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April 2008 • Volume 13 Number 4
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Feature of the Month Last month's Smart Card Talk article described an approach that leveraged co-branded card marketing programs and the multi-application capabilities provided by smart card technology to create a payment card that can be used for both transit and financial payment. This month's article profiles the Barclaycard OnePulse card, which used this model to provide contactless, EMV and transit payment to Barclay's customers in London. The Transport for London Oyster Card The Transport for London (TfL) Oyster® card was launched in August 2002 and is used for transit payment on all London Underground and London Bus operations. The system was the first large-scale deployment of a fare terminal infrastructure compliant with ISO/IEC 14443, Type A and Type B. The system incorporates over 18,000 devices, including fare gates, ticket vending machines, ticket office machines, bus fare registers, bus validators, handheld terminals, and merchant POS equipment. Since system launch, a variety of user convenience options have been introduced to complement the original stored value utility provided by Oyster. These include:
The project is a well-documented success, winning a variety of awards, and has a current circulation in excess of 15 million Oyster cards. Today, more than 75% of all daily bus and subway rides use Oyster for payment. Expanding beyond Transit Payment The original contract between TfL and Transys Ltd. was structured as a form of public-private partnership, with TfL retaining specific responsibilities for marketing and customer service. A creative mechanism was established to encourage commercial exploitation of the card and the system. This mechanism calls for the net revenues generated by new commercial products to be split equally between TranSys and TfL. In accordance with these provisions, TranSys and TfL negotiated an innovative arrangement with Barclays Bank PLC for the issuance of a multi-application co-branded bankcard. Under the terms of the licensing agreement, Barclays has an exclusive license for a fixed period of time to place the Oyster application and brand on new contactless financial payment cards. This provides Barclays with a unique selling position, given the large number of Oyster users (who are already familiar with contactless payment technology) and the very positive brand association of Oyster. In return, TranSys and TfL receive revenues from Barclays and enjoy reduced card issuance costs. The first product resulting from this agreement is the Barclaycard OnePulse card [1], a three-in-one card that combines Oyster with contactless Visa payWave and traditional contact EMV credit and debit payment. Barclaycard OnePulse Operation The Barclaycard OnePulse card carries the transit and financial applications on the same chip, with no interaction between the two applications. The financial application is a standard, fully certified EMV application. Under the terms of the agreement, TranSys provides Barclays with the tools and data necessary to load the transit application onto the chip when the card is personalized. The transit application itself is not personalized but is marked as “registered,” and the relevant personal details are passed to TfL for its records, thereby providing Barclaycard OnePulse users with all the benefits of Oyster registration. The personal data is passed to TfL after card personalization, using automated processes. Customers are instructed to contact Barclaycard for payment inquiries and TfL for transit inquiries. For inquiries specifically related to the card itself (e.g., lost or stolen cards), customers contact Barclaycard. Barclaycard’s customer service staff direct Oyster-related queries to TfL and vice versa. The bank call-center representatives have no access to transit activity other than to assist a customer in setting up automatic top-up. The transit application itself can be funded by all means currently available for traditional Oyster cards, including cash, debit, and credit. Card replacement is handled by Barclaycard. Replacement of outstanding transit balances or products is initiated by Barclaycard and passed to TfL, who uses the ad-hoc load facility to load balances or products onto a replacement card. Implementation Considerations Card Design. The Oyster transit application, like many other transit implementations worldwide, is a closed-circuit design. The infrastructure is designed to support a range of ISO/IEC 14443-based technologies but to date has used only Type A protocols, which are derived from those used by the NXP MIFARE wired-logic platform. The Oyster application resides in 1Kbyte of memory on a standard MIFARE implementation. The Visa payment applications are an EMV-compliant contact credit application based on the ISO/IEC 7816 (contact) standard and a Visa payWave contactless application based on the ISO/IEC 14443-4 (contactless) standard. The Barclaycard OnePulse card brings these three applications together on an NXP SmartMX card. This solution is illustrated in the figure below.. The transit and EMV applications co-reside without interference. The firewalls supported by the SmartMX card and the card operating system ensure that the financial application cannot access or corrupt the transit application. The MIFARE-based transit application uses the passive memory-based command set to implement the Oyster functionality. This solution was chosen for two reasons. First, it represented minimal technical risk. The NXP SmartMX was a proven technical solution for combining a microprocessor-based application with a MIFARE-based application on a single chip using both contact and contactless interfaces. Adopting this approach required no changes to the readers for the Oyster transit system. From the reader’s perspective, Barclaycard OnePulse cards are indistinguishable from standard Oyster cards. Barclaycard OnePulse cards could therefore be used immediately on every mode of transport and with all retail, validation, and handheld equipment on the transit system. The only change was to create a new configuration setting for these cards so that the transactions they generate on the transit system are distinguishable from transactions generated by other Oyster cards. This change allows card use to be reported easily and relevant management information to be generated (e.g., where the cards are being used, how frequently they are being used, and what travel products are being loaded onto them). The second reason for choosing this solution was to minimize time to market. In order for Barclaycard to obtain the full benefits of the relationship with Oyster, it was necessary to get the cards to market in time for the Visa/MasterCard launch of contactless payments in the United Kingdom in September 2007. This meant that cards needed to be in customers’ hands less than 9 months after the commercial agreements were concluded. A technical solution that required changes to the transit readers would not have been possible, as TfL was already committed to a substantial reader software change during the same time period that could not be interrupted. By adopting this technical approach, TfL could proceed with the reader software change, knowing that the Barclaycard OnePulse cards would be fully compatible with both new and old reader software.
Security, Certification and Performance. Oyster cards conform to a technical specification that is issued and maintained by TranSys. The technical specification includes both functional attributes (e.g., electrical characteristics and chip type) and non-functional attributes (e.g., surface coefficient of friction). The same specification is given to all suppliers, one of whom also supplies the Barclaycard OnePulse cards. The current certification processes for Oyster cards were directly transferable to the Barclaycard OnePulse cards. These processes verify both the electrical and mechanical integrity of the cards to ensure that they will withstand the normal day-to-day use to which a transit card is subjected. Additional security assurance was undertaken to verify that any potential risks associated with using a different card platform were appropriately managed or mitigated. The TranSys certification process verifies that required card performance is achieved both in terms of transaction speed and operating range. A calibrated test rig demonstrates this against a standard Prestige reader, thereby ensuring that performance is adequate for real-world operational situations. Card suppliers to TranSys are furnished with appropriate facilities to test sample card configurations before release to TranSys for final approval. Personalization. It was understood early in the project that personalization of the Barclaycard OnePulse card had to be a one-step process for the card to be a commercially viable product. The Oyster application had to be loaded onto the SmartMX chip during the same process that personalized the financial application. The solution provided by TranSys accomplishes the following:
The Barclaycard card production system is integrated with the Oyster back office system to allow regular, secure exchange of card enabling information between the two systems. In addition, the need for additional production process approvals was avoided by using the current Barclaycard card producers. Application Ownership. The OnePulse card is issued and owned by Barclaycard, who has the right to cancel a customer’s card. The actual Oyster account resides with TfL, allowing that account to be managed independently of the credit card component. Consequently, it is possible to recover the balance from an Oyster account if necessary. The Oyster account is tied to the physical card number, but it is possible to transfer products between card accounts (for example, if a customer wishes to transfer products to a new OnePulse card, or when the card expires). TranSys supplies the means by which the Oyster application is encoded onto the card and therefore retains control over the formatting and configuration of the application data. Consequently, ongoing amendments to the Oyster application can be accommodated seamlessly through periodic configuration updates to the encoding system. In this way, the production-proving process is restricted to certifying the card and the encoding system integration. Ongoing proving will be restricted to certifying new card construction. The OnePulse card offers a number of cost advantages over the basic Oyster card. Integration between the Barclaycard and Oyster back office systems enables a high degree of automation of standard processes, including the processes that govern card loss or theft and card replacement. From a transit agency’s perspective, it is reasonable to assume that customers place greater value on their combined credit and transit cards and therefore that churn rates will be lower than those experienced to date for transit-only cards. Because the two applications (credit and transit) remain functionally separate, they can be managed independently. Independent management has significant benefits for the issuers, as it limits the requirement for interaction to activities such as card issuance, withdrawal, and replacement. Card reissuance is managed by Barclaycard and follows the normal bank reissuance cycle, with outstanding Oyster products and balances transferred using a semi-automated process. The Oyster element of the card does not automatically expire until the customer either asks to have the products transferred or decides to exhaust the balance or complete any period contracts held. Integration between help desks permits both parties to provide the level of customer service to which both Oyster and Barclaycard customers have become accustomed. Cardholder information is shared between the parties as required for registered Oyster cards. The Barclaycard OnePulse cards are differentiated by specific Oyster card type (staff, retail, student). The type is encoded in the card and within all transaction data. The Oyster system uses this card type to manage customer-related interactions, including what products can be purchased, what operations can be performed, and what information is provided to customers. TfL uses this information to segregate those Barclaycard users on management reports. All of these factors are important, not only during the initial period of peak demand when the combined card is launched, but also for routine processing of lost, stolen, and surrendered cards. More value-added services are also enabled, such as allowing Barclaycard OnePulse customers to link Oyster auto top-up capability to their Barclaycard account, which means that they can receive a new card in the mail that is already enabled for auto top-up, with only a simple phone call needed to activate the capability. References [1] Additional information on the Barclaycard OnePulse card can be found at http://www.barclaycard-onepulse.co.uk.
About this Article This article is an extract from the white paper, "Co-Branded Multi-Application Contactless Cards for Transit and Financial Payment," developed by the Transportation Council and published in March 2008. The Barclaycard OnePulse profile was contributed by TranSys and Transport for London, with input from Barclays. The full white paper is available on the Smart Card Alliance web site at http://www.smartcardalliance.org. About the Transportation Council The Smart Card Alliance Transportation Council is focused on promoting the adoption of interoperable contactless smart card payment systems for transit and other transportation services. Formed in association with the American Public Transportation Association (APTA), the Council is engaged in projects that support applications of smart card use. The overall goal of the Transportation Council is to help accelerate the deployment of standards-based smart card payment programs within the transportation industry.
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The Barclaycard OnePulse Card: Transit and Financial Payment in One Card
