Electronic purse (ePurse)

EMV (Europay, MasterCard, VISA) is a standard for electronic payments developed in the banking sector.  EMV-authorized cards are electronic money. EMV cards are issued or overseen by banks or other deposit-taking / credit institutions authorized by the financial regulator.

From the perspective of passenger transport, EMV cards are broadly similar to electronic purse. The principal differences are:

• The EMV cards function as cash and can also be used in any non-transport location that accepts EMV cards.
• Many or all of the cards may be issued independent of the transport sector, and are then presented on the transport system for use (just as credit or debit cards are issued by banks and presented for payment wherever the customer wishes to make purchases).
• The security requirements are significantly higher than for other fare collection media used in passenger transport. This has particular implications for the design and software through the fare collection system (the ETM, card reader, back office systems).
• The specifications are determined by the banking system.

EMV cards are normally used in the same way as any other electronic purse. The electronic money is used as cash-equivalent to purchase travel. The transit agencies will decide what incentives they will offer (if any) to users of EMV cards.

Benefits of EMV cards (relative to electronic purse) are:

• Third parties (banking sector) issue cards which can be accepted on public transport.
• The transit agencies do not have to issue the cards or get involved in the account and funds management.
• Cardholders who do not normally hold a public transport fare product can use their EMV card to travel on transit services.
• Very high security, within a standardized and well-developed technology.

Cautions with regard to EMV cards (relative to electronic purse) are:

• Technical complexity, which requires a substantial level of technical competence within the organization.
• Need for a very high level of electronic security, and the capacity and commitment to managing this security correctly.
• Need to install special security devices (secure application modules) on all ticket issuing and reading devices.
• Some agencies get concerned about ceding a significant degree of control over their fare collection systems and customer relationship management.
• The transaction fees and other charges from the card issuers and banks need to be clearly defined and well understood.