Los Angeles Transit Authority to Support Closed-Loop TAP Card in Both Apple Pay and Google Pay

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

The Los Angeles County Metropolitan Transportation Authority, or Metro, plans to introduce an Android version of its TAP closed-loop fare card, with a virtual TAP card for the Google Pay wallet, a Metro spokesman confirmed. 

That’s in addition to plans, disclosed by the authority Tuesday (July 14, 2020), that it will introduce its TAP card on the iPhone and Apple Watch. Launches of virtual TAP cards in both iOS and Android devices are expected before the end of 2020. Metro confirmed the participation with the Google Pay wallet to Mobility Payments’ sister publication NFC Times.

But Metro, the third largest transit authority in the U.S. last year in terms of ridership, most of it on buses, still has no plans to support payments of fares with contactless EMV credit and debit cards or bank card credentials on NFC devices supporting Apple Pay or Google Pay. That policy basically is unchanged from Metro’s position nearly two years ago, as NFC Times reported.

“Open payment is a capability that will cost money to develop and includes parameters that make equity more difficult for our seniors, disabled, students and low-income riders,” a Metro spokesman told NFC Times in July, referring to fare payments with contactless EMV bank cards. “We will continue to explore the need and will continue our dialogue with the various bank card companies to determine when and if we would move forward.”

Metro’s policy runs counter to what is considered a general trend for large transit agencies to move toward accepting contactless EMV payments, following high-profile launches of this technology in London and, more recently, New York City, among other places. But Los Angeles is not alone in snubbing open-loop payments, which is being strongly backed by such payments schemes and Visa and Mastercard, along with banks.  

Another top five U.S. transit authority, the Metropolitan Transportation Commission, or MTC, which serves nine counties in the San Francisco Bay Area, has decided against supporting open-loop fare payments, at least for now. Instead, like Metro, it is also focusing on its closed-loop payments card, Clipper, which is undergoing a $400 million-plus revamp by automated fare collection vendor Cubic Transportation Systems. The contract includes 10 years of operations and maintenance of the Clipper card by Cubic.

In fact, the first transit agency in California to introduce contactless EMV fare payments appears likely to be Monterey-Salinas Transit, a small bus operator that plans to test the technology for six months starting in September. The transit agency is getting much help from the California Department of Transportation and Visa to implement the project, which the department seems to think could demonstrate a “standardized payment method across different transit agencies.” That’s despite the fact the contactless EMV fare technology is already being used by several transit agencies of various sizes globally, although not by the two largest agencies in California, Metro and MTC.  

MTC, like Metro, instead plans to put its closed-loop card into NFC wallets. That includes a virtual Clipper card for Google Pay, which a spokesman told NFC Times last fall would launch by the end of 2020. The Covid-19 pandemic, while cutting deeply into transit agency budgets, is not expected to change that timeline. MTC is also likely to support Apple Pay with Clipper.

Apple and Google, while strongly supporting open-loop payments with their wallets using contactless EMV cards stored in NFC devices, are also keen to back proprietary stored-value cards that certain agencies want to promote.  

Apple Pay, for example, also supports Suica in Japan, Octopus in Hong Kong, the closed-loop transit cards in Beijing, Shanghai and other T-Union-compliant cards in China, along with the Hop Fastpass in Portland, Ore. Google supports Suica and the Hop Fastpass, as well, in addition to cards or closed-loop ticketing in Melbourne, Australia; West Midlands, UK; and Las Vegas, Nev. And Google has a deal with Cubic, the largest automated fare collection vendor globally, for the vendor to enable its transit agency customers to add their closed-loop transit cards to Google Pay. 

Further, Google can support higher-end versions of popular closed-loop transit technology Mifare in its wallet without the need for a secure element. TAP, like Clipper, uses secure versions of Mifare technology from chipmaker NXP Semiconductors. Apple also can support these Mifare products with the secure elements in its NFC-enabled iPhones and Smart Watches.

Besides Google Pay and Apple Pay, it’s unclear whether Metro, which oversees more than 20 transit agencies serving the Los Angeles metropolitan area, will also support a virtual TAP card from its own app. 

The authority had had its own official app, which included scheduling and trip planning. In May, it announced it was dropping this app and switching to the Transit app, which provides real-time public transit data and trip planning for a number of transit agencies in the U.S. and internationally. The Transit app can support mobile ticketing, as well, but for now only with QR codes or visual inspection by bus drivers and other agency staff.

Meanwhile, Cubic also has contracts with Metro to revamp the TAP card and to build a new mobile app platform.  

Cubic announced contracts in 2018 and 2019 with Metro to deliver an integrated mobile app supporting the TAP fare system. That includes linking with a hybrid account-based ticketing system, called TAPforce, which Metro has been building with cloud-computing company Salesforce. It is not a full account-based ticketing system.

According to the plan, TAPforce will enable customers to load a TAP card online, including via the TAP app, and also to use TAP to pay for other new account-based services. That includes mobility-as-a-service programs such as bike sharing, ride hailing, parking and electric car sharing. 

Cubic will also enable retailers to top up TAP cards with a merchant app and to transfer the value to the contactless TAP cards with NFC reader-writers or contactless-enabled POS terminals.  

The Metro spokesman was not immediately available to say whether the authority definitely plans to enable a virtual TAP card in its own app. 

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