Payment Technologies and Processes

Electronic Payment Systems (EPS) bring together telecommunications, data processing, data storage and microcomputer technologies and apply them to the process of revenue collection, record keeping and funds transfer. In general, the process can be divided into:

• ‘front end’ activities in which the user participates
• ‘back office’ activities which usually include:
  • management of the method of Payment (MOP)
  • account maintenance
  • transaction processing
  • revenue management and settlement
  • customer relationship management (CRM)
  • enforcement operations
  • reporting and auditing

From the point at which a payment is initiated details of the event need to be transferred securely to the organisation that manages the back office to credit the payment to the organisation that provided the service. The process chain depends on agreement on:

• a suitable method of payment
• the supporting technologies
• other enablers such as data security and human factors
• technical standards to ensure interoperability
• enforcement procedures

Payment starts with an action by the user to show that he or she is eligible to access a service or liable to pay the toll or charge. The payment is done by the user paying directly or alternatively by providing an identifier that is linked to a user’s account which is charged. The MOP is the combination of transactions necessary to perform the payment and identify the account to be charged (See Methods of Payment) For example:

• bus operators accept various mobile and personal technologies such as smart cards and proximity cards as a valid Means of Payment (MOP). Increasingly, mobile phones are being used as a mobile payment platform for the public transport
• to pay a toll at a toll plaza or at mainline speeds, a vehicle-based MOP or identifier may be used such as a Radio Frequency (RF) or Dedicated Short Range Communication (DSRC) tags

Vehicle detection, automatic location, communications, and security mechanisms all contribute to determining when, how, and how much to pay for the use of a transport service or road infrastructure. For example, many examples, such as toll collection, off-street parking and access for HGVs at a port, depend on the presence of the vehicle and so vehicle detection and measurement are critical. Tolls and charges may vary according to the vehicle’s location, so that the ability for a user (or a road operator) to know the road on which the vehicle is being used is important.

All Electronic Payment Systems (EPS) require some form of data capture and temporary storage as part of the information chain – from the event that triggers a payment to completion of the payment transaction. The event can be:

• the vehicle’s presence in a toll lane signalled by RFID tag or DSRC
• a user who presents a smart card, for example at a subway turnstile
• a roadside enforcement system that captures an image of a vehicle and its number plate in a location where a charge operates

Each transaction needs reliable data capture and secure data transfer (See Supporting Technologies).

Other factors that need to be considered in the design and implementation of an EPS include:

• data security (See Data and Information and Risk Mitigation)
• human factors (how people interact with a service) (See Human Factors)
• technical standards (See Standardisation and Interoperability)
• device approval and certification processes (See Equipment Certification)
• procurement processes that stimulate competition (See Competition & Procurement)

BACK OFFICE ARRANGEMENTS

The financial viability of every electronic payment scheme depends on being able to collect revenues owed and to deter non-compliance. This involves checking that all transport network users comply with advertised regulations. The back office will process the payments, match payment events with accounts, provide enquiry services, interface with the banks – and take on many or all of the functions required to perform enforcement operations.

Traditionally, the back office for a single public transport operator would support cash payments and a branded proximity card used for electronic ticketing. An integrated public transport payment scheme might additionally need to deal with bike hire, taxis, national rail lines and the transport providers in other towns and cities.

The back office for integrated transport needs to grow to match the complexity and range of services offered. New organisational arrangements may be required to enable multiple shared Methods of Payment (MOPs) managed by a variety of service providers – for example mobile network operators, banks and other institutions that already have many of the back office functions in place. There are organisational models for Electronic Toll Collection (ETC) that encourage this, such as the European Electronic Toll Service (See Enforcement and Back Office Arrangements).

INTEROPERABILITY

The take-up of electronic payment for different transport services may reach a point where there is a need to harmonise different Methods of Payment (MOPs) so they can be offered across alternative transport modes, between different transport operators and allow travellers to access complementary services. The challenge is to establish interoperability, which may require agreement to harmonise different payment systems at the technical, contractual / legal and business levels (See Standardisation & Interoperability Issues).  Videos: How Electronic Tolling Works on NH-8 & Interoperable Electronic Toll Collection