning and ridership—can help agencies preserve and grow ridership as well as improve their planning and operations. TransitCenter (2018), a foundation that supports advocacy and research for transit in the United States, concluded that producing readily available, timely, and accurate transit data is critical for transit agencies that wish to stay competitive in an increasingly crowded transportation landscape. Even smart card–based electronic fare collection systems provide opportunities for transporta- tion data collection because transaction data obtained through the system contains a significant amount of archived information (Chen and Fan 2018). The main benefits of data collection include strategic planning (travel time analysis, demand forecasting), tactical planning (trip data, pattern behavior), and operational concerns (revenue, providing better travel time and load information) (Okunieff 2017). Using transit fare data also enables third-party trip planning apps to offer a more seamless travel experience to an expanded user base (TransitCenter 2018). These potential benefits from the use of fare data have not been fully realized (Okunieff 2017), mostly because of the lack of high-quality data. High-quality data is typically defined as data that is accurate, is published frequently, is organized in a way that allows for interoperability with other systems, and includes elements critical for users to make informed transit choices (Crane and Rucks 2016). Transit agencies typically have limited resources, which prohibits them from investing in the infrastructure necessary to collect high-quality data and to hire data-savvy staff who can leverage that data through active management and analysis. An additional barrier to transit agencies’ achieving data interoperability is being locked into closed and proprietary sys- tems by vendors. Transit agencies can protect their interests by including specific requirements for data interoperability into contracts and agreements with vendors (TransitCenter 2018). The data management landscape is increasingly complex because private companies that offer trip planning apps have started to serve as de facto front ends for some transit agencies. Private firms hold much of the end-user behavior and usage metrics for third-party applications. Establishing two-way data sharing partnerships, including standardized data specifications, will eventually lead to the increased ability to meet transit riders’ needs (TransitCenter 2018). 2.3.4.2 Privacy and Cybersecurity Collecting customer data can benefit transit agencies in many ways, but it also brings associ- ated risk. Data or information privacy refers to the concept of controlling how one’s personal

History, Context, and Technological Change 15 information is acquired and used. Privacy also includes the concept of protecting against unauthorized or arbitrary access (Harteis 2018). The National Association of City Transporta- tion Officials defines data protection as “mechanisms for guarding against unauthorized access, including practices for preventing unauthorized entities from accessing data” (NACTO and IMLA 2019). For transit agencies, the concept of location privacy—the ability to prevent other parties from learning one’s current or past location (Beresford and Stajano 2003)—is important. Intelligent transport systems rely increasingly on data that can be linked to real-time travel of individuals. Transportation and location data can reveal personal habits, preferences, and behaviors (Cottrill 2015). For example, a 2013 Scientific Reports article, “Unique in the Crowd: The Privacy Bounds of Human Mobility,” found that, in a dataset of 1.5 million people over 6 months, and using location points triangulated from cell phone towers, “four spatio-temporal points are enough to uniquely identify 95% of the individuals” (de Montjoye et al. 2013). Managing data privacy concerns is increasingly complicated as third parties play a more active role in generating, managing, and using transit data. For example, trip planning and travel aggregation apps such as Citymapper (Citymapper 2019) and the Transit app (Transit 2019) have privacy policies stating that these companies not only collect large amounts of location information and PII but also share information available on their platforms with other parties including payment providers and mobility service providers. Establishing the right regulations is an essential step toward strengthening individuals’ fundamental rights in the digital age. Clarifying rules for companies and public bodies in an increasingly global market is important to ensuring the privacy of transit users (European Commission 2016). In the United States, protecting private information or PII has additional challenges for public agencies—including freedom of information and sunshine laws, state privacy laws (with differing definitions of PII), requests for information from law enforce- ment, and compliance with the General Data Protection Regulation (a European Union regulation that protects the data of its citizens regardless of geographic location) (NACTO and IMLA 2019). Consequences of cyber incidents differ widely in their impact, duration, and cost; however, the interconnectivity of transportation systems increases the possibility of higher levels of damage. Preventing such events requires transit agencies to be aware of cybersecurity risks. A strong cybersecurity plan has the potential to reduce cybersecurity risks. Such a plan typically incorporates security strategy and policies, clear roles and responsibilities within an agency, vulnerability and risk assessments, and development and maintenance of the cybersecurity plans (Countermeasures Assessment and Security Experts LLC and Western Management and Con- sulting LLC 2016). TSA (2019) has a variety of valuable resources for the U.S. transit industry, including the Surface Transportation Cybersecurity Toolkit, a resource toolkit designed for smaller transportation operators with fewer than 1,000 employees. Additionally, repositories of information related to cybersecurity are available through collaborations such as the Surface Transportation Information Sharing and Analysis Center (2019), which is co-sponsored by the American Public Transportation Association and the Association of American Railroads. Today’s transportation systems consist of complex networks of operating control systems and information technology networks. Over time there has been a shift from isolated systems to inte- grated, shared, and more open ones (Countermeasures Assessment and Security Experts LLC and Western Management and Consulting LLC 2016). As transit agencies rely increasingly on information technology and possess large amounts of PII, the risks of cyberattacks rise and the attack surface is increasingly integrated. Specific information and guidelines targeted at under- standing and managing this growing threat—particularly as it relates to payment convergence

16 Multimodal Fare Payment Integration and the information that is shared between public and private parties—would be highly benefi- cial to transit agencies. Overall, issues of privacy and cybersecurity for customer data associated with transit ticketing and payment convergence operate within a larger framework for privacy in the digital age. The ability of mobility and payments data to include PII simply amplifies the need for modern data privacy practices and digital security methods, including protocols for storage, access, retention, deletion, and data breach plans (NACTO and IMLA 2019). 2.3.5 Mobility as a Service The term “Mobility as a Service” (MaaS) often appears in discussions of trip planning and payment integration, including transit and other mobility modes. MaaS Alliance (2019), an international public–private partnership created to advocate for a common approach to MaaS, provides the following definition of MaaS: Mobility as a Service (MaaS) is the integration of various forms of transport services into a single mobility service accessible on demand. To meet a customer’s request, a MaaS operator facilitates a diverse menu of transport options, be they public transport, ride-, car- or bike sharing, taxi or car rental/lease, or a com- bination thereof. For the user, MaaS can offer added value through use of a single application to provide access to mobility, with a single payment channel instead of multiple ticketing and payment operations. For its users, MaaS should be the best value proposition, by helping them meet their mobility needs and solve the inconvenient parts of individual journeys as well as the entire system of mobility services. The National Center for Mobility Management (2018) presented the following MaaS topology in its paper, Mobility as a Service: Concept and Practice: • Level 0: No integration, single, separate service • Level 1: Integration of information such as multimodal trip planner and price info • Level 2: Integration of booking and payment • Level 3: Integration of service offerings including bundling and subscriptions • Level 4: Integration of governance policies and public–private cooperation As of mid-2019, most entities and communities across the United States have yet to reach the third level of integration described in this topology. A few travel integrator apps have introduced the capability to purchase single tickets but do not offer subscriptions or multimodal discount options. 2.4 Summary The overview of the evolution of electronic payment systems serves as a foundation for the discussion in this synthesis about the present state of practice for transit agencies. Fare payment collection systems for transit have experienced an accelerated rate of technological change since the 1980s. Fare payments were dominated by cash, tokens, and paper passes before magnetic stripe cards were introduced. Later, while the share of cash usage in transit stayed significant, agencies started to explore the use of electronic fare payment systems such as smart cards. In 2000, the first smart card–based electronic fare payment system was introduced in the United States. Around that time transit agencies showed the first sign of being concerned about how to promote standardization and interoperability among the different contactless card technologies. In the 2010s, although the challenges of handling large amounts of cash in the transit system and lack of interoperability remain unsolved, trends from the retail pay- ments industry have been crossing over to fare payments. These trends include account-based ticketing, open payments, and the use of mobile devices and third-party contactless media.

History, Context, and Technological Change 17 These technological developments, the emergence of new modes, and the popularity of nontraditional mobility services such as bike sharing, car sharing, scooter sharing, and ride hailing have increased the expectations of the traveling public. Increased customer expecta- tions have accelerated the conversation about multimodal payment convergence. In general, four types of payment convergence can support multiple transit modes and external mobility providers: use of a common payment technology, linked or integrated mobile apps, common or linked payment accounts, and incentives or co-marketing. To date, however, most partnerships between transit agencies and new mobility service providers have not included convergence of payment methods. Many of the emerging technologies and business solutions in transit ticketing have been introduced by new entrants to the transit industry, which has led to new dynamism in the ticketing arena and challenges for transit agencies. Collaboration of new mobility service providers and transit agencies can further complicate data management and create new data privacy and cybersecurity risks. The remainder of this TCRP report investigates where transit agencies currently stand in the process of payment convergence with new mobility providers, what benefits they expect from it, and how they deal with the new challenges.

Next: Chapter 3 - Status of Payment Convergence in the United States »
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Nearly all transit agencies are seeing potential benefits to multimodal payment convergence. However, many agencies find that implementing necessary upgrades is cost-prohibitive, which is the biggest barrier to full adoption.

The TRB Transit Cooperative Research Program's TCRP Synthesis 144: Multimodal Fare Payment Integration documents current practices and experiences of transit agencies dealing with the complexities of multimodal fare payment convergence.

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