As with any transit task, the addition of Interac debit cards as a fare alternative in Toronto was a long journey.
Until just recently, it wasn’t possible to utilize Canada’s Interac debit cards for tap-and-go transit flights, although charge card were supported on numerous rail and bus networks. Interac, Canada’s sole point-of-sale domestic debit card network, needed to deal with all of Canada’s banks to update their permission systems for transit purchases.
The Interac task follows a series of advancements throughout the U.S., Canada and other nations to enable open-loop payment cards — the ones customers utilize for daily purchases at the point of sale — at the gate rather of just supporting single-purpose transit cards. This shift is frequently a difficulty due to the fact that transit systems need individuals to move through the gate much faster than the time it requires to license a credit or debit card deal.
In October, Toronto ended up being the very first Canadian city to enable contactless Interac debit cards to be utilized at fare gates when Metrolinx, the area’s transit operator, released a pilot program on the UP Express. Later on, Metrolinx will present contactless credit and debit card payments to more transit firms throughout the Toronto area that become part of its Presto closed-loop transit card network.
Accepting Interac debit cards for open transit payments is essential, as Canadians are heavy debit users. In 2020, debit cards represented 28% of overall Canadian payment volume, compared to 30% for charge card, according to Canadian Payment Methods and Trends Report 2021, from Payments Canada, the domestic cleaning and settlement facilities operator.
Metrolinx’s task is likewise interesting travelers bringing Visa, Mastercard and American Express cards from the U.S. and other nations. These visitors would not have the month-to-month passes that commuters utilize, and are most likely to utilize their bank-issued cards for specific fares. Since it released a pilot of charge card payments on UP Express in March, Metrolinx has actually managed 8,666 fare payments utilizing contactless charge card from 57 various nations.
Interac needed to alter its guidelines to enable postponed permission for scenarios such as transit, ride-shares, or parking where payment is taken after use of the card. Prior to the guideline’s intro in January 2020, Interac deals might just be licensed in genuine time, as Interac needed cardholders to be familiar with charges in advance.
“As transit plans wish to get riders through their fare gates in milliseconds, Interac companies needed to make technical modifications so that cardholders are permitted through the fare gate prior to permission happening. This included some heavy lifting, which took a while,” said Andrew Yablonovsky, Interac’s associate vice president, portfolio strategy and growth. Every Interac debit card issuer had to be on board with the change, Yablonovsky said.
Interac’s pre-authorization process allows transit agencies to place a hold when an Interac card is first tapped at a fare gate. “We’re now at the stage where 99.5% of Canada’s 30 million Interac cardholders have the capability to pay for their everyday mobility and transit needs with debit,” Yablonovsky said.
Now that this aspect of the project is largely completed, Interac plans to go live with more transit agencies in the near future. “We can now focus on rolling out this option, and we’re in contact with every major Canadian transit agency that has expressed interest in upgrading their fare collection systems,” Yablonovsky said.
Metrolinx’s deployment of Interac on the UP Express is a turning point, said Simon Laker, principal consultant and global head of mobility payments at Consult Hyperion, a U.K.-based advisory firm.
“Until now, none of the other existing Canadian open transit payment deployments have accepted the national debit card Interac,” he said. “The growth of open payments has been a little slow in Canada, but we’re starting to see it really pick up.”
Both Vancouver’s TransLink and Société de Transport de Laval, the transit agency for the Montreal suburb of Laval, plan to accept Interac debit payments.
Other Canadian cities that have announced plans to upgrade their transit systems to open-loop card payments include Ottawa, Edmonton and Montreal, as well as BC Transit, the transit agency for the province of British Columbia.
“We’re seeing a trend for more and more Canadian cities to start adopting open-loop contactless transit payments in various formats such as in-app payments, e-tickets, or tapping phones or watches at turnstiles,” said Sohil Tiwari, Mastercard’s senior vice president for market development in Canada.
Credit cards are already taking off as a fare-payment option. In May 2018, Vancouver’s TransLink became the first Canadian transit agency to commercially launch an open payment system enabling contactless credit cards or smartphones to be tapped at its fare gates. In addition, Ottawa and Laval have been piloting open-loop transit payments with credit cards.
“Being able to tap Interac debit cards at fare gates will be great for low-income consumers without credit cards who want to pay straight from their bank account,” said Matt Newsome, senior vice president and general manager for the Americas at Cubic Transportation Systems. Cubic supplied TransLink’s contactless credit card payment system.
An Interac survey conducted in February 2020 found that 69% of Canadian transit riders surveyed would be likely to use open-loop card payments. This was in line with a June 2021 survey by Visa of 9,000 adults in nine countries including the U.S., U.K., Canada and Australia who use public transit networks, which concluded that contactless open-loop payments were the future of commuting.
“Contactless credit card payments on TransLink were hovering at around 10,000 a day in 2019,” said Newsome. “After a huge drop during the pandemic, TransLink ridership has rebounded quite well. I estimate that TransLink open payment transactions could now be as high as 20,000 a day.”
Société de Transport de Laval released a pilot of contactless Visa and Mastercard charge card payments for bus flights in Laval in 2017. The transit company is now presenting contactless card readers to all of the city’s buses, with conclusion anticipated by spring 2022. The company prepares to begin work quickly on including contactless Interac debit card approval on its buses, according to STL representative Estelle Lacroix.
“Despite the pandemic, we’re seeing rather high use of contactless charge card, with deals balancing in between 11,000 and 21,000 deals each month,” Lacroix stated. “Open payments are used by occasional riders or by regulars as a quick fix when they experience a problem with their monthly pass.”