Originally posted on busride.com
To reach the ideal transit payment solution, customer convenience must be factored into the equation, according to solutions specialist at Vix Technology, Nick Halden. He shares his insight on how account-based fare collection is making it easier to pay for transit than traditional systems, and scoring high with customers.
Riders have historically endured significant friction in the experience of paying for public transportation. By necessity of the technologies available at the time, legacy fare collection systems create frustration by requiring riders to provide exact change, or to use a magnetic stripe card that often requires precision to ensure the card swipe is read successfully. And with the American Public Transportation Association citing that 35 million passengers board public transportation each day, the sheer volume of travelers adds fuel to the friction problem.
In today's fast-paced world, customers increasingly expect payment transactions to be quick and painless. This has triggered a wave of innovative thinking amongst fare collection providers as they vie for pole position in the race to meet expectations.
Ultimately, creating convenience in the payment arena is about providing customers with easy-to-understand choices and giving them the freedom to choose a method that best suits their preferences. With an account-based system, the tokens that can be used to pay a transit fare have changed dramatically - they no longer need to be agency-issued cards sine the system can accept any RFID or NFC-capable media. This means that the 'token' could be a contactless EMV card, mobile phone, student or employee ID, or even a contactless ski pass. This flexibility is a key benefit to transit agencies as well, fostering customer loyalty through rider choice.
Developing and implementing these new technologies is only half the battle, however, as encouraging adoption can be a challenge. Before the introduction of contactless payments such as Apple or Android Pay, it was difficult for riders to understand the inherent convenience of contactless payments. Despite a greater prevalence of such payment methods now, there is still some resistance; many passengers prefer to pay cash and are reluctant to adopt alternative methods.
With this in mind, there is a need to educate riders on the benefits of account-based fare collection and incentivize adoption. To this end, account-based systems allow agencies to offer an array of best fare products, loyalty schemes, and fare promotions, as well as support reduced fare products for eligible riders. One recent example of a best fare policy that was not easily implemented in older systems is fare capping. This enables riders to receive the benefits of a prepaid monthly pass o a pay-per-use basis throughout the month. Once a rider reaches the fare cap, the rest of her or his trips for that month are free. Of course, agencies need not remove payment options in the implementation of an account-based solution; it is far better to introduce attractive new options to incentivize adoption alongside the existing methods that riders are used to using.
If agencies can help riders recognize and trust the flexibility and convenience that account-based technology brings, adoption will happen at a faster rate. Facilitating passenger education, providing a consistent and reliable payment experience and offering relevant promotions and loyalty benefits makes for a powerful combination that builds this trust.
Our transit agency customers regularly conduct surveys of their ridership, asking them about all aspects of the services provided, and riders consistently rate our fare collection systems as the top benefit. The results are resoundingly positive: riders like the flexibility and convenience associated with contactless payments.
Riders of Seattle's ORCA card system rate fare collection highly in annual surveys: 81 percent of riders who use an ORCA card to pay their fare are "very satisfied" overall using the ORCA system. Riders rate the method of paying fares, and the ORCA card higher than any other aspect of KCM's service.
In 2008 Vix launched the first account-based fare collection system in collaboration with the Utah Transit Authority (UTA), enabling riders to pay for transit using multiple forms of media including contactless credit cards and third party-issued student and employee IDs. The introduction of the contactless, reloadable FAREPAY card in 2013 further increased flexibility for riders, adding another payment option to the existing system: nearly 54,000 cards were sold in the first year, climbing to 24,000 in 2014. By 2015 FAREPAY cards accounted for almost 6 percent of the system's total ridership (46.6 million journeys).
North America as a whole is seeing an increase in interest in account-based fare collection, and over the next three to five years we will see more examples as more agencies come on board. In the meantime, we are looking at new technologies and the next evolution of payment methods in transit ticketing. One example is Bluetooth Low Energy (BLE) and Be-In/Be-Out, that eliminate the need for riders to actively tap a card to pay their fare. While BLE represents an exciting opportunity for fare payment innovation, ultimately the goal of account-based systems is to provide the best payment experience by offering a wide range of options that caters to the diverse preferences of transit riders.
Originally posted on busride.com