Does your business case for EMV stack-up?

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The idea of having a ticketing system that can accept a payment token that the customer already has in their pocket, is very appealing. The benefit for the customer is a seamless transaction, the benefits for the Transport Authority include a reduction in the cost of issuing cards and the potential to attract new and infrequent public transport users.

However, success stories of EMV in transit may not always tell the full story, and here are four tips to help ignite internal discussions about building this business case.

Points to consider:

1. EMV is full fare only.

Paying a full adult fare is acceptable for infrequent travellers, single journeys and tourists, but not ideal for regular commuters who purchase season passes, or people with concession passes such as children, students, elderly or people with disabilities. Capping rules (usage-based fares) can be applied and may or may not require registration. This goes some way to accommodating more frequent travellers who prefer to use their bank-card over the closed-loop card option.

2. EMV is an additional cost centre.

One of the key outcomes for an account-based system is to reduce the cost of fare-collection, however that is dependent on the level of adoption. If EMV is being run in parallel to a card-based system, you are carrying an increased cost structure, without reducing your existing cost structure.

3. EMV is preferred by a subset of passengers.

Anecdotes from several cities which are using EMV, show that an adoption rate of 20% is the most realistic target of total transport journeys. For example, EMV is used in 22% of all journeys at Transport for London (TFL). Similar expectations are expressed in recent articles on EMV acceptance at Transport for New South Wales1 and Translink, Canada2 where it is stated that EMV is for a distinct subset of customers and not designed to replace existing smart-card usage.

4. EMV has increased risk

In a card-based system funds are pre-paid onto the card. Moving a portion of transactions to a ‘pay later’ model introduces a risk where the funds may be declined. In many schemes, risk-sharing models have been established between the issuing banks and the Transport Authority, particularly around the first tap or first ride risk. The business case to introduce EMV would depend on the appetite for this risk.


Mark Streeting – LEK consulting 
“If you are adding EMV as an additional payment channel to your existing card-based system, make sure that your business case stacks-up. You run the risk of increasing the cost of fare collection by pushing people from lower cost channels such as auto-load to EMV.”

“Bolt-on EMV as opposed to a full system refresh, would seem to make the most sense in major global cities, with very large tourist markets such as London.”


To learn more about the pros and cons of implementing an account-based ticketing model, along with high level industry terms and definitions, please download the full white-paper.

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