Google Pay and Apple Pay in Open Loop Transit Fare Collection

Let’s see how Google Pay (now – Google Wallet) and Apple Pay fit the open-loop transit fare payments.

There are some differences between Apple Pay and Google Wallet, but they are not relevant for public transit fare collection.

  • A smartphone or other Android/Apple device with Google Wallet or Apple Pay can be tapped in a brick-and-mortar store with a point of sale (POS) or transit validator with contactless (NFC) capabilities instead of a real card.
  • When Google Wallet or Apple Pay is used for payments via some App on the smart device, the virtual card originating the transaction must be setup in the wallet, but the device does not need to be NFC-capable.

Google Wallet and Apple Pay are not payment schemes, such as Visa, Mastercard, or Amex. The transactions are still to be processed via the relevant payment schemes, in the same way real NFC cards are. So, Google Wallet and Apple Pay do not make payment transactions faster.

The good news is that Google Wallet and Apple Pay provide so called Strong Customer Authentication (SCA) for e-commerce and brick-and-mortar transactions, preventing some types of fraud. SCA means that the cardholder (or device holder in this case) is reliably authenticated. This diminishes transaction risks associated with stolen cards.

There are more factors to be considered

Tap Latency. When the smart device (phone, watch, etc.) is used. You usually get smaller tap latency than the one initiated by a real contactless card. This, of course, may not always be true. It depends on the smart device and software quality.

The experiments I did using NFC EMV Explorer Android app, reading and measuring card and smart device latencies, show that the smart devise needs to be rather modern (as well as cards in the plastic form) to achieve faster taps. You can try yourself by installing this app on your Android devise and tapping that device with your cards and phones and the ones of your friends and family.

The manner of tapping the smart device (how fare is it antenna from the validator NFC senser) also affects the latency. My experiments with different phone and other device models demonstrate that tapping plastic card is easier than tapping phones. At the grocery store, this is less important. The longer it is, the more smiles you get from the store clerk. Boarding streetcar is a different story. Other patrons behind you are not smiling.

DPAN is not a card number. Google Pay and Apple Pay implement tokenization when the merchant receives an encrypted token called DPAN instead of the card number. The transit agency cannot associate the DPAN with a real card number used at a tap-on turnstile. See details about PAN and DPAN issues here. Thus, preliminary registration of a card with transit agency will not work with Apple Pay and Google Pay.