Ticketing and Concessionary Travel on Public Transport - United ...

Transport Committee: Evidence Ev 101
Also in the transport sector, we have done some work in relation to the proposed EU implementation of
an interoperable road user charging system that would allow heavy goods vehicles, <strong>and</strong> later motorists, to
travel across the EU Member States using a single electronic “tolling” device. Our work related to the
payments <strong>and</strong> clearing requirements of such a system, <strong>and</strong> how these might best be implemented.
3. Responses To Questions
3. Is the industry taking up modern smartcard technologies adequately <strong>and</strong> appropriately?
The ITSO organisation has done an excellent job to develop <strong>and</strong> deliver an interoperable technology
st<strong>and</strong>ard that has the potential to operate across the UK, <strong>and</strong> possibly internationally as well. To achieve
widespread implementation in a timely manner, however, suYcient funding is required.
The UK approach has been to encourage local authorities <strong>and</strong> transport executives to implement local
programmes <strong>and</strong> to establish their own business case for doing so. The initial costs of implementing a
smartcard based transit system are high <strong>and</strong> economies of scale are reduced if a fragmented approach is
taken. Funding is often not available for large scale card issuing, on-vehicle <strong>and</strong> on-station equipment <strong>and</strong>
its installation, plus associated implementation <strong>and</strong> transition costs.
If a means can be found to generate a future income stream from ITSO transit smartcards, then the
business case becomes easier to establish <strong>and</strong> a projected return on investment may be quantified.
The ITSO technology platform includes a secure e-purse, which can store value <strong>and</strong> can be used to make
payments for travel, <strong>and</strong> potentially to make payments for other non-transit products <strong>and</strong> services.
Merchants accepting electronic forms of payment such as credit <strong>and</strong> debit cards pay fees for each
transaction. This would allow the ITSO organisation, <strong>and</strong> its members, to generate a future income stream
to oVset the cost of implementation.
It is clearly understood that the short term priority will be the delivery of the ENCTS <strong>and</strong> that other
projects must not interfere with, or divert resources from, achieving this goal. However the basic platform
for a future e-purse already exists in the ITSO st<strong>and</strong>ard <strong>and</strong> therefore, provided a suYciently secure chip is
chosen, there is no need for this future potential to impact upon ENCTS delivery in any way.
Indeed, if the organisations charged with implementing ENCTS underst<strong>and</strong> that a future income stream
is available to them, they may be encouraged to invest in this project much more readily than if that potential
is denied them.
5. What can be learned from the experiences of areas such as London <strong>and</strong> Scotl<strong>and</strong> where smartcard technology
is already in place?
In addition to the Oyster card in London, <strong>and</strong> the ITSO smartcard in Scotl<strong>and</strong>, it is also worth considering
the Octopus programme in Hong Kong. The Octopus transit smartcard is now also used for non-transit
payments <strong>and</strong> is widely held <strong>and</strong> used by the travelling public.
The Oyster card in London has been successful for TfL as a transit card but they failed in their later
attempt to exploit the commercial potential of their e-purse. This was largely due to the fact that the Oyster
card makes use of a Mifare 4K chip which is not suYciently secure for a general payments instrument. The
announced Barclays project to add an Oyster chip to a Visa contactless payment card is the end result of a
decision to select a particular technology platform that was suitable for the transit objectives but limited
beyond that scope. At the time that TfL <strong>and</strong> their partners made that selection, they were not even
contemplating any future applications beyond transit. It is also the case that the cost of more secure chips
has fallen dramatically in the intervening years so they are now much more aVordable.
In Scotl<strong>and</strong>, a concession ITSO-compliant smartcard has been issued, but the required equipment to read
<strong>and</strong> process these cards on board vehicles has not been purchased or installed. Consequently the smartcard
benefits have largely not been realised <strong>and</strong> the concession card is being used as a “flash card” to identify
passengers entitled to receive a concession. The Scottish card is also a Mifare 4K card <strong>and</strong> would not be
considered secure enough to implement an e-purse in the future.
Other Issues
It is noteworthy that the International St<strong>and</strong>ards Organisation has adopted the ITSO conceptual
framework as the basis for its new st<strong>and</strong>ard for Integrated Fare Management System architecture (ISO
24014-1). This ensures that the UK transport system <strong>and</strong> the ENCTS will be compliant with international
st<strong>and</strong>ards when selecting ITSO as the platform for future interoperable ticketing systems.
This may open up the possibility of pan-European interoperable ticketing in the future which would be
in line with current European transport policy. The Calypso transit technology used by many European
cities is both ITSO <strong>and</strong> ISO 24014 compliant.