Smart-card transactions

Smart-card encoders are secure devices that can communicate with the smart-card. They are authorized to change the files and data within the smart-card, to activate applications and utilities within the card, and add or adjust values and permissions.

The essential aspects of the devices are quite simple – a card reader / writer, which is connected to an authorized PC or network server that hosts the card management and application-loading software. In practice, the device is also packaged to reflect who will use the device (back-office personnel, agent, self-service by the customer), where it is located, the functionality, the number of cards being encoded (singly or in bulk) and the security requirements. 

The smart-card encoder may be integrated into another device (e.g. a booking office system or a multi-functional self-service ticket vending machine).

In some cases the smart-cards arrive at the transit entities pre-encoded, e.g. disposable stored-value cards that are distributed directly to vendors for sale without requiring any further intervention by the transit agency.

These devices perform three main types of function:

• ‘Initialize’ a smart-card – i.e. make it ready for use. Smart-cards are usually supplied in a state not yet ready for use. This is partly for security reasons (it remains of low value if stolen), partly for administration and inventory control, and partly because the card may need to have specific information added for the assigned fare product or cardholder. When the card is issued to the customer or released for distribution to sales agents, it will be activated and will have user-specific data added to it.
• Add, remove or modify application and authorizations. This is used to add new fare products (e.g. stored value, weekly tickets), or to activate authorizations for concessionary passes. In some cases, certain applications are preloaded to the card, and only require activation.
• Add value or period of validity. This is used to add or ‘top-up’ stored value or multi-trips, or to extend the time period of travel passes.

Different devices may be authorized to perform one, two or all of the above functions. The back-office devices of the transit agency may be authorized to perform all of the functions; a vendor device may be authorized to add applications and to add value; a self-service vending machine or the on-bus ticket issuing machine is likely to only be authorized to add value.

Benefits of smart-card encoders are:

• Customer-facing locations (booking office, agents, and self-service machines) can offer a wide range of card support services.
• Applications, authorizations and value can be added to cards in a way that is specific the products required by and the profile of the cardholder.
• Applications, authorizations and value can be added to existing cards, as and when they are required by the customer.
• Customer services can be performed through a wide range of controlled and distributed outlets and machines.
• Initialization and application-loading can be processed in bulk, even when the individual’s cards have different requirements.
• It is not necessary to revert to the card supplier or card equipment vendors for value-adding services.

Cautions with regard to smart-card encoders are:

• Technical complexity, which requires a substantial level of technical competence within the organization.
• Strong device and inventory management.
• Need for a high level of electronic security, and the capacity and commitment to managing this security correctly.
• Potential technical complexity of integrating the encoder with other devices.