Apple-sponsored NFC Forum working to bring contactless payments to U.S. public transit

AppleInsider

The NFC Forum -- an industry lobbying group that counts Apple as a board member -- on Wednesday announced a new partnership with the American Public Transportation Association that will see the two groups working to broaden NFC support among public transit operators in the U.S.

As part of the collaboration, the NFC Forum and APTA will create and distribute training materials, customer research, and other educational programs to promote NFC adoption by transit operators. In addition, APTA will expand its own participation in international NFC- and tranport-related working groups.

"NFC will improve the passenger experience by linking passengers with mobile phones and public transit fare payment, and by increasing the opportunities to share digital content to improve the transit passenger convenience," APTA chief Michael Melaniphy said in a release.

The use of NFC payments for transit networks has become increasingly popular around the world as operators work to make lines more efficient. Of the world's 10 busiest metro systems, only New York City and Mexico City have yet to implement contactless fare cards -- though New York is in the process of doing so, setting a target date of 2020.

Apple is well positioned to benefit from any expansion of NFC in the U.S. thanks to Apple Pay, and the company has already seen success with public transit operators. Commuters in London can pay their fares through the NFC-equipped iPhone or Apple Watch.

Apple joined the NFC Forum as a sponsor member last August. The company is represented on the body's board of directors, by Director of Wireless Systems Engineering Aon Mujtaba.

aaarrrgggh

Don't transit agencies go to proprietary systems to reduce transaction cost?

tzm41

aaarrrgggh said:

Don't transit agencies go to proprietary systems to reduce transaction cost?

I think Apple could agree on a reduced transaction fee for public transit systems for the broader market coverage, and convenience of the public, as opposed to the high percentage they charge for credit transactions.

mike1

tzm41 said:

aaarrrgggh said:

Don't transit agencies go to proprietary systems to reduce transaction cost?

I think Apple could agree on a reduced transaction fee for public transit systems for the broader market coverage, and convenience of the public, as opposed to the high percentage they charge for credit transactions.

And they would save a lot by not having to produce cards for every customer.

ksec

aaarrrgggh said:

Don't transit agencies go to proprietary systems to reduce transaction cost?

I wonder if these are paid at the same rate. It is hard to imagine transport uses of NFC charges at normal Credit Card Rate of 1+%.

Once this is lowered to a point where even proprietary system could not complete then it would make financial sense to switch. I think the threshold depends on regions. London's Oyster Card was definitely more expensive to run then NFC Credit Card with 1% Charges.

For places like Hong Kong, Singapore or Japan, my guess it needs to be around below 0.5%.

I was also thinking how do these transportation companies protect them from price hike in the future?

tokyojimu

Chicago's system accepts NFC credit cards, but you get charged full fare at each boarding unless you register the card number, at which point I'm guessing they treat it privately and don't have to pay CC charges. Can people register their Apple Pay pseudo-CC number, I wonder?

jfc1138

Were Apple to open the NFC function to apps then the transit payment wouldn't have those overhead costs: I'm thinking like Starbucks now, the Starbucks app displays the code and the Starbucks system processes the payment and you "refill" the app: the difference is now it's scanner based but that's a modest detail. Refilling of the transit "card", like the Starbucks app, could be ApplePay or a credit card...

redhanded

tokyojimu said:

Chicago's system accepts NFC credit cards, but you get charged full fare at each boarding unless you register the card number, at which point I'm guessing they treat it privately and don't have to pay CC charges. Can people register their Apple Pay pseudo-CC number, I wonder?

In London there is no difference in fares between proprietary NFC travel cards (Oyster Card) and NFC credit cards and ApplePay. Running a proprietary NFC travel card system costs money as well (like handing cash from machines used to charge the card...) but I'm guessing that given Transport for London are actively promoting NFC credit cards and ApplePay, they can't be making less money than they do from their proprietary travel cards ????

jungmark

I think this would be a game changer. Instead of looking for exact change or buying a ticket or tokens (thanks, Philly),  Tap your iPhone. 

ksec

redhanded said:

tokyojimu said:

Chicago's system accepts NFC credit cards, but you get charged full fare at each boarding unless you register the card number, at which point I'm guessing they treat it privately and don't have to pay CC charges. Can people register their Apple Pay pseudo-CC number, I wonder?

In London there is no difference in fares between proprietary NFC travel cards (Oyster Card) and NFC credit cards and ApplePay. Running a proprietary NFC travel card system costs money as well (like handing cash from machines used to charge the card...) but I'm guessing that given Transport for London are actively promoting NFC credit cards and ApplePay, they can't be making less money than they do from their proprietary travel cards ????

Transport for London simply don't want the hassle of running their own NFC system. They don't want to deal with those payment and securities nightmare. The cost of running it is properly even higher the using NFC Credit Cards.

As to opening up the NFC system, it doesn't work like that, since their implementation are proprietary NFC solution, it simply wouldn't work even if Apple had opened up their NFC function for third party.  

jfc1138

jungmark said:

I think this would be a game changer. Instead of looking for exact change or buying a ticket or tokens (thanks, Philly),  Tap your iPhone. 

IIRC Philly is rolling out a new system, talk about phones so odds are contactless cards, no more tokens. 

slprescott

Good... but too slow?

Apple Pay                    = 5 seconds (approx time to complete a payment transaction, not just recognize the NFC-based iPhone)
DC Metro smart card  = less than 1 second

I love NFC-based Apple Pay, but I worry that slow response at a busy subway station would trigger people to complain, "This Apple solution is too slow!"

JinTech

jungmark said:

I think this would be a game changer. Instead of looking for exact change or buying a ticket or tokens (thanks, Philly),  Tap your iPhone. 

Massive game changer indeed. Instead of having to wait in line to purchase tickets, and always having to worry about if I am going to miss the train due to having to reload the ticket is huge. Sometimes during big events in the Bay Area you could wait as long as five minutes to get a ticket, sometimes even longer. I can't take you how many times I have missed my train because only a few people in line don't know how to use the machine and half the machines are out of service! Game changer indeed!

jfc1138

slprescott said:

Good... but too slow?

Apple Pay                    = 5 seconds (approx time to complete a payment transaction, not just recognize the NFC-based iPhone)
DC Metro smart card  = less than 1 second

I love NFC-based Apple Pay, but I worry that slow response at a busy subway station would trigger people to complain, "This Apple solution is too slow!"

I've used that metro card and had it take a hell of a lot longer than a second, when it worked at all. Granted still a lot better than the previous stupid feed the card into the machine silliness or the multipole swipes of NYC Metrocards....