The UK Cards Association

Contactless Transit Project

November 2015

Contactless on TfL

Contactless payments on

buses –December 2012

Phase 1

London tube pilot

Live - March 2014

Phase 2 Pilot

• Roll-out on London ‘Tube’ –September 2014

Full launch

• The proposition: same price and speed as Oyster with added convenience (no need to top up)

• Over 212m contactless journeys made by 21 October 2015

• 7.1m unique contactless cards used (issued in 61 different countries)

• 400 – 450K contactless cards seen on a typical day (15-20k seen for the first time)

• 11% of all UK contactless transactions in Sep 2015 took place on TfL

• 21% of TfL PAYG journeys took place on contactless

Starting with the customer

• TFL research - satisfaction with contactless remains high and stable at 77%. Reasons:

• Transport Focus research - in London, Oxford and Manchester, 69% of passengers without a seasonticket would be interested/very interested in contactless payments on transit, with applicabilityoutside of transport seen as a big bonus.

• Other customer benefits:

- secure and transparent payment

- ease of travelling between transit operators

- usability on different form factors, including card, mobile and wearables

You’re not carrying money. You’re not waiting for a ticket. You’re not going to the machine. It’s speedy.

Potential User, Female, 60+, London

Contactless transit project

• Purpose - to create a national contactless transit framework for the card payment and transitindustries by end 2015, to help transit operators consider whether to implement contactless, andensure consistent customer journeys where used.

• Anticipated transit operator benefits:- increased journey volume

- increase speed of customer throughput

- operational cost savings from reduction in ticket management

We are here

Use cases and

ModelsRisk & Liability

AgreementTransaction Processes

Implementation Guidelines Comms Toolkit Framework

Governance

Stakeholders

Customer use cases

Intracity – Mass Market, Medium to Low Value

Town to City/ Commuter –Medium to High Value

– Customer Types• Single adult• (international) visitors and tourists

– Operator Models• Cross operator, multi-ownership models

(e.g. multiple operator, multi infrastructure), single regulated and unregulated

– Fare Types • Full rate

– Transit Modes• Trains• Underground• Bus • Tram

Model 1:

Standard Retail Model

in a Transit

Environment

Model 3:

Card as Authority to

Travel (CAATT)

Model 2:

UK Contactless for

Transit Model (used

by TfL)

• PAYG - Cash replacement model

• Known fare (flat or driver interaction)

• ‘Entry level’ option

• PAYG• Known or Unknown

fare at start of journey• Charge made at the

end of each day or at the end of each completed chargeable fare

• Pre-purchased travel• Known fare• Charge made at point

of purchase

No

limit*

* Depends on customers available funds

Break

point

£30

Up to

£30

Suited to low to medium value single operator bus &

tram services

Suited to low to medium value multi-operator train, underground, bus &

tram services (e.g. commuter)

Suited to higher value (e.g. intercity) multi-operator, multi-mode

services

Contactless Transit Models

1. Standard

Retail Model

in a Transit

Environment1. Customer uses their contactless card tomake a flat or known fare bus journey.Touch in only.

2. Customer can view charge ontheir bank statement.

Station A Station B Station DStation C

1 2 3 4

1. Customer uses their contactless cardto make a variable fare train journey.Touch in and touch out.

2. Customer uses theircontactless card to make a flator known fare bus journey.

3. Customer uses theircontactless card to travelon a train.

4. End of dayprocessing settlescustomers dailycharge.

5

5. Customer canview charge on theirbank statement.

1 3

1. Customer purchases their ticketonline and associates it with theirContactless Card.

3. Customer uses their contactless card astheir ticket to travel on the train.

2

2. Customer can view theirjourney on their issuerstatement.

Station A Station B

1 2

2. UK

Contactless

for Transit

Model

3. Card as

Authority to

Travel

Contactless Transit Models

Risk & Liability Proposal : Standard Retail Model

Risk Mitigation Processes:

• The gate/ validator checks the card is not counterfeit

• Deny Lists at the terminal can be used to stop lost or stolencards, and cards that have previously received a decline, fromcompleting the purchase

• Revenue Inspection to include Contactless payments

• Online capable, contactless terminals are required

• For online capable, contactless only terminals, when transactionvalue counters on the card are breached the card does notrequest a card holder verification such as a PIN

Liability Sharing

• For transactions where no authorisation isrequired using retail terminals (includingthose offline transactions that generate aTransaction Certificate) the card issuer isliable for charges to the full amount (up to£30)

• For payments made where anauthorisation is required and is thendeclined the merchant is liable for thevalue of the declined authorisation(includes payments for delayedauthorisation where the authorisations isdeclined)

Sharing Risk & Liability: Model 1

Risk & Liability Proposal : UK Contactless for Transit Model

Risk Mitigation ProcessesTo manage the risks of the card being fraudulently used (as thecardholder is not verified at point of payment), or insufficientfunds in the cardholder’s account (as the fare may be unknowninitially):

• The gate/ validator checks the card is not counterfeit

• ‘Deny lists’ are sent to the gates/ validators to stop cards thatare lost, stolen, or with outstanding debt from being used

• When a new card (or one that has not been seen for 14 days) isdetected, online authorisation with the card issuer takes place(zero/ low value or daily spend)

• Online authorisations also take place for the daily spend whenthe cumulative spend value reaches £15 (Trigger Limit)

• Revenue inspection devices can either communicate with thecard terminal to check if the customer’s card has been touchedin (e.g. in the case of a bus) or pass the information to thetransit operator’s back office which can assess at the end of theday if the card has been touched in or out correctly.

Liability SharingFor the residual risk of insufficient funds being available in the cardholder’s account:

• For denied authorisations less than or equalto £10.00 the card issuer takes the liability.

• For denied authorisations over £10.00 thetransit operator takes the full liability andundertakes the debt recovery. This is donethrough the re-submission of authorisationrequests several times over a number ofdays (e.g. after 1, 4, 14 and 28 days)

• Annual review process to ensure the modelremains commercially and operationallyviable for both industries

Sharing Risk & Liability: Model 2

A

Customer taps card

on terminal in shop

Can

card be

used?

Transaction

Value & Type

No Yes

No Yes

No Yes

No Yes

No Yes

Can

card be

used

offline?

Value under

CVM limit?

Value under

floor limit?

Counters

under limit?

No Offline - YesTransaction

confirmed

by card?

Transaction

Stopped

Online

terminal

support?

No

Transaction

Stopped

Yes

Online

Auth

(No PIN)

PIN entry &

online auth

PIN &

online auth

terminal

support?

No

Transaction

Stopped

Online

auth

terminal

support?

No

Transaction

Stopped

B

Transaction

Authorised

(TC)

Transaction

Stopped

(AAC)

Authorised

?

Yes

Yes (real time or delayed)

Transaction

Stopped

Transaction

Authorised**

Authorised

?

Transaction

Stopped

Transaction

Authorised

B

A

B

Online

Yes

(ARQC)

Authorised

payments settled at

the end of the day

PIN

support

on

terminal?

No

Yes

CVM: Card Holder Verification Method (triggered at £30)

Floor Limit: Set by card scheme (£15 or £20)

Auth: Authorisation for the payment from the card issuer

TC: Transaction Certificate that accompanies the settlement

AAC: Application Authorisation Cryptogram (Decline)

ARQC: Authorisation Request Cryptogram

PIN entry: In the UK this is always offline

** The liability only passes to the issuer once a successful authorisation has

taken place not at the point the purchase is made.

Transaction Processes: Model 1

Customer

taps card

Card

OK?

Customer not

allowed to

travel

Customer allowed to

travelNew card

or not

seen in 14

days

End of day

Obtain new auth

Tap sent to central

system

Calculate charge

Yes No

Request auth

Add to deny list

Reset

Cumulative

Spend &

Time Limit

Fare Value

>Trigger

Limit?

Auth

approved?

Request

settlementOperator

liability

NoYes

Yes

No

Yes No

Yes

NoAuth

approved?YesNo

A

A

Fare =<

issuer

liability limit?

Transaction Processes: Model 2

1. Card Payments Overview & Commercial Framework

2. Description, processes and deployment of Models:

i. Transaction Processes Diagrams

ii. Minimum Support Requirements

iii. High Level Architecture and Processes

iv. Deployment Activities and plan

v. Back Office components & Processes

vi. Known Restrictions

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Define Customer Proposition 2

Define Business Case 2

High Level Business Requirements 2

High Level Solution Design 2

Commercial Agreements 4

Detailed Business Requirements 2

Detailed Technical Requirements & Design 3

Service Monitoring Requirements 2

Define customer communications plan 2

Service model definition 2

Acquirer procurement 4

Terminal Procurement 3

Device testing & certification 3

System Development & Test 2

Functional, performance and scalability testing 2

Acquirer testing and certification 2

Device Installation / Rollout 2

Vanguard Testing 2

Limited customer testing 2

Go Live

Deployment StepEst Time

(Months)

Month

Implementation Guidelines

FRONT OFFICE MIDDLE OFFICE BACK OFFICE

CU

ST

OM

ER

SY

ST

EM

Customer logson to portal

Customer calls helpdesk

Debt recovery request

Reader Tap

Landing

Device OSS

Payment Card Processor

Customer

Portal

Authorisation(2)

System Configuration

Data

WarehouseSystem

OSS

Acquirer

EncryptedTaps

Status ListUpdates

RawTaps

Status ListUpdates

Status List

Update

Refunds

Journeys& ChargeService

Ref. & Config.

Data

Ref. & Config.

Data

Usage and System Data Monitoring Data

Status ListUpdates

AuthorisationReq./Resp

SettlementReq./Resp.

£

MonitoringData

Steve Ramsay @ Kettera LTD

Interactive Voice Response

(IVR)

IVR Call Routing

PAN to Token Translation

TokenisedTaps

PAN to Token Translation

Routed Calls

CPC

Tap Generation

Status List Management

Device Monitoring

Tap ValidationTokenisation

Settlement(1)

Debt Recovery

Ad Hoc Refund

Travel Authorisation

Authorisation(1)

Reference Data

System Configuration

Reporting& Analytics

Systems Monitoring

Tap Encryption

Tap Decryption

Remove from Status List

Journey and Charge Statements

Customer Notifications

Customer Registration

Tap Aggregation

Settlement(2)

Cash Replacement

Back Office

Agent

PortalIssuer

Customerreceives statement

Settlement Responses

Tap to Journey

Customer taps on bus reader

3. Revenue Inspection Approaches

4. Legal & Regulatory Considerations

5. Implementation Considerations:

i. Deny List Management

ii. Debt Recovery

iii. Migration & Upgrade Considerations

Implementation Guidelines

The Communications Toolkit covers the following topics:

Customer Communication:• Challenges – of getting customers to migrate to different payment options• Content – explanation of how contactless payments work; the three models; customer

experience; key messages; and issues to address (e.g. card clash)• Channels – guidance on marketing; social media; press; website and consumer research• Plans – pre-launch; during launch; and post-launch

Staff Communication:• Challenges – of getting staff to embrace and understand contactless• Content – explanation of how contactless payments work; troubleshooting; fare breakdown• Channels – guidance on training, materials, contact centres

Materials:• Existing consumer research• Frequently asked questions• Call centre matrix• TfL collateral examples

Communication Toolkit

Communication Toolkit

EMV CONTACTLESS LIVE

EMV CONTACTLESS PILOT

Development & Pilots* Standalone regional Linked regional Full UK rollout

* Outside of TfL

2016 2017 2018 2019 2020

Possible to offer:• PAYG Single Journeys• PAYG Regional

• Widespread [30% of all journeys] linked regional transit schemesPossible to offer:

• Regional Pre-Purchased travel (season, carnets & concessions) through Card As Authority to Travel - CAATT

• UK wide Back-Office ‘Broker’ launched

Possible to offer:• Regional PAYG

launched & CAATTpilots with some cross operator support

First widescale Contactless Transit launches outside London

• EMV Contactless is an option for [70%] of all transit journeys in the UK

2021 2022 2023 2024 2025

Draft Roadmap

Supporting Activities

Activity PriorityEssential/ Highly Desirable to the

projectScale Customer Groups

Transit

UK CardsDfT / Devolved

Government / SCPStatus

(ATOC, RSP & CPT)

UK Back Office Development

H E Large Input and review(Joint) ATOC/RSP lead

with DfT/SEFTInput

(Joint) Lead (initially via RSP)

Initial scoping started

Framework Governance Review Process

H E Low Input and review Input and review. Lead Input and review.Post

project

Card As Authority to Travel (CAATT)

H E Large Input and review Joint Lead Input Joint LeadInitial

scoping started

Pilots/ Proof of Concept H HD Medium Input Co-leadInput, review and

support Co-lead tbc

Contactless Transit Proposition, Roadmap and Strategy

M HD Low Input and review Input, review and agree Input, review and agree Lead tbc

Best Fare Development & Fare Simplification

M HD Large Input and review(Joint) ATOC lead with

DfTN/A

(Joint) ATOC lead with DfT

tbc

Commercial Framework H HD Low n/a Input / review Lead Input / Review tbc

Customer Communications Group

M D Medium Input, review and agree Input, review and agree Co-lead Co-lead tbc

Regional Engagement L D Medium Input and review Input and reviewInput, review and

supportLead Ongoing

There are some activities that are essential to enable the Contactless Transit Project to be commerciallysuccessful; others are highly desirable or desirable.