2. T-FLEx October 2007 Workshop The Future of Fare Collection Ed Oliphant, CFO Nashville MTA October 29, 2007

3. About Nashville MTA  8.5 million passenger trips annually  Fleet of 137 transit buses, 62 paratransit vans  GFI Odyssey Fareboxes  Operate a pulse system with AM and PM peaks  Utilize Smartcard technology through employees ID and the Easy Ride Transit Benefits Program  Beginning AVL implementation, although not necessary for credit card acceptance

4. Overview  What are the issues associated with accepting open system cards (credit cards) at the customer point of entry on-board buses in an off-line environment?  Impact on Operations  Impact on Maintenance  Impact on Accounting  Cost of Implementation

5. Operational Pro’s & Cons  Very little bus operator training  Faster boarding time  Operating off-line vs on-line real time (AVL)  Boarding times will improve as long as it is in an off-line environment  Transaction speed needs to be 300ms or less  Training for Customer Service & Accounting  End of day probe time

6. Maintenance Issues  Hardware and equipment requirements  Upgrade Farebox Software  Upgrade probing speed  New maintenance procedures  Potential for lost information ?

7. Accounting Considerations  Picking the 3 rd party processor  Farebox software must be able to communicate with 3 rd party processor  Transactions should be sent to 3 rd party processor daily (not necessarily processed daily)  Processor must acknowledge and confirm receipt of transactions  3 rd party processor must provide back-up from transactions processed that can be reconciled to farebox software transactional data

8. Accounting Considerations continued  Level of Risk in Off-line Scenario  How will bad/stolen cards be identified?  Immediate validity checking (expiration, card type)  3 rd party processor must be responsible  What is farebox capacity for bad carding?  Who manages the Hot List for bad cards?  This process should be automated by 3 rd party processor back to farebox software and updated at the farebox during daily probing.  How often should transactions be processed by the processor?  Daily vs some extended period (Aggregation)  Impact on transaction fees vs bad card risk

9. Accounting Considerations continued  Data Security  Payment Card Industry Data Security Standards must be followed (PCI-DSS)  Mandatory compliance program  Security and confidentiality of customer information cannot be compromised  Prevent internal fraud and scams with security  Encryption software is required  Farebox software and 3 rd Party Processor must be PCI-DSS compliant.  Subject to annual audits, quarterly network scan or annual self-assessment questionnaire depending on volume of transactions processed

10. Implementation  Cost to Implement  Cost of any new or upgraded hardware  Cost of software upgrades  3 rd Party transaction costs (Aggregation)  Training Cost  Flow of funds

11. e-Payment Technology Farebox Probing Computer Network Manager Link2Gov Transit Agency Chase Paymentech Transit Agency Bank VPN ACH Bad Cards

12. What Did Nashville Consider?  Accepting credit cards for micro purchase of single ride tickets ($1.25), All Day Passes ($3.75), their discounted equivalents for youth, elderly and disabled and Night Owl Service ($4.00) (no signature required)  Just like cash fares, a rider will inform the driver which fare they want to purchase  The driver will hit the button associated with the fare desired and then the rider will swipe their card

13. Other Considerations  GFI Genfare and Link-To-Gov software must be compatible  The 3 rd party processor must manage Bad Care List electronically  Determining an acceptable number of days the Transit Agency takes the risk of accepting fraudulent cards  Which credit cards to accept  Expanding credit cards to Paratransit

14. Questions Thank You Ed Oliphant, CFO Nashville MTA October 29, 2007 Comments?? or