Calgary Transit Launches Mobile-Ticketing Service with Plans to Expand to Open Loop

_{(This premium article was originally published in July 2020. © Mobility Payments and Forthwrite Media.)}

Canada’s third largest city, Calgary, has introduced its first electronic fare payments service, offering mobile ticketing from a software-as-a-service platform provider, with plans to enable customers to pay for fares with their contactless EMV credit and debit cards and NFC wallets. 

Calgary Transit’s new My Fare app offers customers an alternative to the paper tickets, passes and cash they have been using for years. (A closed-loop contactless card project failed five years ago.) But despite a push by transit agencies to eliminate cash as an option for their customers to pay fares in North America and beyond in the aftermath of the Covid-19 lockdowns, a spokeswoman for Calgary Transit told Mobility Payments’ sister publication NFC Times there are no plans to phase out cash or paper in Calgary.  

“Our customers have been looking forward to our mobile payment system since before the pandemic began, but many still prefer using cash or paper tickets to buy their fares,” she said, adding: “We have certainly heard from customers that they’re happy to have an option to pay their fare without having to use cash or handle paper tickets.”  

Calgary Transit launched a pilot of the mobile-ticketing service in mid-2019. And the spokeswoman said the Covid-19 pandemic did not delay the rollout of the service, which had always been planned for around mid-2020.  

Providing more than 160 million trips last year and serving a city of more than 1.2 million inhabitants, Calgary Transit is one of the largest transit agencies not to have introduced a reloadable closed-loop card system. The transit agency had planned to enable customers to pay fares with the contactless “Connect Card,” but canceled the $5 million project in 2015 after many delays, as NFC Times reported last year.

The agency said in May 2019 that it had no intention of retiring paper tickets and cash, and the Covid-19 pandemic has not seemed to have changed those plans. With the My Fare app having been introduced less than two weeks ago, it’s too early to determine the impact it is having on revenue, said the spokeswoman. 

But it’s also clear that giving riders an electronic payment option was long overdue, even before the pandemic. Calgary Transit is using a “fare-payments-as-a service” platform from UK-based Masabi, which calls its offering Justride. 

Calgary Transit customers can purchase adult and youth single tickets and daily and monthly passes, along with tickets to the airport, in the My Fare app, using credit and debit cards they can store in the app. The mobile-ticketing service is available on Android and iOS devices and works on both of the agency’s transit modes, the CTrain light rail network, which accounts for around 55% of trips; and on board buses, which make up the rest.  

Users display their tickets or passes for visual inspection for the CTrain. But for buses, the agency has installed through Masabi more than 1,000 validators that include QR code scanners and also can accept contactless EMV bank cards and NFC wallets. The Calgary Transit spokeswoman said that the agency plans to enable users to tap their contactless and NFC wallets to pay fares, along with implementing “full-account-based ticketing,” but said there is no timeline yet for when this will happen. 

It’s unlikely that Masabi can support contactless EMV payments on its platform yet in North America. The vendor told NFC Times it will be ready first to support such contactless EMV payments in Europe, not North America, this summer. 

The Calgary Transit spokeswoman said it will cost around CA$5.5 million (US$4 million) to gear up for the My Fare program, which would mainly cover the 1,000-plus validators, including certified EMV card readers.  

Calgary Transit is not the only agency planning to expand to open-loop payments from a closed-loop mobile-ticketing service. As NFC Times reported earlier, a consortium of 13 small and mid-tier transit agencies in the U.S. states of Ohio and Northern Kentucky, which also uses Masabi’s Justride for mobile ticketing, is planning to enable contactless EMV payments, as well. The consortium is now installing more than 1,000 validators on buses through Masabi. The units cost $1,200 apiece, plus $425 per unit for installation, not counting warranty and training, the group told NFC Times. 

Agencies that plug into software-as-a-service platforms for fare collection–which are also offered by such providers as Delerrok, owned by U.S.-based Cubic Transportation Systems; and U.S.-based Token Transit–do not have to pay any upfront capital costs if they only introduce mobile ticketing with visual inspection by bus drivers or other transit staff. When they also want to accept closed-loop or open-loop cards and NFC phones or enable users to scan QR codes from their mobile handsets, they have to install validators.

Besides any upfront capital costs, transit agencies using the software-as-a-service platforms pay a percentage or flat fee based on transactions, or a percentage of gross ticketing revenue. Masabi usually charges a percentage of the transaction amount, which ranges from 1% for very large agencies to perhaps 4% or more for smaller agencies, not counting credit and debit card transaction fees that agencies pay when customers buy their tickets in the app.

The software-as-a-service platforms service have generally proved popular with riders, with some accounting for 30% to 40% of tickets sold, as NFC Times reported. 

And demand is growing for these services in the aftermath of Covid-19 lockdowns, with agencies seeking to launch the services quickly to reduce use of cash and paper tickets, which are considered more risky for spreading the virus.  

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