T-FLEx October 2007 Workshop

The Future of Fare Collection

Ed Oliphant, CFO

Nashville MTA

October 29, 2007

About Nashville MTA 8.5 million passenger trips annually

Fleet of 137 transit buses, 62 paratransit vans

GFI Odyssey Fareboxes

Operate a pulse system with AM and PM peaks

Utilize Smartcard technology through employees ID and the Easy Ride Transit Benefits Program

Beginning AVL implementation, although not necessary for credit card acceptance

Overview What are the issues associated with

accepting open system cards (credit cards) at the customer point of entry on-board buses in an off-line environment?

Impact on Operations

Impact on Maintenance

Impact on Accounting

Cost of Implementation

Operational Pro’s & Cons

Very little bus operator training Faster boarding time Operating off-line vs on-line real time

(AVL) Boarding times will improve as long as it is

in an off-line environment Transaction speed needs to be 300ms or

less Training for Customer Service &

Accounting End of day probe time

Maintenance Issues

Hardware and equipment requirements Upgrade Farebox Software Upgrade probing speed New maintenance procedures

Potential for lost information ?

Accounting Considerations

Picking the 3rd party processor

Farebox software must be able to communicate with 3rd party processor

Transactions should be sent to 3rd party processor daily (not necessarily processed daily)

Processor must acknowledge and confirm receipt of transactions

3rd party processor must provide back-up from transactions processed that can be reconciled to farebox software transactional data

Accounting Considerations continued Level of Risk in Off-line Scenario

How will bad/stolen cards be identified? Immediate validity checking (expiration, card

type) 3rd party processor must be responsible What is farebox capacity for bad carding?

Who manages the Hot List for bad cards?

This process should be automated by 3rd party processor back to farebox software and updated at the farebox during daily probing.

How often should transactions be processed by the processor?

Daily vs some extended period (Aggregation) Impact on transaction fees vs bad card risk

Accounting Considerations continued

Data Security Payment Card Industry Data Security Standards

must be followed (PCI-DSS) Mandatory compliance program Security and confidentiality of customer

information cannot be compromised Prevent internal fraud and scams with security Encryption software is required

Farebox software and 3rd Party Processor must be PCI-DSS compliant.

Subject to annual audits, quarterly network scan or annual self-assessment questionnaire depending on volume of transactions processed

Implementation Cost to Implement

Cost of any new or upgraded hardware

Cost of software upgrades 3rd Party transaction costs

(Aggregation) Training Cost Flow of funds

e-Payment Technology

Farebox

Probing Computer

Network Manager

Link2Gov

Transit Agency

Chase Paymentech

Transit Agency Bank

VPN

ACH

Bad Cards

Bad Cards

Bad Cards

Bad Cards

Bad Cards

What Did Nashville Consider?

Accepting credit cards for micro purchase of single ride tickets ($1.25), All Day Passes ($3.75), their discounted equivalents for youth, elderly and disabled and Night Owl Service ($4.00) (no signature required)

Just like cash fares, a rider will inform the driver which fare they want to purchase

The driver will hit the button associated with the fare desired and then the rider will swipe their card

Other Considerations GFI Genfare and Link-To-Gov software

must be compatible The 3rd party processor must manage

Bad Care List electronically Determining an acceptable number of

days the Transit Agency takes the risk of accepting fraudulent cards

Which credit cards to accept Expanding credit cards to Paratransit

Questions

Thank YouEd Oliphant, CFONashville MTA October 29, 2007

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