The Societe de transport de Montreal (STM) is testing a loyalty program that ties user preferences and special offers to transit payment cards, a move that's also designed to shift rider volume from peak times.

Through a pilot called Merci, riders register their STM Opus payment cards with an iPhone app, which authorizes the transit authority to read the card's contents to provide offers. These offers are targeted by the preferences and travel habits users share.

"As the riders share more information, we can be more intelligent about how we market to them," says Pierre Bourbonniere, STM's marketing director.

To manage rider volume, Merci uses geolocation to peg location-based offers to a particular transit route or time. This process can help manage rider flow by encouraging travel at different times, as well as suggesting exits at certain stops.

"One of the key objectives to this program is to get people to travel more often with us, and to travel more often during non-peak hours—8 a.m. is the worst time of the day to take the subway, but if you know there was an offer that you could redeem if you traveled ten minutes earlier, that could change your habits," Bourbonniere says.

STM will use technology from SAP to match rider preferences and trip data to personalized offers. The merchants are divided into 12 preference areas, such as different types of local businesses or entertainment events. More than 340 businesses and 1,000 events have enrolled as Merci partners.

To use Merci, riders check in via the app, though they use the Opus cards to pay for subway fare and buses. Consumers redeem offers by presenting a bar code to a merchant or typing a code on the merchant's mobile web site. Merci, while limited, got off to a fast start—in its first 48 hours, Merci had 4,800 downloads, 6,203 unique sessions, 1,600 Opus card registrations, 328,000 special promotions sent, with promotion viewing rates of 66% and activation rates of 47%, STM says.

Other transit authorities, such as Chicago's MTA and Philadelphia's SEPTA, are building open payment systems in which the same app or card can be used for transit fare and at merchants. The telecom-driven Isis mobile wallet's pilot also includes transit payments in Salt Lake City and Austin.

STM plans to incorporate open-loop mobile payments for both transit rides and merchant payments in future iterations of the Merci program, says Herve Pluche, a vice president at SAP. STM also plans to extend the program, which is currently available on subways and buses in Montreal, to Montreal's suburban commuter rail and transit systems in other cities in Quebec.

Using special offers to get people to change their travel habits may be a tough sell, says Ben Jackson, a senior analyst at Mercator Advisory Group.

"The fundamental struggle is people need to be at work when they need to be at work, and a free cup of coffee isn't going to change someone's need to be in their office earlier or stay later," Jackson says.

The transit authority has to carefully manage how it harvests personal data—and how much data it collects, he says.

The Montreal transit authority—the fourth largest transit organization in North America, serving 1.2 million daily passengers via 250 bus lines and 68 subway stations—has traditionally collected a wide range of personal information for its Opus cards as part of a card replacement program, Bourbonniere says.

"People in Montreal also like to personalize their Opus cards. We have e-mail addresses, for example, and we ask them to reveal a bit more about who they are, demographics, etc. The [Merci] program is taking that one step further," Bourbonniere says, adding the program is opt-in and data is not shared without authorization from the user.

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