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Bank Card System Weighed For Metro

Transit Agency Cites Rider Convenience

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Washington Post Staff Writer
Sunday, May 10, 2009

Metro is exploring a system that would allow riders to pay for rail, bus and parking using the same credit card or debit card they would use to buy gas, groceries and clothing.

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The system relies on bank cards that riders would tap or wave across a card reader. The cards, embedded with a computer chip, would be an alternative to the current payment methods -- traditional paper fare card (Metrorail), cash (Metrobus) and Metro's electronic fare card known as SmarTrip. SmarTrip is the preferred payment method on trains and buses, and is virtually the only way to pay for parking at Metro stations.

Metro is seeking board approval this month to solicit proposals for a provider to issue and manage such bank cards. A board committee is scheduled to hear a presentation Thursday.

New York is testing the cards on one subway line, the Utah transit authority is using them, and the Philadelphia, Los Angeles and Chicago transit systems also are considering them.

Metro's blue-and-green SmarTrip cards are embedded with a chip, but the chip relies on proprietary technology. The new payment system would have a chip that conforms to one set of international standards, meaning the data processing would be the same at any transit agency that uses it, in the United States or elsewhere.

"[The cards] would not only work in the Metro, but over time, in every transit system that has this," said Maryland board member Peter Benjamin, who has been pushing the concept for years. "Any Visa, MasterCard or American Express card has the same chip."

The goal of the program is to provide more convenience to customers and improve their transit experience, he said. Such cards would particularly benefit tourists and other infrequent users of the system.

Tourists would no longer have to "know how much a trip costs and try to puzzle out the fare charts," he said. Using bank cards would mean that train and bus trips would show up on monthly credit card statements, just like other purchases.

Implementing the system would require that card readers be replaced or new ones installed at thousands of locations on Metro fare gates, SmarTrip vendors, bus fareboxes and parking lots. Those card readers are part of Metro's SmarTrip program, one that has been plagued by delays because of failures of its main contractor and Metro management.

If the board signs off this month, the agency would solicit proposals and hope to receive some by midsummer, Benjamin said. Financial institutions and entities that provide clearinghouse services for banks would be among the logical candidates, he said. The board would have to evaluate the proposals, and even after a contract is awarded, it is expected to take another year or two before such a system could be in place, he said.

"It's new. It's different," Benjamin said, adding that Metro would need to engage in "extensive negotiations" to work out the relationship with the provider.

It is unclear whether Metro would earn money or pay fees to a provider, much in the same way that merchants pay fees to credit card companies. Initially, Metro could reduce its fare collection costs, Benjamin said. Over time, the agency might be able to generate revenue with a co-branded card that has Metro's name and logo on it as well as that of a bank, he said. If the bank card also has an affinity program, such as earning airline miles, users would be able to earn miles every time they take Metro.


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