The Chicago Transit Authority is planning an August launch for its new fare system that will allow retail and fare payments from the same card.

The open standards fare system is called Ventra and was developed through a partnership between Cubic Transportation Systems, MasterCard and First Data. With it, Chicago transit riders can pay for fares on the city's elevated trains (called the "L"), buses and subway that are all operated by the CTA, as well as suburban bus line fares for routes operated by a separate transit authority called Pace.

The system has been in development for more than a year and will be deployed gradually. There be a soft launch in August, during which tests will be conducted to spot anomalies and ensure user experience, says John Satterfield, Cubic's vice president and regional director for Chicago. A wider rollout will follow in September, including support services such as a call center, the retail network and websites.

"During the development over the past year, some nuances have developed that we have dealt with. This is a relatively new system for the public at large, and we’re creating a payment system for a large operation. The Chicago Transit Authority provides two million rides per day," Satterfield says.

The challenges include migrating the transit system’s legacy, closed loop magnetic stripe card system to the new dual purpose cards. "We are expanding the retail experience to mass transit and when you are brining two different markets together there are going to be nuances," Satterfield says.

The Ventra Card will feature two accounts — a closed loop account for transit payments and an optional reloadable Money Network MasterCard Prepaid Debit Card that can be used for purchases at any retailer that accepts MasterCard debit. Money Network is a First Data company. MetaBank will issue the prepaid cards.

There is a use-case for dual transit fare/retailer payments, as long as the initiatives are viewed as promoting rider convenience, rather than a replacement for checking accounts, says Ben Jackson, a senior analyst at Mercator Advisory Service.

"It’s convenient if you are going to get breakfast or coffee at a store nearby, or if you kind is going to a museum in downtown Chicago, and you want to make sure he has enough money for lunch and the train, so you load it into the card," Jackson says. "It’s similar to the Starbucks card. It’s convenient to know that you can top it up."

Commuters will pay for train and bus rides with MasterCard PayPass or the contactless payment cards to tap and pay at rail turnstiles and buses. The cards will be sold in more than 2,000 retail stores and in more than 400 vending machines. The vending machines will continue to accept cash.

The retail payments may also include special offers, says Mark Putman, senior vice president of the prepaid group First Data.

"Users can take advantage of any MasterCard offer. And the long term plan at First Data is to enable offers back to the card," Putman says.

The Metra suburban commuter rail system is not currently part of the dual payment system, Satterfield says, though the partners have not ruled out forging deal to include the suburban rail carrier.

The CTA open payment system is also not yet set for mobile payments, though Satterfield says that may be added later. "We would hope to add mobile at a future time. As mobile or any technology that is applicable to transit and retailer payments develops, we would look at the possibility of adding that technology to the platform," he says.

New payments technology is also being added to other transit systems. The telecom-driven Isis mobile wallet is being tested in Austin and Salt Lake City, with transit payments included in the beta.

In London, busses began accepting contactless payments earlier this year. In Hong Kong, the Octopus card is an open loop system. In the U.S., Philadelphia's SEPTA public transit system is in the midst of a long-term payments upgrade that will include open loop payments with a target completion date of 2015.

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