Apple Pay Ventra: the closed open loop card

Apple Pay Ventra finally launched October 26, 2020, a very long wait after the March 25, 2019 Apple Event announcement. I wrote about the delay blaming it on open loop when the Washington SmarTrip and LA TAP cards landed on Apple Pay first.

Ventra has a long glitchy open loop history from its debut with the ill-fated Mastercard debit Ventra. Streets Blog had this to say about it in 2017.

Arguably it’s a good thing that the Ventra prepaid debit card is going the way of the dinosaur. The debit card function debuted with a long list of fees that had the potential to siphon of much of the money stored on the card, including:

A $1.50 ATM withdrawal fee
A $2 fee to speak to someone about the retail debit account.
A $6.00 fee for closing out the debit balance
A $2 fee for a paper statement
A $2.95 fee to add money to the debit account using a personal credit card
A $10 per hour fee for “account research’’ to resolve account discrepancies

“These fees were probably not any different than other bank cards offered by Money Network or Meta Bank or other predatory banks,” says Streetsblog Chicago’s Steven Vance, who reported on the issue at the time. “But it was shameful for the CTA to be aligned with that.”

After a backlash, most of these fees were reduced or eliminated, but CTA retail outlets were still allowed to charge Ventra card holders a fee of up to $4.95 to load cash on the debit sides of their cards. So maybe it is for the best that the CTA is getting out of the bank card business.

StreetsBlog Chicago December 2017

Getting Ventra out of the bank card business is easier said than done when the whole system is designed around open loop. Mastercard may have stopped issuing Ventra branded prepaid debit cards but they have managed Ventra account services all this time. The Ventra plastic card is MIFARE DESFire EV1 which fits with the tried and true Cubic Transportation Systems management style. All of the various transit card systems they manage around the world are designed around MIFARE stored value cards: Chicago Ventra, London Oyster, Sydney Opal, Washington SmarTrip, LA TAP, etc.

An Apple Pay Ventra in Wallet screenshot from a Japanese Twitter user revealed a fascinating bit of information. Apple Pay transit cards like Suica, SmarTrip and TAP all show a stored value card balance. Apple Pay Ventra does not, it shows a card number like a Wallet credit card. This means Apple Pay Ventra is a reincarnated Mastercard prepaid debit card, only this time disguised as a mobile transit card with Mastercard running the card account services.

Apple Pay Ventra: the closed open loop transit card
Most tech blog coverage of the Apple Pay Ventra launch only mentioned Express Transit but there are important limitations:

  1. Ventra Card on iPhone 6S and later / Apple Watch Series 1 and later, can only be used on the CTA and Pace bus services, but not Metra or Pace Paratransit. RTA and Student Reduced Fare cards, including U-Pass cards, and free ride Ventra Cards cannot be added to Apple Wallet yet. (from StreetsBlog Chicago)
  2. Reload/Recharge in Wallet is not supported, you have to do it in Ventra App. This really sucks for Apple Watch Ventra users. Currently only Apple Pay TAP and Apple Pay SmarTrip support Wallet recharge, interestingly those systems are closed loop.

So, we have the following pieces: open loop, Cubic system management, Mastercard managed Ventra card accounts, MIFARE for plastic cards, EMV prepaid debit for mobile digital cards with a closed reload/recharge model that limits everything from card issue and recharge to the app, oh and slow tap speed.

The end result is a centralized processing system model mishmash of open loop and closed loop parts, ‘heavy’ in every performance aspect, that pales in comparison to stored value local processing lightness of a user friendly Apple Pay Suica•PASMO with fast tap speeds that lets users do everything from recharge to card creation in Wallet without an account or app. In short Apple Pay Ventra is a bank card without the credit checks for transit use.

The Sydney Opal card is about to enter digital wallet tests with Mastercard running the show with a similar set of Ventra pieces: Mastercard EMV issue for mobile, MIFARE plastic cards, Cubic management, etc. Expect similar results.

EMV transit cards: next installment of the Contactless Payment Turf Wars
If nothing else Apple Pay Ventra reveals how flimsy the ‘open loop is open’ argument really is: The Apple Pay Ventra prepaid debit card as transit card can only be used on the Ventra system. How open is that? All they did was swap MIFARE for EMV, neither of which are open. And tap speeds will be slower than ever with EMV, aka the supermarket checkout protocol.

The lesson here is that when transit agencies let banks and card companies run their transit fare concession, they will never be free of them: there’s just too much private money to be made off of running the backend services attached to public infrastructure. And the bank card industry has no interest in improving their slow EMV supermarket checkout card spec for transit. Nobody in Sydney will bother asking who ends up getting the float interest from Opal cards when Mastercard runs the account backend. I’m sure the bank card issuers like it that way.

The only question remaining is this: now that we know the Ventra EMV Mastercard prepaid debit card as mobile digital transit card is same one for mobile Opal…is it going to be the same deal for MTA mobile OMNY and TfL mobile Oyster? I suspect so: this is the new Cubic mobile transit card business model with NXP MIFARE the loser in this latest installment of the contactless payment turf wars.

UPDATE

A reader was kind enough to scan a Apple Pay Ventra card with a NFC tag reading app. Results confirmed what I outline above: Apple Pay Ventra is a EMV Mastercard prepaid debit disguised as a transit card. This officially marks a migration away from stored value MIFARE transit cards to stored in the cloud EMV prepaid debit cards for mobile digital transit card systems managed by Cubic. Specifically it means the local stored value information that was held by the MIFARE plastic card has been migrated to an online Mastercard account for Apple Pay Ventra as the EMV credit card format wasn’t designed for stored value. Just like the title says: Apple Pay Ventra is a closed open loop card.