Rome Latest Transit System to Launch Open-Loop Fare Payments; also Enables Monthly Passes with EMV Cards

_{(This premium article was originally published in September 2019. © Mobility Payments and Forthwrite Media.)}

Rome has become the second major city in Italy–and one of a small but growing number of large cities globally–to enable riders to pay transit fares with EMV contactless credit, debit and prepaid cards and NFC devices.

Riders are now able to tap to pay with Visa-, Mastercard- and American Express-branded cards and card credentials carrying these brands on NFC devices at gates of the three-line Rome Metro and on three commuter rail lines serving the Italian capital. While riders can’t tap directly to pay on buses, trams and trolleybuses in Rome yet, they can transfer on these transit modes after tapping first at gates on the metro or the commuter rail lines.

Rome transit operator ATAC launched the service Sept. 18. About half of ATAC station gates on the metro and at participating rail stations are reportedly equipped with EMV-compliant readers, with plans calling for the remainder of turnstiles to be enabled by the end of the year. 

Rome follows Milan, which launched acceptance with Visa- and Mastercard-branded credit, debit and prepaid cards in late June 2018 on its four-line metro, as Mobility Payments’ sister publication NFC Times reported. As with Rome, users can only use contactless EMV to transfer on buses, trams and trolleys, after first paying, in the case of Milan, at metro stations. Contactless transit payments are also available in the Italian city of Venice, but only on water taxis or waterbuses. 

Both Milan and Rome also offer daily fare capping with contactless payment, with Rome’s ATAC, charging a maximum fare of €7 (US$7.69) on the fifth and succeeding rides. And significantly, if users purchase a monthly pass online with a contactless EMV payment card, they can register the card and use it as the monthly pass on contactless POS terminals, noted ATAC. These terminals will show the card on a “whitelist” and allow the cardholder to pass through the gate. 

Bank card processor SIA, which provides the “digital platform” for the contactless service in Rome, as well as those in Milan and Venice, said it also enabled the monthly pass in Rome. It called the monthly pass using contactless EMV cards a “first.” But it’s not clear whether users of the monthly passes could use an EMV card loaded onto an NFC device supporting such payments services as Apple Pay and Google Pay. Apple Pay and Google Pay are accepted for individual or daily capped open-loop fares in Rome.

Intesa Sanpaolo, one of Italy’s largest banks, is reportedly involved in the service, as well, probably as the merchant acquirer. 

In addition, while Visa- and AmEx-branded cards are accepted for fare payments in Rome, ATAC is promoting its connection with Mastercard first and foremost as it touts the new open-loop fare collection service to customers. That is no doubt in exchange for promotional consideration paid by Mastercard. 

Fare payments with EMV contactless cards and NFC smartphones and smartwatches have already launched in such major cities as London, Chicago, Vancouver, Sydney, Guangzhou, Singapore and Portland, Ore. A number of other major cities are planning to make the move or have already launched trials or limited rollouts, including New York City, Moscow, St. Petersburg, Boston and Brisbane. 

Accepting open-loop contactless cards helps transit authorities and operators reduce their costs for handling cash and other expenses for running their closed-loop card programs. But even after launching open-loop fare collection, the agencies always have a long phase-out period for the closed-loop card programs, if they plan to phase them out at all. 

Open-loop fare collection also offers more convenience to riders, who don’t have to top up closed-loop cards. And foreign visitors using the transit network usually can tap their domestic contactless credit and debit cards or NFC devices to ride, as long as the cards sport an international payments brand supported by the host transit agency.  

But there are challenges to enabling contactless EMV payments of fares, too, including the costs of installing and certifying POS terminals at gates and on board buses and implementing a back-office, or account-based ticketing, system to help manage the fare payments service. 

In addition, riders tapping with credit and debit cards often don’t know the actual fares their cards will be charged until later, since unlike with retail purchases, transit fares are usually aggregated and processed at the end of the day. 

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