The challenge
Implementing a contactless EMV payment system is challenging on many levels. Firstly, there's the hurdle of procurement. Traditionally a lengthy, costly and complex process, involving consultation, specification and bidding, it has been seen as something only large transit agencies had the resources to contemplate.
Then, there's the technical challenge of integrations, installations and testing. Fare validators must interact with fare calculation software and payment service providers to guarantee quick validation, accurate fare calculation, and seamless transactions for payment-enabled devices, prepaid cards, and contactless debit or credit cards.
But the challenge for MST wasn't purely logistical or technical, it was bound up in the idea that new technology should not leave any rider behind
The Monterey-Salinas transit district serves a diverse ridership, including a large Spanish-speaking community, students, seniors, agricultural workers, low-income families, tourists, and commuters. It was critical to the agency that the system would be simple, easy and cost-effective for every member of its communities to use.
It engaged with Visa, the California Integrated Travel Project, and technology and fintech partners, to provide ways to include riders without a contactless bank card or smartphone; riders without traditional bank accounts; and riders who depend on discounts and concessions to make essential transportation affordable.
Project goals
Modernization of fare collection: MST's fare boxes were aging, costly to maintain, and incompatible with modern payment technologies. The agency sought a lower-cost, modular, scalable platform that would enable the tap-to-pay experience, and be open to further evolution as new payment technologies emerge.
Cost-cutting and efficiency: MST sought to lower the costs tied to cash fare collection by reducing the volume of cash transactions. These include expenses for farebox maintenance, cash counting, security, and reconciliation; revenue loss from theft and fraud; and the impact on efficiency caused by long dwell times. It aimed to free-up more resources for improving service delivery and driving innovation.
Fast, frictionless payments: MST wanted to make fare payment as easy as possible. The Tap2Ride experience removes hassle. As riders don't need to buy or load a separate transit card or handle cash, they can get on board quicker. MST wanted to see reduced dwell times, faster boarding, and smoother running services.
Equity and access for all riders: MST's service area includes many low income and unbanked riders, as well as seniors, veterans and persons with disabilities. It was a priority to include all these groups, ensuring that the Tap2Ride system was easy and affordable, with fare caps and concessions applied automatically.
Support for tourists and occasional riders: Monterey County has a strong tourism economy, with the Monterey Bay Aquarium, Cannery Row, and Pebble Beach among its attractions. Visitors can now tap their own bank cards or phones to ride MST buses, rather than needing a transit card or cash. And with fare capping, they automatically get the best available fare without having to understand ticket prices.
The solution
In May 2021, MST began a contactless EMV payment demonstration, becoming the first California operator to introduce a simple tap-to-pay option letting riders pay fares with the same card or mobile wallet used for everyday purchases.
The demo approach gave MST the ability to monitor system performance, assessing hardware, software, connectivity and data provision. They discovered what worked or didn't, and tested approaches to staff training and rider communication.
Following the demo, MST worked closely with the California State Transportation Agency (CalSTA), the California Department of Transportation (Caltrans) and the California Integrated Travel Project (Cal-ITP calitp.org). It selected partners from Cal-ITP’s Mobility Marketplace to transition to a full roll-out of Tap2Ride.
The Marketplace makes procurement easier and more affordable. The State of California has awarded master service agreements to vendors (including Kuba) whose products and services can be purchased. Agencies like MST can use pre-arranged contracts and enter into a fast onboarding process.
MST selected Kuba (for fare validators), Littlepay (for fare calculation software) and Elavon (for payment processing). Each vendor provided services within a modular, 'plug and play' system. This blueprint can be reused by any transit agency in the U.S. – with fast onboarding – instead of reinventing the wheel time and again.
The Tap2Ride system in Monterey has now evolved to meet the agency’s challenge of serving every single rider on its network:
PAYG fare capping: MST introduced fare capping as a Pay-as-you-Go alternative to period passes, providing value to riders who travel frequently but don’t have the ability to pay upfront. Once passengers hit a daily, weekly or monthly fare cap, further journeys are free within the fare cap window. This as-it-happens reward system makes life easier for those on a tight budget for essential costs.
Digitally verified concessions: The agency was the first in the world to offer contactless-enabled automatic benefits for seniors, persons with disabilities and veterans. Using a system called Cal-ITP Benefits, any eligible person can login to a government portal to verify their identity and link a payment card to their concession. This is applied automatically every time they tap-to-travel using the linked card.
Banking alternatives: MST deployed Cash App, which provides a virtual or physical debit card with EMV capability to people unwilling or unable to open and fund a traditional bank account. Users can register with just a California state ID and a small amount of funds. They can load the card with cash at retail outlets and use it like any other cEMV debit card to access MST's buses.
The results
MST has worked hard alongside partners, including Kuba, to provide a Tap2Ride service that meets riders’ complex needs, and is reliable, day after day.
Carl Sedoryk, CEO and General Manager, Monterey-Salinas Transit, says:
“Since using Kuba’s cEMV enabled validators, device failure rate is about 1 in every 100,000 transactions. With our fare boxes for cash and closed-loop transactions, we experience device failure about every 9,000 transactions.”
The transit agency continues to expand Tap2Ride access. Fare payment options include contactless Visa or Mastercard debit and credit cards, and mobile wallets, including Apple Pay, Google Pay, Samsung Pay or Fitbit Pay. Discover cards will be accepted soon, with American Express a possible addition in the future.
MST is empowering riders to use the system and make transportation budgets work harder, thanks to fare caps and automated concessions. It continues to explore how to support those on the lowest incomes. One ambition is to make the payment system compatible with cards issued to Medi-Cal and CalFresh participants.
Michael Kohlman, Chief Information Officer, MST, says:
“Many MST passengers have part-time jobs and limited funds. Paying for fares a few dollars a time, and receiving fare discounts without purchasing a discounted pass up front, makes their financial lives easier while providing stable transit access.”
Rider experience has improved by making payments easy, convenient and affordable, while accelerating boarding times. Some impressive numbers include:
- ~80% lower cost of fare collection system ownership
- 48.8% uplift in ridership in first two years
- >382k trips have started with an EMV tap
- 37% of riders save thanks to fare caps
- $7.14 average monthly fare caps saving
Learn more
For more case studies and insight into the tap and app technologies transforming fare payments, read our white paper: A roadmap for reinventing fare collection.
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