Coronavirus (COVID19) has made us all conscious about avoiding unnecessary human contact to protect oneself from getting infected. This made many people think about how cash can be one of the careers. I am not familiar with the biology of the virus and how exactly this transmission would work. However if people are worried about cash then exchanging cards during transaction or touching POS machine to input PIN can also be a problem. That means in the days of COVID-19 safest mode of payments (talking from health perspective here) would be contactless payments like QR codes, NFC, RFID, Tone etc. Transit payments is one of the most popular use case of contactless payments around, which has been even more mainstream since the push for Fastag for toll payments by Indian Government.
During my banking days, I got the chance to lead the solution for Jaipur Metro (JMRC), which was being managed by DMRC. So essentially I got to study how Delhi Metro payments work and also design the solution for JMRC using the learning from Delhi project. In this post I would like to explain some of the key factors to be kept in mind while designing such a solution.
Transit payments are a different category for a very simple reason because of its need to be exceptionally fast, much faster than any other payment method we use. If the transaction is not processed with-in a fraction of second end-to-end we can see endless queue of angry customers forming, be it payments at toll-booth or entry and exit points of metro stations or entry and exit points of your city bus. We do not have the luxury to take 10-15 seconds to process the transaction, when it comes to this particular use case. That takes online authentication out of the picture. Offline authentication is the method of authentication where transaction is authorized locally by the instrument itself without traveling to issuer host system over the network.
The technology commonly used for this type of transaction processing is RFID (Radio Frequency Identification). When you are issued a card or a sticker or any other form factor, it typically contains an RFID chip, which communicates with the receiver installed at the gates of transit system to read the balances and post transactions. The instrument used for this purpose is typically a prepaid card, where the balance is updated at the CHIP locally, hence eliminating the need to communicate with the server every time transaction needs to be processed.
There are combo version of these cards also popular, which are nothing but debit/credit cards with either an additional RFID Chip embedded inside the plastic dedicated for transit payments prepaid card or have a separate dedicated block in the EMV chip for this purpose. Essentially they are for all practical purpose two cards linked to a single plastic.
How a typical transaction works?
Transaction at single interaction point like toll-gate is very simple because there is a fixed amount to be deducted every time you pass through the gate. The receiver installed the gate access the balance on your Fastag and update the balance by deducting the fixed amount.
Transactions with two gates i.e. interactions at entry and exit points like metro gates or city bus are slightly more complex. In this case at the time of entry the receiver installed at the gate checks the balance and updates the entry point on the CHIP. At the point of exit when you flash your card the receiver at the exit gate calculates the fare based on the entry point and deducts the amount from the prepaid card updating the balance accordingly.
How the card is reloaded?
Reloading of these cards works very similar to any other prepaid wallet or prepaid SIM, where you go to partner bank’s point of interaction Branch, ATM, NetBanking, Mobile Banking etc (depends on the partner bank) provide your unique ID (ID tagged to the RFID Chip) and make the payment.
The bank then communicates this to the transit partner and this reload transaction is updated in their system. The moment your card comes in contact with the sensors at transit partner the balance is updated in the CHIP. You can alternatively access special devices installed by the transit partner for specific purpose of load/reload of transit card. This can even be done over the counter by transit partner.
In JMRC project we even had provision of stand-in instruction wherein every time sensors at transit partners read the balance in your transit card go below a pre-set threshold the bank will get a file from the transit partner with all such card IDs, banking partner will then debit their respective linked accounts by a predefined amount and send the file back to transit partner to update the balances in their systems.
NPCI has developed specifications under Rupay Contactless Product umbrella, which is now the basis for NCMC (National Common Mobility Card), which is expected to be the dominant mode for transit payments in near future.