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Smart Cards for Smart Commuters

The Massachusetts Bay Transportation Authority and other transit operators plan to deploy RFID-based fare collection systems in 2004. The technology reduces costs, and customers love the convenience.
By Bob Violino
Sep 07, 2003—By Paul Prince

Sept. 8, 2003 - Next fall, many Boston-area commuters will be able to pass through a subway turnstile or board a bus with just a wave of their hand instead of plunking down a token or swiping a card. That’s because the Massachusetts Bay Transportation Authority (MBTA) is changing its fare collection system from one that takes tokens and magnetic (mag) stripe tickets to one that accepts contactless smart cards.
Customers like the speed and convenience of smart cards

The fourth-largest mass transit operator in the United States, with nearly 1.1 million daily riders on its buses and subways, the MBTA is expected to spend $75 million on new smart-card readable equipment, including 500 fare vending machines, 535 turnstiles and automatic gates, and 1,700 validating fare boxes on buses and trolleys. The first installations are scheduled to take place in September 2004, and the remainder will be installed progressively until September 2005, according to Mike DeAngelis, director of the automated fare collection project at MBTA.

While acknowledging the project’s high cost, DeAngelis rattles off a list of benefits that justify the expense: "Lower maintenance and ticket-distribution costs, the potential for partnerships down the road, the attractiveness for our customers…And it seems to be—at least in transit—the wave of the future."

The MBTA isn’t the only transit operator that’s riding that wave. The Washington Metropolitan Area Transit Authority (WMATA) in Washington, D.C., launched a system-wide smart card rollout in May 1999. In November 2002, the Chicago Transit Authority (CTA) became the second major public transit operator in the United States to deploy a fare collection system that accepts contactless smart cards. And implementations are planned or underway in 14 other U.S. metropolitan areas, including Atlanta, Houston, Los Angeles, Minneapolis-St. Paul, San Francisco and Seattle.

Contactless payment systems have been up and running in Asia for almost a decade. Transit operators in Seoul and Pusan, Korea, were the first ones to install smart-card systems in the mid-1990s, followed by Hong Kong, which launched its Octopus system in 1997. Since then, Hong Kong has issued more than 9 million Octopus contactless smart cards, according to the Smart Card Alliance, a not-for-profit, multi-industry association.

While the Washington Metropolitan Area Transit Authority has only 350,000 SmarTrip cards in circulation, those cardholders account for 50 percent of peak-period weekday rail riders. The WMATA continues to add additional SmarTrip customers at a rate of 7,500 a month. Commuters also use the SmarTrip cards to board WMATA-run buses and park their cars in WMATA-managed parking lots throughout the region.

"We hit a home run with our consumers, there’s just no question about it," says Greg Garback, executive officer of WMATA’s department of finance. "Our card is extremely attractive to our bread-and-butter, our regular commuters. We don’t invest in anything to market the cards; people just naturally gravitate to them. They watch other people use them, and then they ask for them."
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