Metrolinx Launches Open Loop in Toronto, though Not Yet with Largest Operators

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Toronto transit agency Metrolinx Thursday launched acceptance of open-loop credit payments on its commuter service GO Transit, along with three suburban bus operators, while upgrading its UP Express airport rail line from a pilot to a full open-loop launch.

The pressure has been on Metrolinx to launch long-promised open-loop fare payments in Canada’s largest city, with the agency and its main vendor Accenture having failed to deliver in past years. Metrolinx also owns and operates the regionwide Presto closed-loop contactless card program, which will provide the validator infrastructure for open-loop payments in the region.

There was no word from Metrolinx Thursday on when it would begin open-loop service for the largest transit agency using the Presto network, the Toronto Transit Commission, or TTC. TTC operates the four-line Toronto subway, along with buses and streetcars in the city and has been keen to offer open loop.

A TTC spokesman told Mobility Payments that the agency is “installing new devices that will be open-payment-ready over the next four to five months.” But there is no firm date for when these devices will be activated, he added.

A Metrolinx spokeswoman had told Mobility Payments in early May that it would equip TTC to begin accepting open-loop fares sometime this year.

With Thursday’s launch, GO Transit, which said it carries more than 70 million passengers a year on its commuter trains and buses, is the largest operator in Toronto so far to offer open-loop service.

But it only accepts contactless credit cards and credit card credentials with Apple Pay and Google Wallet, not debit. The same is true for three suburban city bus operators that also launched service Thursday: MiWay, also known as Mississauga Transit; Brampton Transit and Oakville Transit.

A large majority of Canadians use debit for low-value contactless purchases at retail with the Flash contactless application from domestic debit scheme Interac. The preference for Interac debit over credit by consumers is expected to continue when it comes to tapping for low-value transit payments.

Metrolinx noted that its UP Express airport rail service, on which it has now rolled out open-loop payments, already supports Interac debit, in addition to Visa-, Mastercard- and American Express-branded credit.

While there are Visa and Mastercard debit cards in Canada that can be tapped to pay fares, they are not as popular as Interac and agencies pay much higher bank card fees to accept them.

Metrolinx said in an announcement Thursday that it would be “adding debit payments, as well as rolling these new payment options to more transit agencies across the region in a phased manner.” It did not elaborate.

Large Canadian acquirer Moneris told Mobility Payments in May that Moneris was the only acquirer certified to accept Interac-branded debit fare payments, at the time. Besides UP Express, that included acceptance by transit operators STL, serving the Montreal suburb of Laval; and likely BC Ferries, which serves British Columbia.

As Mobility Payments has reported, the largest agency to date planning to support Interac Flash debit payments for fares is TransLink in Vancouver.

Neither TransLink nor STL in Laval promotes open loop over their respective closed-loop cards. And, so far, open loop makes up fewer than 2% of total trips for each agency.

That might change when these agencies begin to accept Interac debit. TransLink has a promotional deal with Interac, in which the debit scheme will pay the transit agency a total of CA$2.75 million (US$2.1 million) for enabling customers to tap Interac cards and credentials and promoting the Interac brand.

Still, riders often get a better deal in Canada when they tap closed-loop cards, which offer more discounts than open loop.

That will be true for the Toronto-area transit operators that launched open-loop payments Thursday. Riders will generally pay lower overall fares with Presto because of senior, student and youth discounts, as well as loyalty discounts on regular adult fares.   But GO Transit will extend the Presto loyalty discounts of 15% or more to adult riders who use credit cards.

Overall, Canada has a long way to go to catch up with other countries on open-loop fare payments, especially in Europe. The only Canadian transit authorities or operators that have launched open loop so far are the ones in Toronto, along with TransLink in Vancouver, STL in Laval and BC Ferries. There are also reports that the operator of the four-line Montréal Métro, STM, is slowly rolling out validators supporting the technology.

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