Visa rolling out payWave mobile phone payments in NY subway and taxis

Visa rolling out payWave mobile phone payments in NY subway and taxis


September 21, 2010

By Paul Miller

Read More: http://i.engadget.com/2010/09/23/visa-rolling-out-paywave-mobile-phone-payments-in-ny-subway-and/

Visa Inc. (NYSE:V) announced today that commuters in New York and Los Angeles can use the world's most popular way to pay – Visa – for bus, subway and train fares. In New York, Visa is allowing riders to pay using Visa payWave-enabled cards and mobile phones, while commuters in Los Angeles can use a special Visa prepaid card to ride the LA metro system. The programs in New York and Los Angeles are part of Visa's long-term strategy of extending the speed, security and convenience of Visa acceptance to new locations. As part of this strategy, Visa has successfully brought payment services to commuters in the world's most populous areas, including Kuala Lumpur, Seoul, Singapore, London and Paris. In driving acceptance at the mass transit fare gate, Visa is providing riders with a better way to pay by eliminating the time-consuming step of searching for cash to buy a ticket while minimizing cash handling costs for transit operators.

"Transit agencies the world over have one primary goal – to get their customers to where they need to go quickly and efficiently. What transit agencies and riders recognize is that using Visa on buses, subways and trains is the logical evolution in terms of improved speed, security and convenience," said Jim McCarthy, global head of product, Visa Inc. "For commuters, paying with Visa means no more fumbling for change or worrying about lost transit cards. For transit authorities, accepting Visa means better customer service, integrated collections and the potential for increased ridership."

The pilot program in New York uses Visa payWave technology, which is based on a small electronic chip embedded in a mobile phone or payment card that communicates securely with contactless readers at the fare gate and on the bus. Transit riders pay by simply holding their Visa payWave-enabled mobile phone or card near the designated reader at the fare gate. The program in Los Angeles is exclusive to Visa and started September 15, 2010 and is a system wide commercial implementation available to all riders of the LA Metro system. The TAP ReadyCARD combines Visa prepaid functionality with the LA Metro's TAP (Transit Access Pass) proprietary transit application on a single card.

As part of the company's ongoing effort to add ever greater utility to its core credit, debit and prepaid payment products, Visa is working closely to integrate its electronic payments network, VisaNet, with mass transit fare collection systems.

New York / New Jersey

Visa payWave, Visa's contactless payment application, is now accepted as part of a pilot payment program underway with New York City Transit, NJ TRANSIT and The Port Authority of New York and New Jersey.




[video=youtube;of2GBIqP9eA]http://www.youtube.com/watch?v=of2GBIqP9eA[/video]

The big problem with this implementation is that it ONLY accepts Visa, not MasterCard (or American Express). It would be pretty inconvenient if half of all transit systems accept only Visa and the other half only accept MasterCard, and you need to have multiple cards to ride different public transit systems.

They should also have Transit Cards that you can buy more rides on it.

andrewpmk said:

The big problem with this implementation is that it ONLY accepts Visa, not MasterCard (or American Express). It would be pretty inconvenient if half of all transit systems accept only Visa and the other half only accept MasterCard, and you need to have multiple cards to ride different public transit systems.

Click to expand...

Still better than today where you need a different card for every system.

Anyway, openpayment enabled cell phones typically allow you to load more than one card onto them. So, before swiping you will simply configure your phone to be in "Visa" or "Mastercard" mode.

I've been researching this for quite some time, but I cannot find out how these technologies handle transfers. It's great to be able to pay with your credit card, but if they don't accommodate the transfer rules then the value is very limited.

RedRocket191 said:

I've been researching this for quite some time, but I cannot find out how these technologies handle transfers. It's great to be able to pay with your credit card, but if they don't accommodate the transfer rules then the value is very limited.

Click to expand...

Relaxed credit card rules for small transactions allow the vendor (MTA or TTC in this case, Tim Hortons, Subway, etc. do magic too) to run their own partial backend and 'group' individual transactions into a single payment request from the credit card company.

What all this means is that they store the ride information on their backend for a non-specified period (I believe up to 1 week is allowed) to group them into a single charge on the card. This also gives them lots of time to add in reductions for transfers, multiple rides in a short period (day pass equivalent) and any other trick they can imagine and program prior to charging the card itself.

For retail outlets like Tim Hortons; they're trading security of the card being charge immediately for a lower transaction fee for frequent users and a bit of risk that their charge may not go through.

Thanks for clarifying, but it begs the question as to why none of the pilot projects have mentioned anything about transfers.

If there was a problem with transfers, I am sure you would have heard from it in the pilot projects.

To quote Donald Rumsfeld (and it makes me feel icky to do it), "absence of evidence is not evidence of absence."

The Metrocard, Presto and SmarTrip (all cards that I have used) know that when I make an on-street transfer from route to route I should recieve some sort of discount for the second leg. MTA / NJT's trial makes no mention of this ability, despite it being part of their fare rules. Is this because transfers were not part of trial, or is it because the system can't handle it?

The question I would like answered - are open payment systems able to fully replace tokens and transfers, or are they just a new way to pay your initial fare?