Canadian transit payments trial finds success among infrequent riders

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This month, Vancouver became the first Canadian city to commercially roll out open transit payments. But the city of Laval actually got a head start on Vancouver with a pilot project that is getting a positive reaction from riders.

Laval is a suburb of Montreal in Quebec a with population of 425,000. Because of Laval’s small size compared to metropolises such as Toronto and its limited number of transit vehicles, it has proven to be the ideal location for a test of new payments technology.

In this case, the test is designed to see how new payment options appeal to the riders who don't need or want to buy the Opus prepaid reloadable transit card used in Laval, Montreal and Quebec City.

“The pilot’s goal is to reach occasional riders; clients who travel on a regular basis use their Opus card," said Sabine Auriol, product owner for electronic payments and business partnerships and business services, at Quebec-based Desjardins, which is providing the payments technology and acquiring services for the trial.

Launched in April 2017, the Laval project involves local transit operator Société de Transport de Laval (STL) deploying Monetico contactless readers provided by Desjardins on its buses. Riders can tap their contactless Mastercard and Visa credit cards on the Monetico readers to purchase single fares.

Monetico is a Franco-Canadian card acquiring joint venture between Desjardins and French cooperative banking group Crédit Mutuel. Desjardins is the largest cooperative financial group in Canada and the sixth largest cooperative financial group worldwide, with assets of C$272 billion.

From the pilot’s launch in April 2017 until the end of March 2018, STL saw 11,000 riders using open contactless payments, amounting to 44,000 open contactless transactions, or 3,500 to 4,000 per month on average

"We observed a concentration of contactless payment transactions in the STL bus network’s geographic hubs,” says Auriol. "These are the five main stops where riders have to validate their tickets or transit cards. The biggest peaks for contactless payment are definitely during the rush hours. This payment option is also more frequently used in the evenings and weekends compared to other options."

For the trial, Desjardins staff tested mobile wallets from Canadian credit card issuers such as Bank of Montreal, CIBC and National Bank of Canada, as well its own Desjardins mobile wallet. These wallets aren't officially supported during the pilot, but they are supported by the technology, Auriol explained. "Mobile payments technology is evolving so fast and some mobile wallets are so locked, that the decision was made not to include them in the project for now.”

On the FAQ section on its website, STL also notes that contactless debit cards can’t be used at the moment on its buses.

As of May 2018, the open payments system has been implemented on 165 buses on six bus routes. In phase two, starting this summer, the platform will be rolled out gradually to the entire STL bus network, covering an additional 168 buses.

The Quebec market is opening up to new avenues for open payments, but moving to commercial rollout for open payments is premature, Auriol says. “Transit authorities need first to set up pilots to understand the technology,” she says. “The Laval pilot has been a success. Riders have welcomed open payments and they are using our system. Strong indicators such as satisfaction rates and number of transactions show that we can go commercial, as the market is ready for it.”

Auriol says many Quebec transit authorities have demonstrated an interest in the Laval pilot, but none have made an official commitment to open payments yet.

“Implementing a new system such as open payments is a winning solution for transit authorities,” she said. “But we’re faced with a disruptive innovation, meaning that it changes paradigms. So my advice for any transit authority which wants to implement open payments would be to begin with a pilot. Think small at the beginning, and roll out your solution afterwards. For example, a city which is a big tourist destination could test open payments on two or three of its most popular transit routes.”

Louis-Martin Fournier, a product manager at Desjardins, said in an op-ed piece that STL’s open payments solution is designed to grow over time, and that the plan is for commuters to be able to buy monthly passes, books of tickets, and transfers to other transit systems. He noted that Desjardins has been meeting with transit industry stakeholders since 2015 to promote its vision of onboard fare payments using contactless credit cards and payment terminals.

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