Parking, FasTrak, and Wireless Payments

Whereas payments are central to business Apps for smart phones, I thought I’d describe some wireless methods that are currently under consideration. I was inspired to do so by the following news from the left coast.

Parkers at San Francisco's International Airport can now use their FasTrak transponder to pay for their parking. They have been testing it on a few lots at the airport and get about 200 transactions a day. This month, the system will expand to all the parking area at SFO. If it becomes popular the concept will be extended to Oakland and San Jose.

California’s FasTrak system, typically used for highway and bridge tools, is called the E-ZPass here in the East, and goes by other names in other regions. Think of it as an RFID chip used for Transportation payments.

“This is the beginning of the end of cash usage at parking lots, opines John Van Horn, founder, editor and publisher of Parking Today Magazine and blogger at PT’s Parking Blog. “ Soon (five years) cars will have transponders and they will be linked to your credit card, and queuing for entry tickets or exit payments will be a thing of the past. It may be even reasonable some day to not have gates at all, like on many toll roads.”

At least three payment methods are currently being considered for smart phone implementation.

FasTrak (E-Zpass). These and similar systems rely on a transponder in the car and a reader located at the tollbooth, both typically provided by Mark IV Transportation Technologies. The transponder consists of an RFID chip packaged with a battery. When the transponder comes within range of the reader, the ID is transmitted and verified at the reader. Processing is offline. When the motorist purchases the transponder, funds are deducted from her credit card ($30 here in NH) and transferred to the FasTrak operator. Tolls are deducted from this amount until a minimum threshold is reached, when another $30 will be charged to the card by the operator.

Tap and Go. An RFID chip with an antenna is embedded in a credit card. When the card comes in close proximity to the reader, an electrical current is created and the ID (credit card number) is transferred. Further processing, including authorization and payment, takes place online as it does with any credit card. The official name for this is Near Field Communication, as described in my earlier post.

Stored Value. Funds are actually stored on the card, in memory, and the amount is reduced as the card is used. One good example, from the pre-RFID days, is the Parcxmart Card used to pay for parking and miscellaneous small dollar purchases in New Haven and other Cities. Cards are sold and funds are added by participating merchants, paid by either cash or credit.

Smart phones have batteries, have processing power, and have far better transmission capability than any of the methods described above. Smart phones are user programmable, so major portions of the application could be shifted to the phone itself. Moreover, smart phones could allow direct two-way communication between the parking operator and the consumer. So why don’t we have better payment methods for smart phones? Watch this space and ask me later.