Transit Applications

VeriFone

Emrah Guven

Business Development Manager

South East Europe

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Mobile ApplicationsTrends in Transit Payment1New Solutions2Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors Learned5

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Mobile ApplicationsTrends in Transit Payment1Solution2Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors 5

New York City; 8 million passengers a day subway & bus

Three largest mass transit systems (Tokyo, Moscow and New York) move around 7 billion passengers a year –equivalent to the worlds population

Paris Metro moves 1.4 billion passengers annually

(1.9 billion with RER)

Transportation Projects Globally

North America; 13B annual journeys

Trends on Transportation

• After 1990, significant investments in contactless smart card-based AFC systems.

• Transportation cards create huge revenue

• Future Investment: with using same system even NFC payment is supported.

Cash

Closed, Proprietary Transportation Cards

MiFare, FeliCa

Bank Card Payment

Contactless cards & readers

Cell phonepayment schemes

Tokens

Paper tickets

Some Transportation Hot Projects

SloveniaRomania

Croatia

MoldovaSlovakia

Bosnia and Herzegovina

Bulgaria

Greece

Albania

Turkey

MontenegroTurkey Kosova

Serbia

Macedonia

Cyprus

Israel

Evolution to City Card

• Reason; City Cards with payment asset create huge revenue

• Banks want revenue from transportation & Micropayment

• City Cards become more doable with the contactless prepaid solutions

• Micropayment require more secure cards & transactions

• Revenue Resources; Smart City Cards are Closed Systems and with this feature enables “Discount” models to be applied to retailers. Card Processor company creates a business model to get discount when the card used in the merchant. Some part of the discount is reflected to card holder when card is a prepaid card. Due to nature of prepaid “float rate” becomes attractive.

• Strategy; Sophisticated process to convert card to city applications

• Result: Transportation Cards City CardTransportation cards evolved into City Cards, now banks issue those

• Micropayment Potential; Payments less than 5$ ; 1.32 trillion $ in USA, 2003

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Mobile Applications

Solution2Trends in Transit Payment1

Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors 5

Key ManagementBackoffice (key turn solution)

Terminal ApplicationCard Application

Intelligent ReportsDeployment

Top-up (credit loading)Full Service Offering with

ticketing and operation managementValue Added Applications

Switch CenterInstallation

Training

Business AnalysesSystem DesignCard Mapping & Design

ValidatorTerminalsCredit Loading TerminalSelf Service loadingReadersPaper Ticket readers

SoftwareConsultancy

Hardware Services

Unsurpassed responsiveness and technical expertise to

deliver the best combination of technology, products and support to our customers.

New Transportation Solutions & Functions

Automated Fare Collection Systems

Products used in new Mass Transit Payment

Self Service Top-Up PIN Entry Cash@Merchant

Payment at public transport Payment @ Taxi

Turn Stiles

Ticket Machines

Taxi ; NewYork & Philadelphia Taxi

SMART AFC SYSTEMS

Problems and issues about bank credit cards

• Not-on-Us transactions

• Inter Charges

• Transaction fee

• One time Investment

BANK 1 BANK 2 OPERATOR

Bank Cards

Paper tickets

Application Manager at Terminal reads card type and determines its issuer

Bank 1 card sends to Bank 1 Host

Bank 2 card sends to Bank 2 Host

MiFare card sends to Closed Systems

Paper Ticket reader sends data to related operations center

Operations Center gets all transaction details and creates a consolidated end-of-day reports, revenue split between the parties

NFC

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Mobile Applications

Solution2Trends in Transit Payment1

Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors 5

First in Europe

One of the few in the world

The ultimate in contactless

payment technology

The most advanced card

AsyaCard DIT

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Case : Benefits to a Bank : Bank Asya

About Bank Asya

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Growth Strategy in Credit Card Business

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Contactless Card Market in Turkey

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50.000

100.000

150.000

200.000

250.000

Jul.08 Aug.08 Sept.08 Oct.08 Nov.08

ASYACARD DIT

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Contactless payment techonology has been launced in 2006.

Total number of contactless payment cards

600.000

AsyaCard DIT

260.000 - % 43 market share Market YearOverYear Growth Rate : 20%

Bank Asya rate : 100%

Multiplied by 5 the Market Growth !

Convenience:

Faster transactions, shorter queues

Easy clearance of customer cashbacks

Less usage of change

Decrease in cost of transations and workload

Security:

EMV enviroment:

Benefit from standart EMV card/terminal autentication and risk management rules

Zero liability

Protection like traditional payment cards

Benefits for merchants:

Shortens the time customer waiting queues

No more cash handing

Speed of transaction

Reliable, no failed read

Increased feeling of security

Card remains in hands during transaction

Easy pass through motorways and highway toll counters with KGS (Toll payment System)

Replacement usage ofr tickets in local transaciton facilities (bus, subways, ferry etc. Where applicable)

Benefits for customers

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Customers Targeted

All customers who use credit card

Customers who do not want to carry change in their wallets or pockets for their

small transactions

Customers with frequent usage of motorways, highways and bridges

Customer who use local transportation facilities

System Components

CardPOSReaderValidatorVehicle Tracking System Instance IssuingCap ScriptingSoftware

Backoffice & Instant Issuing SoftwareCredit Card Management SystemPrepaid Card Management System Terminal Management SystemKGS-Tollway SoftwareBank Asya Banking System

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Card

Started with Native 12KSDA

Continues with Java 32KPayWave & PayPass

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Card Chip Structure

EMV Part – EMV Contact and Contactless Transactions

Loyalty Part – Transit Data, Loyalty Applications

Mifare Part – Tollway Payments (KGS)

Non

-Pa

ymen

t Fu

nctio

nalit

y

Paym

ent

Func

tiona

lity

Contact Interface Contactless Interface

Loyalty Part Mifare Emulation

EMV Part Contactless EMV

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Asyacard DIT can be used as ticket in Public Transportation

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AsyaCard DIT has KGS feature which allows easy pass from motorways, highways and bridges…

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Mobile Applications

Solution2Trends in Transit Payment1

Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors 5

City Card

700,000 cards issued in first year, most of them are personalised

AntKart

08 Jan 2009 19:28

Burger

Antalya City

Kart no: 99XX123456

Instant Reward1 Drink Free

“Erdi goes to the local burger house to have a quick lunch”

The local burger house, a member of the city card loyalty scheme had previously designed their own reward program. As this is Erdi’s 4th visit to them this week, they now instantly offer him a free soft drink !!!

Merchant Penetration of Project

Loyalty Program with Domino’s Pizza; Pay with CityCard get the second one free ; Penetration into food payment target is 1B$ food payment annually

General Income Model from Food Payment; Merchants & Brands make roughly 15% discount where 5% remains for card operator and 10% to Card Holder

Merchant Penetration of Project

Merchants started to compete to become a Card loading & Payment point

They got more customer in the store; gained commission from loading and payment transaction with the card

Merchants started to create special food menu to be paid by City Card

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Mobile Applications

Solution2Trends in Transit Payment1

Case Study 1 ; Bank in Transit3Case Study 2 ; City Card4Key Success Factors 5

OPERATORS

• Start with parking lots, take-a-ways, newspaper corners, schools & universities, copy centers, laundries, get in all vending machines and if possible ID cards at the same time

• Find right technology partners; Lack of single solution source for all

hw, applications, integrators

• High merchant fees effect profitability

• Know your customer & make loyalty compliments to keep them using card

• Instant Issue necessary for presonalised cards to know customer

• Decrease Fraud by moving to digital solutions

• Get support of legal authority to stop cash but rather card usage

• Motivate merchants with commission and increase # of people entering to shop

BANKS

• Try to be partner with operators work hybrid

• Handle the card issue process even if MIFARE

• Customer behaviour follow up

Key Success Factors