So, you want to be a card issuer?

shopping business money pay

Card issuing seems to be hot right now. Despite the rise of alternatives to card payments, many Fintech’s appear intent on adding payment cards to their product portfolios. And it is not just the “me too” start-up banks.

For example, some international remittance services are adding payment cards to their offerings.  This allows customers to spend the money they receive directly but also means that customers do not withdraw funds immediately upon receipt. This extends the customer relationship adding value to both the customer and the Fintech.

How the past (ticketing technology) can still be relevant in the future.

blurred motion of illuminated railroad station in city

Last week, I attended the excellent Transport Ticketing Digital Summit which focused on advances in fare collection and Mobility as a Service (MaaS).

Contact-free public transport (Part 3)

person holding smartphone

This is the third of three blogs about technologies to support contact-free use of public transport.

The radio again – I hear that the Transport Minister for England had just reported that there have been fewer than 400 fines for people failed to wear face covering on public transport. More than 115,000 travellers have been stopped and reminded that face coverings are mandatory, and 9,500 people prevented from travelling.

Contact-free public transport (Part 2)

photo of a bus

This is the second of three blogs about technologies to support contact-free use of public transport.

Public transport operators have been making great efforts to make public transport safe during the pandemic. TfL recently launched a new app that makes it easier for passengers to plan their travel and avoid routes where they might come close to large numbers of people. There are claims that the rate of uptake of contactless by passengers has increased significantly since the pandemic and the demand for contact-free transactions on public transport. Visa recently offered a graph relating to global public transport contactless transactions. However, it is not clear what the actual contactless usage is since they are hidden behind month-on-month percentage increases which look enormous when the previous months had fallen off the proverbial cliff.

Contact-free public transport (Part 1)

buildings city clock downtown

This is the first of three blogs about technologies to support contact-free use of public transport.

I heard on the radio that, despite ministers encouraging people in England back to work in their offices, most are staying at home. Commuter trains are about one-third full and buses are about 40% full. During the COVID-19 pandemic, demand for public transport fell off a cliff as governments told their people to stay at home.  A major part of encouraging travellers to use public transport is the provision of systems that allow social distancing of passengers from staff, ideally eliminating the need to exchange physical tickets, cash and paper receipts.

The “isRecovered?” attribute

So far the tech giants seem to be the coronavirus winners, with a massive surge in digital communications and online orders. The impact on lift sharing companies is less clear.

The guidance from both Uber and Lyft says that if they are notified (by a public health authority) that a driver has COVID-19 they may temporarily suspend the driver’s account. It is not exactly clear how this would work.

That got us wondering whether digital identity systems, that we spend so much time talking about, could help. It seems to me there are two potential identity questions here:

1.       Is the driver who Uber or Lyft thinks it is?

2.       Does the driver have coronavirus?

The first question should be important to Uber and Lyft at any time. Ok, for the moment they want to be sure that they know who is driving to give them a better chance of knowing if the driver has the disease. But there are all sorts of other reasons why they might want to be sure that the driver is who they think it is – can the person legally drive for one.

The second question is harder. Just because the driver doesn’t have the virus today, doesn’t mean he or she won’t have it tomorrow. Maybe, perhaps the ability to share an isRecovered? attribute that says “I’ve recovered from the illness” would be useful when we start to see the light at the end of this tunnel we are entering. And the ability to share that anonymously might be helpful too – providing assurance to both driver and passenger.

All this to one side, the guidance from both Uber and Lyft outlines financial measures they are putting in place to provide security to drivers that self-isolate. That is a great example of responsibility providing the incentive and support required to allow their drivers to do the right thing.

Transport Ticketing Global 2020

We were at TTGlobal (28-29 Jan 2020) this year for the fifth year running. It was a much bigger event in Kensington Olympia, London, with around 30% more attendees. This blog is a summary of how the two days went for us.

Day 1

The Plenary session had a surprise guest in the form of the Future of Transport Minister, George Freeman. He spoke eloquently about subjects very close to our hearts:

  • Seamless end-to-end ticketing
  • Integrated PAYG
  • Sustainability: he explained that the emissions of the transport sector are expected to double by 2050 unless something radical is done.

I have written before about a shift in government thinking about mobility that seems to be taking place. Let’s hope this signals more of the same and is followed with positive, decisive action.

Our CEO, Neil McEvoy, moderated the plenary panel on ‘the role of ticketing and urban transport policies in delivering MaaS,’ with panellists from:

  • Visa
  • Mastercard
  • Government of the city of Buenos Aires, Argentina
  • Dallas Areas Rapid Transit, USA
  • Uber

Picture1

It was felt that to meet public policy objectives on congestion, air quality and CO2 emissions, facilitating multi-modal, door-to-door, everyday journeys would be key. Facilitating journeys outside of a traveller’s home city or region is welcome but won’t meet wider goals alone.

Highlight of the rest of Day 1 included:

  • An update on the Future of Oyster from Transport for London. There are still no plans to turn it off, though the uptake of bank cards by the travelling public continues to rise steadily.
  • The Masabi presentation about Fare Payments as Service which was the subject of a recent podcast I made with Ben Whitaker.
  • Contactless bank card ticketing has come of age. There were lots of presentations about cEMV roll outs. Visa announced that they have solutions to the classic problems with bank cards (they don’t work for the unbanked or family groups). Contact them if you want to learn more.

Day 2

I moderated a panel about the future of ticketing technologies with panellists from:

  • Deutsche Bahn, Germany
  • GVB, Netherlands
  • The Human Chain, UK
  • Department for Transport, UK

Picture2

We made a whistle-stop tour of up and coming technologies relevant to the different actors in the Mobility ecosystem, ranging from big data and augmented reality for Data Providers to Open Banking and distributed ledger technology for Maas Providers.

Other highlights for me from Day 2 included:

  • The UK’s Rail Delivery Group’s presentation on developing insight from barcode data, linking tickets sold with tickets scanned to inform revenue protection.
  • An update from Transport for the North on their Integrated and Smart Travel activities.
  • A presentation by MOTC about the difficulties faced by Qatar which currently is massively dependent on the private car and their plans to address the congestion problems they face.

Exhibition

I spent most of my time in the exhibition hall talking with contacts and vendors. I wish there had been time to attend more of the presentations.

I took the opportunity to record another podcast while at the event. This time with Eric Reese, CEO of ByteMark over from New York.

Awards

Once again, I was delighted to be one of the panel of judges for the awards presented at the Gala Dinner and Awards held at the Science Museum and hosted by comedian Phil Wang. It was decided by the judges to introduce a Highly Commended tier this year within each award category. This is in recognition that the standard or submissions was generally high. So, while Moscow won the Best Smart Ticketing Programme 2020, both of the following were Highly Commended:

  • Flowbird Transport Intelligence & Lothian Buses for their smooth role out of contactless payments card acceptance in Edinburgh in time for the Edinburgh Festival dramatic rise in population and bus usage;
  • Rail Delivery Group & Cubic Transportation Systems for the delivery of barcode ticketing under budget and achieving collaboration between 19 Train Operating Companies.

Overall, the event was a great success and great fun to be part of. Here’s to next year.

At Consult Hyperion we have experience globally with transport and mobile ticketing and deploying the latest technologies. If you would like to learn more, give us a call.

Consult Hyperion’s Live 5 for 2020

At Consult Hyperion we take a certain amount of enjoyment looking back over some of our most interesting projects around the world over the previous year or so, wrapping up thoughts on what we’re hearing in the market and spending some time thinking about the future. Each year we consolidate the themes and bring together our Live Five.

2020 is upon us and so it’s time for some more future gazing! Now, as in previous years, how can you pay any attention to our prognostications without first reviewing our previous attempts? In 2017 we highlighted regtech and PSD2, 2018 was open banking and conversational commerce, and for 2019 it was secure customer authentication and digital wallets — so we’re a pretty good weathervane for the secure transactions’ world! Now, let’s turn to what we see for this coming year.

Hello 2020

Our Live Five has once again been put together with particular regard to the views of our clients. They are telling us that over the next 12 months retailers, banks, regulators and their suppliers will focus on privacy as a proposition, customer intimacy driven by hyper-personalisation and personalized payment options, underpinned by a focus on cyber-resilience. In the background, they want to do what they can to reduce their impact on the global environment. For our transit clients, there will be a particular focus on bringing these threads together to reduce congestion through flexible fare collection.

So here we go…

1. This year will see privacy as a consumer proposition. This is an easy prediction to make, because serious players are going to push it. We already see this happening with “Sign in with Apple” and more services in this mould are sure to follow. Until quite recently privacy was a hygiene factor that belonged in the “back office”. But with increasing industry and consumer concerns about privacy, regulatory drivers such as GDPR and the potential for a backlash against services that are seen to abuse personal data, privacy will be an integral part of new services. As part of this we expect to see organisations that collect large amounts of personal data looking at ways to monetise this trend by shifting to attribute exchange and anonymised data analytics. Banks are an obvious candidate for this type of innovation, but not the only one – one of our biggest privacy projects is for a mass transit operator, concerned by the amount of additional personal information they are able to collect on travellers as they migrate towards the acceptance of contactless payment cards at the faregate.

2. Underpinning all of this is the urgent need to address cyber-resilience. Not a week goes by without news of some breach or failure by a major organisation putting consumer data and transactions at risk. With the advent of data protection regulations such as GDPR, these issues are major threats to the stability and profitability of companies in all sectors. The first step to addressing this is to identify the threats and vulnerabilities in existing systems before deciding how and where to invest in countermeasures.

Our Structured Risk Analysis (SRA) process is designed to help our customers through this process to ensure that they are prepared for the potential issues that could undermine their businesses.

3. Privacy and Open Data, if correctly implemented and trusted by the consumer, will facilitate the hyper-personalisation of services, which in turn will drive customer intimacy. Many of us are familiar with Google telling us how long it will take us to get home, or to the gym, as we leave the office. Fewer of us will have experienced the pleasure of being pushed new financing options by the first round of Open Banking Fintechs, aimed at helping entrepreneurs to better manage their start-up’s finances.

We have already demonstrated to our clients that it is possible to use new technology in interesting ways to deliver hyper-personalisation in a privacy-enhancing way. Many of these depend on the standardization of Premium Open Banking API’s, i.e. API’s that extend the data shared by banks beyond that required by the regulators, into areas that can generate additional revenue for the bank. We expect to see the emergence of new lending and insurance services, linked to your current financial circumstances, at the point of service, similar to those provided by Klarna.

4. One particular area where personalisation will have immediate impact is giving consumers personalised payment options with new technologies being deployed, such as EMV’s Secure Remote Commerce (SRC) and W3C’s payment request API. Today, most payment solutions are based around payment cards but increasingly we will see direct to account (D2A) payment options such as the PSD2 payment APIs. Cards themselves will increasingly disappear to be replaced by tokenized equivalents which can be deployed with enhanced security to a wide range of form factors – watches, smartphones, IoT devices, etc. The availability of D2A and tokenized solutions will vastly expand the range of payment options available to consumers who will be able to choose the option most suitable for them in specific circumstances. Increasingly we expect to see the awkwardness and friction of the end of purchase payment disappear, as consumers select the payment methods that offer them the maximum convenience for the maximum reward. Real-time, cross-border settlement will power the ability to make many of our commerce transactions completely transparent. Many merchants are confused by the plethora of new payment services and are uncertain about which will bring them more customers and therefore which they should support. Traditionally they have turned to the processors for such advice, but mergers in this field are not necessarily leading to clear direction.

We know how to strategise, design and implement the new payment options to deliver value to all of the stakeholders and our track record in helping global clients to deliver population-scale solutions is a testament to our expertise and experience in this field.

5. In the transit sector, we can see how all of the issues come together. New pay-as-you-go systems based upon cards continue to rollout around the world. The leading edge of Automated Fare Collection (AFC) is however advancing. How a traveller chooses to identify himself, and how he chooses to pay are, in principle, different decisions and we expect to see more flexibility. Reducing congestion and improving air quality are of concern globally; best addressed by providing door-to-door journeys without reliance on private internal combustion engines. This will only prove popular when ultra-convenient. That means that payment for a whole journey (or collection or journeys) involving, say, bike/ride share, tram and train, must be frictionless and support the young, old and in-between alike.

Moving people on to public transport by making it simple and convenient to pay is how we will help people to take practical steps towards sustainability.

So, there we go. Privacy-enhanced resilient infrastructure will deliver hyper-personalisation and give customers more safe payment choices. AFC will use this infrastructure to both deliver value and help the environment to the great benefit of all of us. It’s an exciting year ahead in our field!



MaaS Solutions Using Mobile Wallets

I was delighted to have the opening speech at the Transport Card Forum (TCF) in London in which I talked about Mobile Wallets. At the previous meeting there was a presentation about mobile ticketing and a member of the audience asked why there was no mention of the use of mobile wallets. I tended to agree since most of our mobile ticketing projects have been about clever ways of using mobile wallets to get around the technical barriers associated with barcodes, HCE and the like.

There is a problem which Transport Scotland have termed the “Glasgow Conundrum”. Within one city or region, a passenger door-to-door journey might consist of several legs and each of these legs might be services by a different transport operator. Each operator might use a different ticketing technology and accept payments in different limited ways. From a customer point of view, it stinks; integration is what they need. But it is clear that there are two distinct questions:

  1. 1. How can the customer pay for travel rights?
  2. 2. How can the customer prove they own travel rights when travelling?

Payments

Ideally the payment mechanism would be decoupled from the type of travel rights and the transport operator. MaaS Providers should be free to accept payments from whatever means suit the customers. If you are interested in this aspect of things, download our white paper: MaaS Payments, a billion dollar opportunity. The download includes a discount code for Transport Ticketing Global 2020 where I will be chairing a panel again in January and judging the awards entrants.

Travel rights

The multiple legs that make up the end-to-end journey might be thought of as what the rail industry called ‘split ticketing’. Rather than having a single ticket, you can buy single tickets for each part of the journey and sometime (usually where Train Operator boundaries are crossed) this can work out cheaper. Mobile apps are very good at hiding this sort of complexity from the passenger and one can imagine that, using geolocation services, the app can decide which ticket should be presented when in order to sail through the gates and turnstiles. And all the split tickets could be stored in the mobile wallets.

Meanwhile, the sales of tickets are diminishing as the areas offering Pay As You Go (PAYG) continue to expand. Project ‘Oval’ round London is seeing the imminent expansion of PAYG contactless bank cards as far as Reading on the new Elizabeth Line from January 2020. For various reasons, Oyster will not be able to be used as far out. So, once again we are seeing contactless bank card technology reaching further than Oyster. There are government plans (election permitting) to add hundreds more rail stations to the TfL PAYG scheme.

London is not the only game in town, and we see other PAYG schemes around the UK. The continued expansion of PAYG represents improved customer experience but is not great news for retailers of travel rights unless they can find a way to sell PAYG and make a profit.

If the PAYG area accepts contactless bank cards (like London), then mobile wallets can be used to allow passengers to travel seamlessly in these areas. Citymapper launched a plastic prepaid Mastercard for this purpose for residents of London only in April 2019. It has recently become available as a virtual card using mobile wallets on both Android and Apple iOS devices. By contrast, the UK smart ticketing standards, ITSO, has partnered with Google and Google Pay wallet has been customised for ITSO so that now ITSO tickets can be loaded into the mobile wallets of Android phones only.

So, lots of choices. And the Glasgow Conundrum continues to some extent, though I can see MaaS Providers apps being able to hide this complexity if they get it right. I was very happy to recently have Ben Whitaker round at Chyp towers explaining Masabi’s take on automatic fare collection using mobile apps. We made a podcast about their Fare Payments as a Service and Ben’s views on where MaaS is going which I found very interesting.

At Consult Hyperion we have a lot of experience with smart ticketing, mobile ticketing and, in particular, mobile digital wallets. If you would like to learn more, give us a call.

Digital Wallet Ticketing

I’ve just been in Bristol at the annual Transport Card Forum (TCF) two-day event. I was on the agenda as chair of Working Group 27 giving the final report on progress. The report will be going to DfT shortly and thereafter available to TCF members via the website. I’ve been attending TCF for many years and it is impossible not to notice how very slowly things change in transport ticketing.

One piece of our recent advice to a sub-national transport body, when hired to outline their smart ticketing strategy can be summarised as: do not seek government funding to implement a region-wide (expensive) smart ticketing solution, but rather look at what already exists and how these ticketing schemes might be brought together to meet the needs of the various travelling customer types in the region. In this context, I was pleased to hear mention of software development kit (SDK) offerings from Masabi and FAIRTIQ giving me hope that the transport ticketing industry is moving in the right direction. For example, Masabi using their SDK to insert their ticketing technology into the Uber app for trials in Denver, Colorado.

A recurring theme at the event was operators reporting how PAYG solutions are proving popular with customers and how they are eroding the other forms of ticketing such as season tickets. This is an increasing area of concern for clients we are working with, most notably in terms of cash flow and forecasting but also technically. Some of our current work is helping clients deal with the array of ticketing solutions they are operating and how to rationalise these in the light of the way that the automated fare collection (AFC) industry is moving and responding to customer needs. Consumer demands will continue to drive change in their purchase patterns as flexible and remote working opportunities increase.  

It is not uncommon for a transport operator to support all of the following:

  • Paper tickets as the only medium interoperable at all acceptance points for all customer types.
  • Legacy smart card solutions based on 1990s technologies where the operators were focussed on owning the customer by issuing them with a smart card.
  • Barcodes as a cheaper alternative to smart cards that can also go paperless if delivered to mobile phones.
  • Mobile ticketing solutions based on bar code or flash pass, sometimes with low security levels and high fraud levels. Some using the ‘software only’ HCE innovations which Apple will not currently allow.
  • Open-loop (EMV bank card) PAYG solutions which have grown out of our work with TfL in 2008-14. These are intended to increase ridership and reduce costs by using the bank card in the customer’s pocket, but because they are one card per passenger, they do not cater for group tickets or for those not having (e.g. children) or not wishing to use bank cards. This could be addressed on buses by introducing a ‘retail model’, but this would require driver interaction to determine the price of the ticket before purchase and slow down bus boarding.

Operators are transport providers and their core business is providing transport services, not running ticketing solutions. The last thing they want is to be maintaining systems that have to be able to handle multiple different front ends, though many of them find themselves doing so. The classic example is TfL’s intention to switch off Oyster when open-loop was up and running, but they not yet managed to achieve this.

Our recent work with clients about how to use Digital Wallet Ticketing in a customer’s smart phone to unify their disparate ticketing solutions is proving popular.  This has been both in sports stadiums and transport ticketing. Digital Wallet Ticketing was not much discussed at TCF19, which I guess is a sign of how slowly things move within the transit ticketing community. We believe DWT is the future.

We have a wealth of experience over several years of designing and building DWT solutions. Let us know if you’d like a chat about how this might work for you, be it payment, identity or ticketing.


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