UPDATE 4-15: Apple Pay Clipper launched April 15, digital card issue in Wallet and plastic card transfers are supported with matching real-time transit info in Apple Maps. Interesting details: (1) iPhone 8 or later with iOS 14.3, or Apple Watch Series 3 or later with watchOS 7.2 or later, (2) Adult, Youth, Senior, and RTC Clipper cards can be transferred, (3) in order to use Clipper with Apple Pay on SFMTA cable cars and other transit services using handheld card readers, all customers must authenticate with Face ID, Touch ID, or passcode (sounds like those handheld readers need a serious upgrade). Download Clipper App from the App Store.
Apple announced Clipper Card for Apple Pay today on a special page, Apple Pay Express Transit is finally coming to Apple’s San Francisco Bay Area home turf. Clipper is due to launch on Google Pay the same time. There are few details other than it works on all Bay Area transit and since open loop isn’t a thing there, it will be the same MIFARE card on Apple Pay that we saw with SmarTrip, TAP and HOP.
Unfortunately the Apple Pay Clipper image does not show an ‘Add Money’ button, it’s on a reader after all. Apple carefully crafts images to show card features. To me Apple not including an image showing the ‘Add Money’ button could mean that users reload/recharge the Clipper stored fare card balance with an app, like Apple Pay Ventra and Apple Pay HOP, instead of directly in Wallet like Apple Pay SmarTrip.
This could be a problem for Apple Watch users as they would have to use an iPhone Clipper Card app to reload and basically chains Apple Watch to iPhone. A Clipper app doesn’t exist yet but has to be in place on iOS and Android for a mobile Clipper service.
Some transit agencies stupidly keep the recharge backend locked in their app instead of leveraging the convenience of Apple Pay Wallet reload which makes the digital transit card less flexible and useful than it could be.
Let’s hope for the best launch day outcome. Meanwhile Apple Pay Suica remains the first and best implementation of a native mobile transit card on the Apple Pay platform, the best role model for a transit company to follow.
UPDATE 2-23 Good news. Apple Pay Clipper testers report on Reddit that direct Wallet reload/recharge is supported. Apple Watch transit users can rejoice. Both plastic Clipper card transfer and direct Clipper card creation in Wallet are supported and just like Suica transfer, the plastic card cannot be used afterwards. Could be a iOS Clipper app won’t be necessary for basic housekeeping after all.
UPDATE 2-18 There were a number of interesting and thoughtful Twitter threads in connection with the Apple Pay Clipper announcement.
> lordy if only we had suica in north america
>> Imo, successes like Suica is a testament to solving back-end issues (fare integration, product partnerships beyond transit, UX) and using the front-end tech to unleash full potential…Apple/Google Pay for local transit cards in the US is just not that level of breakthrough
> Yeah, exactly; the frontend technology can only be as useful as the backend system allows.
It’s heartening to discover comments that ‘get it’, that is a great mobile transit platform leverages a great front-end to unleash the potential of back-end while adding new services and product partnerships beyond transit. If only North America had Suica indeed, folks would really enjoy Apple Pay Express Transit for purchases too.
I know you’re on the closed loop side of this but imo it depends on relative power of transit vs. credit cards. In Japan CCs are not as popular so Suica was ready to take over contactless (and back integrating into CC top-up. In London both are popular so they got both…but most in US don’t use transit enough to justify a top-up card, so I’d prefer NY’s open loop over SF asking frequent travelers to switch from Clipper to Apple Pay Clipper, despite all the limitations in riding experience.
Popularity doesn’t matter, solutions matter. For years London TfL used EMV open loop in an attempt to get rid of Oyster cards but open-loop cannot replace closed-loop cards, only complement them. So now we have open-loop 2.0: EMV closed-loop cards that hide the slow and dumb limitations of a EMV front-end with a beefed up back-end. This is the Cubic + Mastercard transit solution coming to Cubic managed transit fare systems near you. Enjoy.
Prepaid transit smart cards are micro bank accounts on a card. What started as plastic in the mid 1990’s first transitioned to the cloud based mobile digital card era with Mobile Suica in 2006. Transit cards on mobile digital wallets are much more powerful and malleable than their plastic forebears, and occupy a coveted position in the mobile payments market. Credit card companies and banks spend enormous resources and effort to capture this transit fare business.
Background Many smart cards use FeliCa and MIFARE. The technology has been on the market since 1994 and one of the reasons for platform popularity and longevity are the rich application development environments they offer (Calypso is also popular but limited to transit applications).
Developers can design a card architecture as ‘smart’ (like Suica) or as ‘dumb’ (like iD) but they are all smart cards because they contain an IC chip. In Japan FeliCa powers not only company ID cards, but also transit cards (Suica, PASMO, etc.), bank payment cards (iD, QUICPay) and rechargeable prepaid eMoney cards that anybody can buy and recharge at convenience stores (WAON, nanaco, Edy). Mobile FeliCa has been in place since 2004.
Smart/Dumb card architecture depends on use case, system processing cost efficiency and need. In a transit fare system, a dumb card use case is slower centralized processing, like waiting at the store checkout for card verification to clear. A transit smart card use case is instant locally processed stored value to keep people moving through the gates because centralized processing isn’t up to the task. This is why transit cards have used the stored value local processing model…until now.
Open Loop 1.0 EMV contactless credit cards arrived on the payments scene starting in 2007 but uptake was slow. Since EMV contactless uses the same NFC A as MIFARE based transit cards, the big EMVCo members (VISA, Mastercard, American Express) came up with a great marketing idea: use EMV contactless credit cards as a transit card. Thus EMV open loop transit was born.
The current Oyster system, though very popular, is expensive and complex to administer. Contactless bank cards use existing technology, responsibility for issuing cards would lie with the banks rather than TfL, and the operating costs should be lower.
In 2017 there was a push to nudge people away from their Oyster cards and towards contactless. One announcement rang out all over London’s tube stations: Why not use your contactless bank card today? Never top up again, and it’s the same fare as Oyster.
Using bank cards in place of MIFARE Oyster cards accomplished that and because MIFARE was late to the mobile party TfL management decided decided their mobile strategy would be Apple Pay and Android Pay EMV card support. Meanwhile the bank card companies captured transaction fees from mundane transit fares at the gate, got the benefit of using the float instead of TfL, and got people into the habit of using credit cards for tiny purchase amounts. Our parents thought buying coffee with a credit card instead of small change was ridiculous because credit cards were reserved for ‘serious purchases’. Not anymore.
TfL Open Loop was judged a big success and got rave reviews from tech journalists around the world who hailed it as the future of transit ticketing: time to dump those proprietary transit smart cards and go all in with ‘open standard’ EMV open loop if you want the latest and greatest transit fare system. This gave transit agencies and the governments that run them the wrong idea that EMV is a cure all transit fare system solution.
1.0 shortcomings The problem is that EMV is not an open standard, it is owned and managed by the proprietary EMVCo that is wholly owned by the major credit card companies. EMV is a ‘one size fits all’ payments technology created for the needs of credit card companies and banks. It was never designed as a transit fare solution and will never evolve to incorporate transit needs. Experts agree:
A universal truth is that each transport market is highly unique. While EMV may be the best solution for some, the reality is that a standardized deployment of this model is not best suited to everyone.
There is no escaping the basic reality that EMV is a slow dumb smart card. It works well for what it was designed for: store purchases where card transaction latency is not a problem while the checkout terminal communicates with the bank system that has your account information.
Transit fare systems don’t have your bank account information on file, and there are limits with what the backend transit fare system can do when an anonymous bank card number appears on gate reader where long transaction latency is unacceptable. There are tradeoffs: the card gets verified but the transit bill gets settled long after the transit. This is why EMV open loop 1.0 only works for simple or flat fare structures. The result was a 2 layer fare system on London Oyster, Sydney Opal and Chicago Ventra:
Plastic and digital EMV open loop dumb card with basic fare transit for users with approved bank cards
Plastic transit MIFARE smart cards covering all fares including special fare discounts, commuter passes, etc., for everybody else
Oyster, Opal and Ventra wanted to add mobile support across the board but this meant supporting EMV and MIFARE. All of these are managed by Cubic Transportation Systems who worked with the bank card companies and came up with a new product to solve the dilemma: EMV closed loop transit dumb cards.
Open Loop 2.0 Apple Pay Ventra is this new EMV closed loop mobile transit card product, the launch gave us a first glimpse of the 3 layer fare system:
Plastic and digital EMV open loop dumb cards with basic fare transit for users with approved bank cards
Digital EMV closed loop dumb cards that cover regular fares and commute passes with special fares to be added later
Legacy plastic MIFARE transit cards for everybody else
It’s still a mixed EMV and MIFARE environment but MIFARE is limited to legacy plastic transit cards that can be bought with cash at station kiosks. But we can be sure that MIFARE will be phased out at some point.
The transit card is actually a EMV Mastercard prepaid debit card issued by 3rd party bank
The Mastercard as transit card is ‘closed loop’ and can only be used for transit and nothing else
The user must create an account to use the digital card. The transit account and prepaid/debit information is centralized and managed by the card issuer, nothing is stored value
All digital transit card management and housekeeping (adding or transferring cards, recharge, checking the balance, etc.) must be done in a separate app (Ventra App, Opal App, etc.), nothing can be done directly in Wallet
Express Transit is not part of the native EMV card architecture and has to be added as part of broader open loop support on the backend fare system by the operator and Apple, this is why Express Transit is missing in the initial test phase of digital Opal: the current Opal fare system does not support it
As this is an EMV bank card dressed up as a transit card, it is still limited by EMV card architecture and bank card network protocol. In place of local stored value it uses the bank card account model. On mobile this means all card housekeeping is in the app, users can’t create, transfer or recharge transit cards directly in Wallet like Suica, PASMO, SmarTrip or TAP. Direct reload/recharge in Wallet is not supported because the EMV format itself does not support local stored value. Apple Watch users can’t recharge EMV transit cards without the iPhone app. And like all cloud dependent services everything stops when networks goes down.
Mobile Suica does an excellent job of balancing and combining the strengths of local processed stored value performance, usability and reliability with the power of cloud attached services. It’s the gold standard of what a transit payment platform on mobile can achieve: leveraging transit card micro accounts to attach services and build business instead of giving it away to banks. Digital Opal testers familiar with Suica notice the difference and missing features:
Open Loop 3.0? For centralized cloud proponents, including Junya Suzuki, the ultimate dream is having one cloud based account using facial recognition for all payment and transit needs. Cubic and centralized account proponents are already looking to speed up London transit gates beyond slow EMV card technology with barrier free face recognition transit gates:
according to CUBIC…their ‘fastrack gateless gateline’ concept, which is currently conducting small user testing, eliminates physical barriers to form an extended corridor-like gateway that between 65 and 75 users can walk through in a minute, whilst their faces are being scanned and synced for payment with their smartphones
Personally I think the Ultra Wideband Touchless approach that leverages personal biometric authentication from the user’s smartphone secure enclave instead of having it hosted on somebody else’s cloud system is the safer and more practical way to go. Privacy advocates will agree.
The next installment of the Contactless Payment Turf Wars If nothing else closed loop EMV transit dumb cards reveal how bankrupt the ‘open loop is open’ argument really is. All Cubic and the card companies did was swap MIFARE for EMV, neither of which are open. And tap speeds are slower than ever with EMV the supermarket checkout protocol, so now we need Face ID transit gates to speed things up.
It’s fake debate. The real debate is online centralization for fare processing where everybody is forced to have a mobile account whether they need it or want it or not. And once everybody is forced to have an account to use transit the next step is forcing facial recognition.
The short term lesson here is that when transit agencies let banks and card companies run the transit fare concession they will never be free of them: there’s too much private money to be made off of running the backend services attached to public infrastructure. The long term lesson is that the mobile digital wallet solutions for Ventra, Opal, Oyster and OMNY are not about transit user convenience and all about convenience for misguided transit operators and their subcontractors.
Reader Questions Instead of answering questions or comments via Twitter etc., I’ll answer here for the benefit of all readers.
Q: Not being able to recharge within Apple Pay has nothing to do with EMV vs. stored value though, right? If anything, that should be easier (just move money between accounts).
A: It’s true that MIFARE stored value transit cards such as HOP Fastpass force users to recharge via the app. The point of the piece is that EMV transit card features are defined by the EMV format, bank card protocols and how it’s all implemented on digital wallet platforms. In short, bank issuers control the feature set on the backend. I have yet to see a recharge button on any EMV prepaid card in Apple Pay Wallet, I suspect we’ll always see most operations limited to bank issuer apps, even for transit.
C: The open loathing of banks and credit card companies is honestly quite nauseating (but understandable, considering what Japanese banks are like, apart from the credit card companies).
A: Banks and card companies have an important place in transit, but card company ‘one size solves all’ open loop marketing is misleading and profitable mischief. A good transit fare system is all about balance, flexibility and incorporating innovation such as mobile wallets, for the benefit of transit users and safe operations. Bank cards for example are a wonderfully convenient recharge backend, this is where they shine and add real value to the transit user experience.
But swapping out a native transit fare system with an outsourced bank card account system and tech package that the transit company doesn’t ‘own’ is asking for trouble. How much is the long term cost when it doesn’t solve everything as promised? Who really benefits: the transit user, the transit company, or the system partners and consultants?
These are the questions I think people should be asking and discussing. Hopefully my posts outline the issues clearly so people can discuss them to find the best fit long term solution based on local transit region conditions.
A: Yes the NSW Transport Minister calls it ‘cross-pollinating platforms”: NSW government set to announce the trial on Tuesday, which will begin mid-year and run until December. Commuters will be able to pay for Uber, Lime Bike, Ingogo Taxi or Manly Fast Ferry with their digital Opal 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.
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.
Getting Ventra out of the bank card business is easier said than done when the whole system is designed around open loop. Mastercard stopped issuing Ventra branded prepaid debit cards in 2017 but they have managed Ventra account services all this time. The Ventra plastic card is MIFARE DESFire EV1 which fits the standard Cubic Transportation Systems management style: all of the various transit card systems they manage around the world were designed and built with MIFARE stored value cards at the core. These include Chicago Ventra, London Oyster, Sydney Opal, Washington SmarTrip, LA TAP, etc.
An Apple Pay Ventra 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, but this time it’s disguised as a mobile transit card with Mastercard running card account services.
Apple Pay Ventra: the closed open loop transit card Tech blog coverage of the Apple Pay Ventra launch only mentioned Express Transit but there are important limitations:
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)
Direct reload/recharge in Wallet is not supported because the EMV format itself does not support local stored value. You have to reload the card in Ventra App. This really sucks for Apple Watch Ventra users. In the United States only Apple Pay TAP and Apple Pay SmarTrip support Wallet recharge, interestingly those systems are closed loop.
We have the following pieces: open loop, Cubic fare system management, Mastercard managed Ventra account services, MIFARE for plastic cards, EMV for mobile digital cards with a closed reload/recharge model that limits everything from card issue and recharge to Ventra App, and slow tap speeds.
The result is a centralized account processing mishmash of open loop and closed loop parts, ‘heavy’ in every performance aspect that pales in comparison to the local stored value process speed and flexibility of a user friendly Apple Pay Suica•PASMO that works across subway, bus and rail, for both fixed and distance fares.
The mishmash only works for CTA fixed fares and transit fare readers ‘live’ in the system. Distance based METRA fare are outside of the system with one time ticket purchases shown to the train conductor. Because everything is centralized account processing, all Ventra housekeeping must be done in the Ventra app unlike Apple Pay Suica•PASMO users who can live without an app or account: everything from recharge to card creation can be done in Wallet.
Simply put, Apple Pay Ventra is the digital rebirth of the problematic open loop based Mastercard Ventra prepaid debit card that is closed and only works on the Ventra system. 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 are slower than ever with EMV, aka the supermarket checkout protocol.
It’s fake debate. The real debate is online centralized fare processing where everybody is forced to have a mobile account whether they need it or want it or not, versus offline local fare processing where mobile accounts are optional. Guess which model delivers faster tap speeds while doing a better job of protecting your online privacy.
The lesson here is that when transit agencies let banks and card companies run the 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. 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…will it be the same 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.
A reader was kind enough to scan his 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 managed account for Apple Pay Ventra as the EMV credit card format wasn’t designed for local stored value. Just like the title says: Apple Pay Ventra is a closed open loop card.
The piecemeal MTA OMNY rollout is a lesson how not to do a transition from old system to new system. A case where poor design, poor management choices and unanticipated user interaction, each insignificant in isolation, snowball into a nagging long term problem.
The problem goes like this:
(1) Apple Pay Express Transit is opted in by default and iPhone users don’t always know it’s on. They don’t care about using Apple Pay credit cards on OMNY anyway because fare options are limited and OMNY isn’t installed everywhere and won’t be until at least the end of next year. They use good old MetroCard and put iPhone away in the right pocket or purse carried on the right shoulder.
(2) When the user gets to a OMNY fare gate they swipe MetroCard with its peculiar forward swipe motion on the reader which is located above and behind the OMNY NFC reader, which is positioned low and angled at pocket level. As “MetroCard sucks, it may take several (forward) swipes to enter”, the user leans into the gate while doing this and boom: OMNY reader activates iPhone Express Transit and charges fare without the user knowing it.
Default opt in Express Transit has been with us ever since Apple Pay Suica arrived in 2016. But transit cards are not credit cards and everything was fine. Things got sticky when iOS 12.3 introduced EMV Express Transit that uses bank issued credit/debit/prepaid cards for transit on Apple certified open loop systems. Currently these are Portland HOP, NYC OMNY and London TfL.
HOP and TfL don’t have problems with Express Transit. Both systems use contactless exclusively. HOP has stand alone validators, not gates. TfL gates have the NFC reader located on the top. OMNY on the other hand will have MetroCard swipe cards around for years to come: the OMNY transit card replacement is still in development with no release date. With the slow transition pace and current gate design expect the OMNY Express Transit problem to be around until MetroCard is dead, and OMNY is complete with the new tap only card.
In retrospect MTA should have done it this way: (1) rollout out the OMNY card MetroCard replacement first and add open loop support as the very last thing, (2) design better OMNY gates in two kinds, dual mode NFC + swipe, and single mode NFC only. This way MTA stations could do what JR East stations do: start with single mode tap only express gates on the edges and dual mode gates in the middle. As the transition progresses the dual mode gates get fewer and pushed to the sides with single mode gates taking over.
Apple could help by keeping automatic Express Transit opt in only for native transit cards (Suica, SmarTrip etc.). EMV Express Transit should always be a manual opt in. I understand Apple’s perspective: they want to present Apple Pay Express Transit as a seamless one flavor service, not good/better/best Express Transit flavors. The reality however is that the current technology powering EMV open loop fare systems isn’t up to native transit card standards. Apple can’t fix that.
Unfortunately MTA has taken the dumb path of blaming Apple instead of fixing their own problems. New York deserves a world class modern transit system, OMNY is an important step in building one. MTA management performance so far doesn’t inspire much confidence. Let’s hope they focus on the rollout and deliver it without more delays or problems.
All three fare systems are managed by Cubic Transportation Systems who also run the London Oyster and Sydney Opal systems. Cubic systems all use the same MIFARE smartcard technology but the interesting thing about SmarTrip and TAP is: (1) they are the first Cubic managed digital wallet transit cards, (2) neither system has implemented open loop fare payments for tap and go credit cards.
Ventra, Oyster and Opal all have open loop, and as of this writing Cubic has yet to deliver those transit cards on digital wallets. Why?
The SmarTrip/TAP Apple Pay launch gave us the answer that nobody wants to discuss: open loop support adds a layer of complexity and cost that stymies native digital transit card support. Complexity and higher cost means fewer choices, delays, and mediocre performance, simple as that.
Steve Jobs explained it best in his last public appearance. A great product or service comes down to focus and choices, either you can focus on making certain technologies work great on your platform versus just okay when you’re spreading yourself too thin. Ventra is spread too thin, that’s why Apple Pay Ventra and Google Pay Ventra are delayed more than a year after being announced.
Open Loop is sold as the cost effective future of transit ticketing but it’s had a surprisingly rocky time in the American market. The failure is pinned on transit companies but I think credit companies are to blame. The arguments for open loop are plastic era constructs that ignore how mobile digital wallet platforms and mobile apps have changed everything. For example the oft cited open loop benefit of plastic smartcard issue cost savings completely overlooks the cost savings of digital transit cards on smartphones.
It’s high time for the credit card industry to rewrite the open loop marketing script for the mobile era, but they don’t want to do that. Expect more of the same. In the meantime, let’s hope the SmarTrip and TAP Apple Pay rollout is a sign that Chicago will be getting Apple Pay Ventra soon.