'CLEAR BENEFITS': Lord Adonis sees paper tickets reaching the end of the line as NFC takes hold

Within the next five years passengers on public transport in England's major urban areas will be able to travel without a paper ticket, transport secretary Andrew Adonis has announced.

England's nine largest urban areas are to receive £20m over the next five years from the Department for Transport in order to introduce NFC-compatible ticketing systems and all of the UK will be helped to switch to the new system by 2020. Each area will be required to submit spending plans for the funding in early 2010, which will need to be approved by the Department before funding is paid out.

To motivate bus operators, the Government has also announced an 8% increase in the Bus Service Operator Grant (BSOG) for those that install the new ticketing technology on their buses. Together with a second grant for bus operators who install GPS technology, the funding is worth around £1,000 per bus each year.

"Smart tickets — a system where a ticket is stored on a microchip, on a smartcard (like Oyster) or even on a phone or bank card — can give improved journey times and faster, hassle-free purchasing and use of tickets, with associated benefits for local government and operators," says the Department for Transport. "The Government estimates that the benefits of 'integrated smart' ticketing, that allows travel across operators and across modes, could be worth over £1bn per year."

The £20m smart ticketing fund will be available in the nine largest urban areas in England outside London — Greater Manchester, the West Midlands, Tyne and Wear, Merseyside, South Yorkshire, West Yorkshire, Nottingham, Leicester and Bristol. The funding will go towards implementing ticketing schemes that adhere to the UK's national ITSO standard, which is compatible with NFC and is also being implemented by British rail operators.

The key benefits of this approach, says the Department for Transport, are:

• Allowing passengers to load tickets or credit in advance of travel, speeding up boarding times and reducing queuing.
• Fraud and security — smart tickets are far harder to replicate and can be electronically 'killed' the moment they are reported lost or stolen, with any remaining balance refunded
• Sophisticated rules can be applied to 'cap' an individual's cost of travelling at a certain level so that they will always pay the best ticket price possible for the journeys they actually make.
• Operators will be able to run their own loyalty schemes and offer ticket types to suit individual customers' needs.
• Joining up services through using smartcards for other products such as library membership, leisure centre entry, benefit entitlement, parking, bike and car hire, and even lift share arrangements.

A recent survey commissioned by the Department for Transport indicated that integrated smart tickets have the potential to attract as many as 25% of current non-public transport users onto the system and that a pre-pay smartcard with a daily cap could increase some individuals' trip rates by more than 14%.

Research commissioned by the Department also suggests that some bus 'dwell times' could reduce by 50% if there was full take-up of smart ticketing technology. In London, where the first NFC-compatible ticket barriers are to be introduced on the underground from 2011, the introduction of Oyster enabled 35 passengers per minute to go through the ticket gates compared to 15 passengers per minute previously.

"The benefits of smart ticketing to passengers are clear — quicker, easier and potentially better value journeys on trains, buses and trams, whichever company runs the service," says the transport secretary. "We could even see the death of the paper ticket as direct payment and mobile phone technology picks up pace."

"If passengers had smart tickets they'd almost certainly use public transport more," he added. "Getting this technology on-board will help reduce congestion and pollution, improve the local environment, and help us, operators and local authorities provide the 21st century public transport network that we know people want."

Readers can download full details of the new Smart and Integrated Ticketing strategy from the Department for Transport's website.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• National ticketing project could use NFC and contactless to save £2bn a year, says UK’s Dept for Transport
• UK Department for Transport completes NFC bus ticketing trial
• UK’s Dept for Transport reports on 18-month NFC ticketing project
• Paris transport operators to launch NFC ticketing from the end of 2010
• Telecom Italia and ATM to launch NFC ticketing service in Milan

NFC NEXT? O2 describes its new prepaid debit cards as 'the first in a suite of financial products'

Telefónica's UK operation has partnered with NatWest bank for its first payments offering. Although the new O2 Money service currently includes just two low-tech prepaid card offers that add the simple twist of sending the cardholder a text message each time they are used, O2's chief executive Ronan Dunne has clearly signalled that this is just the start of the mobile network operator's move into the payments arena.

"O2 has a strong and successful track record of innovation and O2 Money will represent a launchpad into a wide range of mobile banking services", says Dunne. "We believe that we are at the start of a journey towards the coming together of phone and wallet and we intend, through O2 Money, to be at the forefront of this trend. This launch represents an important step towards O2 becoming a leading service provider with mobile at its core."

"The strength of our brand and relationship with our customers gives us the ideal opportunity to take O2 into a completely new market," Dunne added. "By bringing a fresh, transparent and customer-focused approach to pre-paid cards, we plan to drive this market and take a significant share."

Quizzed by reporters on the future direction of O2 Money, Dunne confirmed that O2's NFC technology is now ready to roll out and that the operator is heavily involved in pushing towards the deployment of NFC services in the UK.

"As you know O2 led trials [of Near Field Communication technology in mobile phones] last year, and we engaged with a number of commercial organisations in that area," Dunne told reporters, according to TechRadar:

"Customers loved it, and the challenges now are with electronic point of sale capability, and deployment across mass retail.

"We'll be talking to large retailers, grocers for instance, also people in the transport industry [about bringing the technology to market]."

O2 used around 500 people in the trial, which saw them using their mobile phone to make smaller payments, similar to Visa's Paywave system, and swapping an Oyster card for a phone in London too.

However, Dunne pointed out while NFC might be coming to fruition, the next stage of deployment is far from a foregone conclusion:

"It's one of those situations where the technology is ready to go, but we need more deployment to get critical mass. We're confident you'll see substantial progress in that space, under the O2 brand, in the not too distant future.

"I think the wholly held industry view is that NFC has proven capability; we're just waiting for mass deployment of terminals and other key components.

NatWest has also signalled its readiness to adopt new ways of using the mobile channel to improve its service offering.

"More people than ever are using their mobile phones as a means of managing their money and NatWest is always looking at new ways of incorporating the mobile phone into our services, to ensure our customers can interact with us as easily as possible," says Helen Page, managing director of marketing and innovation at NatWest.

"These cash cards, delivered in partnership with O2, are the first step on the road towards a more advanced mobile banking service, and the closer alignment between mobile phones and payment technology."

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• Telefónica O2 launches its first commercial NFC service — and sets out strategy for future deployments
• Telefónica O2 joins GlobalPlatform
• Telefónica O2 to launch multi-function NFC trial in Czech Republic
• Telefónica and Sermepa launch NFC pilot in Spain
• Telefónica Movistar, La Caixa and Visa begin pre-commercial NFC pilot in Spanish resort of Sitges

SQUARED AWAY: Cubic's deal with Vivotech will see transit operators offered the chance to upgrade 60,000 readers to handle NFC

Cubic Transportation Systems has signed an exclusive software development and licensing agreement with Vivotech that will see its Tri-Reader card processing unit being upgraded to accept payment via contactless bank cards, prepaid cards and NFC handsets.

"With more than 50 million contactless bank cards issued in the US and growing interest among transit operators to add bank card acceptance as a way to pay fares for train and bus rides, this enhanced feature set will add a new level of convenience for those passengers carrying such products," Cubic says. "Transit patrons will have the ability to tap a variety of products from various issuing groups as they board trains and buses."

Under the agreement Cubic will integrate Vivotech's contactless payment software into the latest generation Tri-Reader platforms and will obtain type certification for MasterCard Paypass, Visa PayWave, American Express and Discover cards.

Tri-Reader will then be able to act as an all-in-one contactless reader able to handle contactless bank cards, prepaid products such as First Data's Go-Tag and NFC transactions as well as currrently issued transit cards and those conforming to national transit standards.

Cubic has an installed base of over 60,000 Tri-Readers across 17 major markets around the world. London's Oyster card system, Washington's SmarTrip system and New York/New Jersey's SmartLink system are all supported by Tri-Reader technology.

"Cubic's commitment to providing open standards and interoperability for the transit market is furthered by this agreement," says Steve Shewmaker, president at Cubic Transportation Systems. "It also represents the cross-industry collaboration that is needed between the core suppliers to the transit market and those serving the electronic payments industry."

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• Montreal picks Oberthur for contactless transit ticketing system
• China UnionPay begins major expansion of NFC project
• Card and chip suppliers to offer open transport ticketing standard
• First Data to offer Tyfone’s SideTap NFC MicroSD cards, will run first trials in US from mid-2010
• Eagle Eye Solutions and Vivotech to offer retailers NFC mobile vouchers

The ability to switch to NFC and other next generation transaction technologies was a key factor in the renegotiation of Transport for London's Oyster ticketing contract, it has become clear this week.

O'TOOLE: 'As the market evolves we want to make sure we are part of that'

"The MD of London Underground Tim O'Toole said the ability to use near field communication-enabled phones and other next-gen ticketing tech on London's public transport will be enabled by the new deal," says technology news service Silicon.com.

In August 2008 TfL announced it was terminating early its existing contract with TranSys for the delivery of the Oyster ticketing system. In October, TfL reported to the London Assembly on its future ticketing plans and, in November, it signed a new ticketing deal with EDS and Cubic (two of the four members of the TranSys consortium) that, this time, gives TfL full control of the Oyster brand.

Now fuller details are beginning to emerge of what that new deal might mean. Tim O'Toole, London Underground's managing director, told Silicon.com this week:

The problem with the prior contractual arrangement was that once we had made the jump to Oyster and it was up and running there was little incentive to jump to next-generation electronic ticketing like near field communications.

The new contractual structure will allow for great flexibility and more changes.

As the market evolves we want to make sure that we are part of that and it is about putting a system in place that allows for that to happen.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• Transport for London buys Oyster brand name, plans extra services and move to mobile ticketing
• TfL reports to London Assembly on future of Oyster
• Mobile technology to drive consumer interaction at London Olympics
• NFCW reader meetup: Tuesday 27 January in London
• UK government to fund switch to NFC-compatible transport ticketing

At a meeting of the London Assembly’s Budget and Performance Committee on October 21st, Transport for London representatives confirmed they are looking at various technologies and providers to take over from its existing Oyster prepaid contactless card system in 2010.

Will Judge, head of future ticketing at TfL, said they wanted the new ticketing system to be contactless, fast and convenient and explained that new advances in technology meant the system could be delivered on a smart card – like the Oyster card – or on a phone or bank card.

When TfL considers the new technology, Judge added, they would not try to do it in-house, but would take advantage of good practice elsewhere. TfL also told the Committee they are investigating whether Oyster – and its successor – could be integrated with other parts of London transport.  It is hoped that Oyster will be available on the capital’s riverboat services next year.

Commenting on the decision to terminate the contract with TranSys, Judge said that TfL believed it would save millions of pounds by moving to a more conventional contract than the one agreed for Oyster. He said TfL intended to break the new contract up into modules and let each bit individually.

Assembly Members also heard that the new ticketing system could have a different name and that the Oyster brand could be lost forever.

“This Committee is interested to hear about the new technologies that TfL is exploring for the delivery of their new ticketing system," concluded John Biggs AM, Chair of the London Assembly Budget and Performance Committee. "We will look with interest during our examination of TfL’s business plan to see what level of savings is achieved.”

Full video coverage of the meeting can be viewed on the London Assembly website, by clicking through to a webcast of the Budget and Performance Committee — 21 October.

A little background on the current status of Oyster:

• In August, TfL announced it was terminating early its existing contract with TranSys for delivering Oyster, after the system suffered a serious breakdown on more than one occasion.
• TfL executives have suggested at various industry meetings this year that they would like to move away from a proprietary system where they act as card issuer and towards an open system built around contactless card standards where travellers could use their contactless bank card or NFC phone on London's public transport system.
• TfL ran the UK's first large-scale NFC pilot over six months from November 2007 in partnership with O2, Barclaycard, Nokia, Transys, Visa and AEG using 500 mobile phones with built-in Oyster card technology.
• In September, Barclaycard announced a plan to expand its OnePulse product, a three-in-one Oyster, credit card and prepaid card. "In time you won't have to carry a plastic credit card around with you if you don't want to, although some people will choose to for nostalgic reasons," said Barclaycard chief executive Antony Jenkins as he explained plans to move towards the introduction of  mobile phone-based services.
• TfL also ran an NFC-based smart poster trial in 2007 at Blackfriars station where travellers could get maps, directions and real-time travel advice transmitted to their mobile phones.

This article was first published at www.NearFieldCommunicationsWorld.com.

Related news:

• Transport for London buys Oyster brand name, plans extra services and move to mobile ticketing
• London Underground signals move to NFC
• Mobile technology to drive consumer interaction at London Olympics
• Orange and Barclaycard partner to launch NFC in the UK
• O2 Academy music venues to provide test beds for NFC