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If the backside of your Chase Bank credit/debit card has the “blink” text and logo, you’ll be ready for Open Fare.

Soon you’ll be able to pay for a trip on Chicago Transit Authority (CTA) buses and trains with your credit/debit card (provided it has an embedded wireless chip) and NFC-enabled cellphones. Currently all four credit card processors (Visa, MasterCard, American Express, and Discover) offer cards with contactless chips – they use RFID technology. The Samsung Nexus S is the only widely available cellphone with an NFC chip. This is all part of an upcoming system called Open Fare. It’s not the same as the regional fare payment system that Pace, Metra, and the CTA are legislated to provide by 2015 (where one fare payment method works on any transit vehicle, often called “universal fare”*).

The board approved on Tuesday a 12-year contract with Cubic Transportation Systems, the CTA’s current fare media provider, for $454 million. The CTA this evening added a new page on their website explaining some of the features of the program, including a “Q&A” section.

Some of the benefits of the system:

The CTA expects to save $5 million annually because it would no longer have to handle the “challenges involved with collecting fares, handling credit and debit card processing fees [as with Chicago Card/Plus], incurring operating expenses or dealing with security breaches and equipment failures” (Chicago Tribune). However, the CTA’s website states that cash would still be accepted on buses so some money handling is still in their future.

The number of locations that sell fares will increase. It’s not clear if the prepaid/reloadable (but still contactless) fare media will be available at all rail stations, as it is now.

Riding the CTA will become easier to ride for people who don’t normally ride the CTA, or don’t currently know how to pay the fare. With an RFID-enabled credit/debit card already in their wallet, they’re ready to board.

I predict the adoption of contactless payment technologies amongst the CTA’s customer base will be faster with Open Fare than with Chicago Card/Plus (which has been around since 2000). This will mean faster boarding on buses.

U-Pass will finally become contactless. U-Pass is a magnetic fare card used by students attending universities that have multiyear agreements with the CTA to provide it for all students meeting minimum eligibility criteria. I’ve written before that U-Pass should become contactless. Again, faster bus boarding will result.

There’s no mention on how multi-day passes will be handled in the new system. I advocate for a smart pass handling system like in London where users of the Oyster contactless payment card (works very similar to Chicago Card/Plus) are always guaranteed the lowest fare for all of their trips in one day (they call it daily price capping). For example, say a customer pays for each trip singly with their Oyster card, making three trips in one day, without transfers. The fare processing system will see that it would have been cheaper for the customer to buy a one-day pass; it retroactively applies a one-day pass to the three trips and the customer’s Oyster account is deducted by the amount of the one-day pass, which is less than three trips.

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I don’t know how well Open Fare will reduce long lines for buses at LaSalle and Madison, but it should help.

Some history

New York City’s Metropolitan Transportation Authority (think Metra+Pace+CTA) began testing an open fare system in 2006 with Citibank and MasterCard. The pilot was closed in 2010, but not before I got to see it work with my friend’s Chase Bank card.

The CTA announced its intentions in August 2009 at a board meeting in a presentation titled Next Generation Fare Collection. According to the presentation, transit agencies in San Francisco, Utah, Philadelphia, Washington, D.C., and Los Angeles, were working on pilots or procurements for open fare systems. The CTA released a Request For Proposals (RFP) in the same month, solicitation 9OP03968.

The Regional Transportation Authority (RTA) has been discussing open fare since at least 2009, and Chicago Metropolis 2020 (now Metropolis Strategies) in 2007 and Metropolitan Planning Council (MPC) in 2008.

Assuming the RFP objectives are still true for the contract with Cubic the CTA board just approved, it offers some insight into system operation:

In a list of required elements, the CTA included “[Fare collection terminal technology must] be installed at the rear doors of all 2,222 buses to accommodate for simultaneous fare collection and entrance from both front and back doors.”

The CTA wants usage data in real-time. Can you think of how the CTA accountants or service planners might use this information?

As of April 2009, 15.8% of all rides were paid with cash. That means the CTA was dealing with half a million dollars in cash on a daily basis. The agency implies many times that it wants to get out of banking and cash handling.

*The RTA planning committee had a discussion in a February 2009 meeting about what to call this new fare collection system. The director at the time, Judy Baar Topinka, wanted to move away from saying “universal fare card” to saying “universal fare media” or even something else.

Updated November 16, 2011, to add history of planning for an open fare system and new information from transit agency documents.