Wednesday, November 24, 2010

Metro's Visa+TAP program seems destined to flop

Metro is looking at rolling out Visa cards for use in contactless fare payment, but these cards will only allow pre-existing tap products (day/week/month/quarterly passes) but no new declining balance option?  Perhaps these cards will offer this ability and Metro's staff report is misleading - if this is the case I'd love to be corrected in the comments.

The potential benefits to customers are limited:
  • one fewer piece of plastic to lug around (for a small subset of customers who have Visa ATM cards)
  • as this enables no new fare payment options there are no other benefits.  There are already limited-value debit cards for sale, so that aspect of the product is not new.
The benefits to Visa seem much greater:
  • Metro, a government agency with some trust from riders, markets a Visa Debit card to the unbanked.  Visa (and the issuing bank) earn a service fee for each initial purchase and reload.

The main benefit of enabling contactless payment debit cards for use with a transit system is in offering a declining balance payment option.  New York MTA has figured this out with their integration of Mastercard's PayPass.  This enables PayPass holders to use that card as cash fare, giving occasional riders the same ease of payment as pass-holders.

It seems that Metro has defined the problem as: "How do we offer some sort of branded contactless fare payment system that will allow us to demonstrate technological advancement in fare payment when the Board asks about other system's programs (e.g., New York's) without further troubling the Board with the root political issues surrounding use of declining-balance fare payment with multiple agencies?"  Metro will never be able to move forward with new, innovative, fare products unless it solves that issue, and the Metro Board is the only body with the political to solve it.

I would think that most customers would define the problem as: "How do you make my transit experience more seamless?"  The proposed Visa cards do nothing to address this problem.

What do you think?

1 comment:

Mark said...

Thankfully, they seem to gradually be adding the stored-value option. There are a couple of twists though that still need to be worked out. One is that when the cops ask you to TAP your card on the way out, it deducts $1.50 again which is lame.