Part 2 - QR, EMV and Fare Collection
In my previous post, I outlined why EMV is eminently suited for account-based ticketing. QR and eWallet payments, on the other hand, do not seem to fare so well in the fare collection world.
In this post, I am looking at the reason why that might be so.
The strength as well as the weakness of QR payments is the nature of its frontend transaction flow. The low-tech QR code in combination with the ubiquitous camera in mobile phones enabled the fast growth of e-wallet payments. It is inexpensive and easy to implement.
However, there are some important differences between QR payment (or e-Wallet payment) and EMV-based card payment transactions, which make it harder, and in some cases easier, to use e-wallet payments for public transport ticketing:
-
There is no two-way communication between payer and payee devices at the point of sale. The flow of information is one-way only. One side shows the QR code and the other side scans it.
As a consequence, sender and receiver cannot verify the authenticity of each other without connecting to the backend system[1].
As mass transport ticketing requires transaction times of a few milliseconds, waiting for online authentication, especially in interoperable systems with multiple QR payment providers is not an option.
-
In most QR-code-based e-wallet payments, the merchant presents the QR code to the customer who will scan it.
The automated gate or validator, both unattended, has no idea whether there even is a customer who will scan the QR code and send a payment. Every generated dynamic QR code therefore represents a potential (you could also call it a pending) transaction. Only the merchant backend (or the receiving QR provider’s backend) will be able to tell whether the pending transaction was completed.
Since the validator or gate does not know when a passenger scans the QR code, it would have to wait for the backend system to confirm a scan. This will likely take too long to be useful for high traffic mass transport fare collection.
Therefore, the only option might be a customer presented QR code that is scanned by the validator or gate. Since there is no offline authentication, it will be challenging to manage the risk of fraudulent QR codes.
-
In most e-wallet systems, the payment amount will be available for immediate withdrawal by the receiving side of the transaction. In some transport systems such as Jeepneys in the Philippines, this is important as drivers rely on their daily fare intake to buy fuel, food and so forth.
-
The security of QR payments relies heavily on customers using their e-wallet application to review transaction data and to approve transactions. The login mechanism of the e-wallet app is the equivalent of the traditional cardholder verification by PIN (or the newer device CVM).
Given that the transaction amount is only known after the customer has left the station, the customer would have to authorize the transaction regardless of the amount at the time they generate the QR code.
Again, the lack of authentication would open up the system to fraud, because it is just too easy to create a QR code for an account belonging to another passenger.
-
QR e-wallet transactions always carry the transaction amount. There is no pre-approved or authentication-only transaction. The entry ticketing transactions would therefore need some creative use of the data and backend protocols.
In summary, QR e-wallet payment systems lack a number of features that are needed for automated fare collection, most importantly offline authentication and offline risk management. High volume mass transport and account-based ticketing are especially problematic.
However, if we focus on the true nature of e-wallet payments, and if we remember that ticketing and payment are two different concepts, a number of solutions emerge that could enable e-wallets and QR codes to compete in the fare collection market. But this will be the topic of my next post.
Image Reference
W. Commons, “File:Grönt sl kort.jpg — Wikimedia Commons, the free media repository.” 2022, [Online]. Available: https://commons.wikimedia.org/w/index.php?title=File:Gr%C3%B6nt_sl_kort.jpg&oldid=664838799.
