Accenture - apta.com · Accenture The Journey to Innovation: Paying the Fare By Any Other Name APTA 2014 Revenue Management March 17, 2014 Michael Wilson

Accenture

The Journey to

Innovation: Paying the

Fare By Any Other Name

APTA 2014 Revenue Management

March 17, 2014

Michael Wilson

Copyright © 2014 Accenture All rights reserved. 2

Customer Choice is Driving Fare Payment Innovation

Mobile Wallets

Other Players

Credential

Cards

(e.g., PIV)

Bank Cards

Agency Issued Media

http://www.enstream.com/en/index.php


Leading to Changes in the Payments Ecosystem Players

Payment

Ecosystem

Scheme

Issuer Acquirer

Merchant Customer

• Acquire Customers

• Issue or authorize media

• Assume tap/credit risk

• Bill/Accept Payment

• Provide Customer Service

• Promotes Brand

• Sets Standards and Rules

• Provides clearing system

• Acquire Merchants

• Provide processing technology

• Disburse funds

• Provide Merchant Customer

Service

• Uses media to pay for purchases

• Pre-(post-) pays bills

• Accepts media from customer

• Provides goods and services


Open Loop Is the Buzz But… What Does it Mean?

Closed Loop or Closed Payments

• A single organization acts as the

Issuer, Scheme and Acquirer –

effectively “closing” the system for a

single purpose and set of standards

Open Loop or Open Payments

• The Scheme defines a set of

interoperability standards that

“opens” the system to allow different

organizations to play the roles of

Issuer and Acquirer and work

together to implement the entire

payment ecosystem


1. Expanding Payment Choices Means Open Architecture

NOT Open Payments

Open Loop or Payments is NOT synonymous with Open Systems or

Open Architecture (referring to information technology).

Open Systems/Architecture

• Integration architectures that

enable flexible sharing of data

• Multi-vendor device integration

that commoditizes device supply

• Use of Commercially Available

Software to extend investments

• Focus on flexible configurability

versus custom code

• Promotes common practices that

are typically cross-industry


2. Transit Needs Special Features to Balance Speed

and Liability

Non EMV Cards • System based

Authorization

• Credit and Debit

• Time of Processing –

Medium

• Low Fraud Risk

• No Authorization

• Only Credit possible*


Fast

• Highest Fraud Risk

• Need to manage own

‘hot lists’

• Implications for

timing of transaction

clearing

EMV Cards • System and Card

based Authorization

• Credit and Debit


Very Slow

• Lowest Fraud Risk

• Card based

Authorization


Fast

• EMV Counters can

get tripped

• Medium Fraud Risk

• Need to look at

‘deferred online’ for

trip counters

• Plus same

implications as non-

EMV

Offline Online

(with Acquirer)

Implications

for Transit


3. Not Everyone Can nor Wants to Use Bank Cards

Requiring Multi-Payment Thinking

Base: 460 (all customers)

Source: Future of Transportation Project – City of London – March 2010

Oyster surveyed customers why they like a Transit Card

14%

1%

1%

3%

11%

11%

15%

15%

22%

24%

27%

28%

31%

Other

TfL may make me

I don't have a bank account / credit or debit card

I don't trust banks

I trust TfL

More reliable

Helps me manage my travel budget

Speed / it's quicker to use

Don't have to carry cash

Safer/more secure

I'm familiar with Oyster / like Oyster and don't want to change

Easier to use

More convenient


Transit Agency Environment

4. Security and PCI Obligations Increase Requiring

New Protections

Acquirer Environment

Acquirer Card Network Issuer

Token Vault Tokenization & Encryption from device to vault

removes the CDS from PCI scope

Tokenization & Encryption

Issuing

Entity

MetroNet CDS Validator


5. Open Loop Doesn’t Mean that Contactless Cards

Issuance is Pervasive

Europe

5 EMV – Contactless Penetration – 1.7%

(2009)

Credit

Debit Auth

entication

4 EMV – CHIP Penetration – 52%

(2009)

Credit

Debit

3 RFID – Contactless Penetration – 3.1%

(2009)

Credit

Debit

2 Magnetic Stripe Penetration – 100%

(2009)

Credit

Debit

1 Embossing Penetration – 100%

(2009)

Credit

Debit X

X U.S.

Info

rmation


6. Mobile Ticketing Platforms Don’t Create A Holistic

Customer Experience

• How can multi-modal travel be

integrated – from Regional Rail to

Subway or Bus?

• How can a customer manage their

account using multiple fare

payment preferences?

• What happens when a customer

moves from Mobile to Twitter,

Facebook, Website, IVR or even

the Phone?

• What happens when the Mobile

Ticketing players change?

An omnichannel relationship that thinks beyond transactions to

relationships with result in a personalized customer experience.


7. Customers Can Be Confused and Resistant to Changing

Goals

Awareness

Adoption

Knows Media Types Knows Benfits

How To Load How To Obtain

inComm

Integrated Communication and Education Plans


In Summary – Innovation is Now a Constant Reality

Customer Choice is Driving Fare Payments Innovation

• New Payment Options Continue to Expand

• Payment Ecosystem is Changing and Responding

• Creating New Terms that Can at Times Create Confusion

Leading to Several Implications for Transit

1. Open Architecture provides long-term payment flexibility

2. Special features are needed to balance speed with liability

3. A diverse population means diverse payment choices

4. Modern PCI and security thinking is required

5. Partnerships are needed to expand contactless card deployment

6. An omnichannel strategy enables personalized customer relationships

7. Customer education and adoption must be an early focus


Thank You

Contact Details

Michael Wilson – Managing Director, Public Transport

[email protected]

(416) 312-7539

Jane Matsumoto – Sales Director, Accenture Software

[email protected]

(310) 971-3394

John Vasilj – Business Development Director, Public Transport

[email protected]

(312) 907-3604

mailto:[email protected]



Documents

Accenture - apta.com · Accenture The Journey to Innovation: Paying the Fare By Any Other Name APTA 2014 Revenue Management March 17, 2014 Michael Wilson