Near Field Communication (NFC) and Transit: Applications, Technology and Implementation Considerations

Publication Date: February 2012

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NFC technology has the potential to redefine the mobile arena by offering new opportunities for people to communicate, make purchases, and access information. However, the complexity of the NFC ecosystem and the challenges of widespread deployment have so far limited NFC deployment primarily to pilot testing.

A combination of changing demographics and new technologies challenges the transit industry to look beyond traditional means of providing information to riders; dynamic message signs and personal-computer-based Internet services must be supplemented. Riders want to access more information than just schedules and routes, and they require real-time transit information, including next vehicle arrival time. The majority of riders use mobile phones and smart phones, which provide Internet access and mobile e-mail service. NFC offers an additional opportunity to access information: touching a handset to the tag on a smart poster can reveal several lines of text, a Web address, or phone number. In addition to reading posters with NFC tags, other uses include building access, personal identification, ticketing, and purchases.

Riders in large U.S. cities are also accustomed to fare payment using contactless cards, which can transition to fare payment using a mobile device. NFC supports a variety of mobile phone applications and extends the benefits of smart cards by combining a computer chip and an active reader in one package. An NFC-enabled device can operate in several modes, including peer-to-peer, reader-writer, and card emulation. To an external reader, the mobile device operates in card emulation mode and appears to be a traditional contactless smart card. A smart card chip serves as the SE that protects stored data and enables secure transactions.

For payments, NFC supports a richer user experience than contactless cards. Transit applications can deliver new capabilities, including payment acquisition, system entry/exit, payment processing, and post-purchase inspection processing. In effect, transit ticketing is poised to become one step in a seamless process of purchasing, topping-up accounts, planning trips, and viewing next vehicle arrival information.

Understanding the NFC ecosystem is central to understanding the dynamics and potential deployment of NFC-enabled transit applications. The complex landscape includes many new stakeholders. First and foremost, mobile NFC services rely on trust: applications such as bank cards and transit tickets must be issued and used with NFC phones without compromising security. A TSM can provide outsourced management services to several service providers. Ultimately, NFC ecosystem stakeholders must decide what services should operate in-house as opposed to being outsourced to a TSM.

Numerous NFC trials have been executed worldwide over the last three years, and many of these trials have included the use of TSMs. The trials play an important role in developing commercial readiness by providing an environment in which to test and verify technologies, processes, end-user experience, and assumptions in general. With the anticipated launch of new NFC phones in 2012, the mobile NFC ecosystem is ready to move from trials to commercial deployments, and TSMs are available to support these initial implementations. While additional work is required in certain areas of the TSM ecosystem, the standards and technologies in place are sufficient for TSM services to support commercial launches. Properly designed TSM services and the underlying TSM platform can (and will) evolve to meet future market requirements.

A major challenge facing the transit industry is the creation of a mobile strategy. The industry must immerse itself in the operational details of the NFC ecosystem and thoroughly understand the technology and business models to realize the benefits of the NFC value proposition. Forming partnerships with a variety of entities, from handset manufacturers to industry leaders are critical to the industry’s future success.

About the White Paper

This white paper was developed by the Smart Card Alliance Transportation Council to discuss mobile applications that are relevant to the transit industry and to provide an overview of the benefits and implementation considerations for NFC applications.

The white paper presents a high level perspective on different NFC applications that can be used in the public transit industry. The Smart Card Alliance Transportation Council has prepared this white paper to foster greater understanding of NFC technology, explain its role in the transit industry, and shed light on key issues facing the transit industry in developing a mobile strategy. This white paper explores the use of NFC for payment, transit ticketing and transit information applications. The Transportation Council believes NFC can help transit agencies overcome challenges faced by all transit riders, including selecting the correct route, obtaining real-time schedule information, acquiring fare media, purchasing fare product, paying the best fare, and viewing the status of fare products, all by way of an NFC-enabled handset.

Transportation Council members involved in the development of this white paper included: Accenture; ACS, a Xerox company; American Express; Ashok Joshi; Collis; Connexem Consulting; Cubic Transportation Systems; Dallas Area Rapid Transit (DART); Giesecke & Devrient; HP Enterprise Services; Identive Group; Infineon Technologies; INSIDE Secure; JPMorgan Chase; LTK Engineering Services; MasterCard Worldwide; MTA NYC Transit; NJ TRANSIT; NXP Semiconductors; OTI America; Quadagno & Associates; Scheidt & Bachmann; Southeastern Pennsylvania Transportation Authority (SEPTA); U.S. Department of Transportation (DOT)/Volpe Center; VeriFone; Visa Inc.; Washington Metropolitan Area Transit Authority (WMATA).

About the Smart Card Alliance Transportation Council

The Transportation Council is one of several Smart Card Alliance Technology and Industry Councils, focused groups within the overall structure of the Alliance. These councils have been created to foster increased industry collaboration within a specified industry or market segment and produce tangible results, speeding smart card adoption and industry growth.

The Transportation Council is focused on promoting the adoption of interoperable contactless smart card payment systems for transit and other transportation services. The Council is engaged in projects that support applications of smart card use. The overall goal of the Transportation Council is to help accelerate the deployment of standards-based smart card payment programs within the transportation industry.

The Transportation Council includes participants from across the smart card and transportation industry and is managed by a steering committee that includes a broad spectrum of industry leaders.

Transportation Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects. Additional information about the Transportation Council can be found at /activities-councils-transportation.