The development of transport smart cards is being seen by the major banks as the first real opportunity to launch micro-payment cards in New Zealand.
Snapper was the first transport smart card to be launched, in Wellington, bringing with it the ability to make defined small purchases, such as coffee and newspapers from approved outlets.
The industry is awaiting a decision on the successful tenderer for the Auckland Regional Transport Authority’s integrated ticketing system, for which Snapper is the front end of a bid by Infratil. The other short-listed candidates are Downer EDI and Thales.
The three have large banks as part of their consortia. Meanwhile, Christchurch is looking to upgrade its smart ticketing system.
It is quite likely New Zealand could finish up with a national transport smart card. That would involve sorting out considerable issues, such as which transport operators are paid, what they are paid and by whom, but this is not an insurmountable problem.
But first a little history, courtesy of Wikipedia.
There are two types of smart card, the memory card and the microprocessor card. The latter was developed in the late 1960s by a German researcher. The memory card concept was patented in 1974 by a French inventor.
However, the first large-scale applications didn’t happen until 1983 and it was really only in the 1990s that smart card deployment became mainstream.
In 1994, Europay, Mastercard and Visa published joint specifications for global microchip bank cards.
New Zealand and Australian banks have always liked to hang on to the cash generated by sales in Australasia: witness EFTPOS. When a bank customer uses Mastercard or Visa a clip on the ticket is remitted overseas. It is effectively a franchise operation.
Thus the attraction of a true New Zealand micro-payments card to the banks, which, additionally, would not have to buy into the cost structure of an international provider.
That’s partly why EFTPOS was first set up.
But that’s not to say that Mastercard and Visa won’t introduce a micro-payments chip on to credit cards issued in New Zealand.
The beauty of a micro-payments card is that the complexity is on the chip and so a simple back-end system suffices to manage the transaction distribution.
It’s also possible to build in increasing functionality to the card as different service providers sign up. Equally, the card could be limited in functionality, so a school pupil, for example, might only be able to use it to travel on the bus.
It’s been suggested that Auckland will make a decision on its provider some time this month, but Computerworld understands that’s more likely to occur early next year because much of the scoping of the project has changed.
Put simply, an all-singing, all-dancing integrated card, as first envisaged, has proved too expensive. The vendors have been sent back to sharpen their pencils, while ARTA trims its ambitions.