session 2.2 - integrated transport
DESCRIPTION
Presenter - Sujith NairTRANSCRIPT
Smart Card Based Fare Collection SolutionBMTC EY Case Study
Page 2
BMTC’s Smart Card Initiative
Plug revenue leakages due to pass misuse
Increase adoption of monthly/daily passes
Improve commuter experience
Enable common mobility across various modes
BMTC has embarked on journey of converting paper based season tickets / commuter passes to smart cards
Primary Objectives
Page 3
Project cost - ~INR 100 Cr (Capex + Opex) include
procurement of cards and setting up card reading/
acceptance infrastructure
Life long maintenance and upgrade required
Limited applications of card outside transport
Engage System Integrator (SI) for IT implementation of
smart card based solution
Conventional approach to Smart card Implementation
Page 4
Financial Institution (FI) engaged for
implementation smart card solution
FI funds cost of infrastructure and
integration
Commuter can use BMTC Smart Cards
for payment transactions with other merchant
FI promotes the card usage for purchases of passes, ticket and also across merchant
outlets
FI maintains the system as long
as it is s engaged
FI pays to BMTC – a) One time royalty fee,
b) commission for non-transit transaction
BMTC pays a nominal commission for
ticketing transaction
BMTC and EY’s innovation in Smart card Implementation
Page 5
• The Transit operator hires one or multiple Financial Institutions (FI) to issue a Pre-paid EMV enabled Travel card to its customers (transit commuters)
• The EMVbased smart cards can be accepted on transit operator’s terminals. The Transit Operators fare acceptance terminals would need EMV enabled card readers
• The same card can be used on network of other payment methods like RuPay at any merchant outlet
• Model is convenient for a commuter as Transit Card acts as an ‘eWallet‘ that can be used for all payment needs as single media
• Model also aids customer to gain loyalty points for usage of cards on transit or non transit network.
Retail Purchases
(Non-Transit
transactions)
CommutersBank issues
Pre-paid Co-Branded Travel
Card
Metro Rail
City Buses
Bus/Metro
terminal parking
Fare collection
EMV based Payment
System
Revenue Improvement
model
Shopping malls/ retails stores etc.,
Banks
Central Clearance
House
2
3
Fare
ded
ucti
on
instr
ucti
on
5
Levy
Transa
ction
charg
es on
merch
ant & B
ank
earns R
evenue6
Bank pays back fixed loyalty & share non-transit transaction revenue with transit operator
Fare colle
ction
Fare collection
1
1
1
4
Fare
Distrib
ution to
transit
operato
rs
Transit
Operators
* Smart Card and payment applications laid out by Europay, Mastercard and Visa
A new model for Smart Ticketing
Page 6
•New business model as compared to existing models adopted
•Business Model leverages BMTC customer base to significantly substitute investments
•Not just a smart card but an multi-purpose payment card
•Card Co-branding of card between BMTC and FI
•Allows FI to adopt multiple technology for cards proven in banking industry
•Reduces risk on technology and vendor lock-in in the services model
•FI as service provider instead of Card agencies and IT service providers
•Smart card design, distribution, operation and customer services by FI
How is it unique?
Page 7
Advantages of Open Loop EMV Prep-paid Cards:
• Wider acceptance of card for transactions by end user at multiple merchants –Transit Card as ‘top-of-wallet’ choice to card-savvy customers in large cities
• Reduced capex investment for Transit Operators as FIs would be willing to invest to access the customer base of the Transit operator.
• Addition revenue for Transit Operator due to potential revenue share by the FI accrued on customer transactions outside transit
• Help achieve Common Mobility across multiple modes of transport
• Implementation taken up in cases of Bangalore Metropolitan Transport Corporation & in a upcoming metor
Retail Purchases
(Non-Transit
transactions)
CommutersBank issues
Pre-paid Co-Branded Travel
Card
Metro Rail
City Buses
Bus/Metro
terminal parking
Fare collection
EMV based Payment
System
Revenue Improvement
model
Shopping malls/ retails stores etc.,
Banks
Central Clearance
House
2
3
Fare
ded
ucti
on
instr
ucti
on
5
Levy
Transa
ction
charg
es on
merch
ant & B
ank
earns R
evenue6
Bank pays back fixed loyalty & share non-transit transaction revenue with transit operator
Fare colle
ction
Fare collection
1
1
1
4
Fare
Distrib
ution to
transit
operato
rs
Transit
Operators
A new model for Smart Ticketing
Page 8
Substantial financial benefits to BMTC vis-à-vis existing Mode
Reduced CAPEX (Potential savings of ~ INR 100 Cr to BMTC – Planned outlay for smart card solution)
Potential Revenue Generation through card transactions outside transit network
Receive royalty from FI Limited Operational overhead as FI offers Card operations and customer
services Reduced Cash management - Promotion of electronic cash
Wider utility of card (doubling up as prepaid/CC/Debit card) promotes wider acceptance among travellers Allows multiple card products in market proven for EMV based
transactions
Can be extended to other transit operators for the purpose of Common Mobility
Reduce vendor and technology lock-in
What is the Value it offers?
