Let’s see how Google Wallet and Android Pay fit the open loop transit fare payments.
Google Wallet is a service and Android or Apple smartphone applications that allow sending money from one bank account to another in fast and secure manner. If a bank account is associated with a U.S. MasterCard debit card, this card (therefore the account) can be setup within the Google Wallet application.
You can also keep some money in your Google Wallet and use them in participating stores (or even ATMs) by tapping the smartphone at the point-of-sale contactless (NFC) reader.
We may expect extension of Google Wallet realm beyond MasterCard Debit and beyond the U.S. (no promises have been currently made).
Android Pay is also a service and smartphone application that may keep several credit or debit card payment applications, including Google Wallet application. Android Pay can also keep various coupons and loyalty cards. These electronic means of payments can be used at the participating merchants equipped with contactless card readers.
Android Pay can be used to pay for services within an Android application, for example when you want to buy more audio books or music.
How these services can be used in the open loop? They are more convenient and secure for the patrons than real wallets with plastic cards. But from the classic open loop system standpoint tapping a phone with Google Wallet or Android Pay at the validator hardly can make this better than tapping a plastic contactless card because of two reasons:
- First, both services, in order to make a secure transaction, require one more server participating in the transaction. You should expect even slower payment transaction than the one initiated by a real contactless card.
- Second, for the matter of security, Google transaction process implements so-called “tokenization” when the merchant receives an encrypted token instead of the card number. With this, the transit agency cannot associate a card used at tap-on turnstile with the one used at the tap-off turnstile (within a reasonable time, of course).
OpenFare is another story. Android Pay has one feature that can be useful with OpenFare. It is the ability to create and load over-the-air loyalty cards, coupons or pass cards. When a patron registers his or her credit or debit card with OpenFare, an OpenFare pass card can be loaded into his/her Android Pay application on the phone, over-the-air. OpenFare will immediately propagate this pass number to all validators. After that, instead of the patron’s credit or debit card, this pass card will be used when the phone is tapped at a validator. This provides better security. Classic open loop systems cannot use this feature because they do not register cards.
With this, please bear in mind that contactless passes are cloneable. Only OpenFare can make them quasi-non-cloneable by means of changing them very often and proactively propagating the fresh ones to the validators.