The planned full-scale roll out to let commuters use everyday tap-and-go payment cards and mobile wallets across Sydney's entire public transit network is hiding a dirty little secret.
Transit officers still can’t check if people have really used them to tap on or not - and authorities are scrambling to find a way to probe card accounts to thwart fare dodgers.
It's a major hiccup for an upgrade that would massively increase convenience for commuters by removing the need for an Opal card, with authorities now in urgent talks with card issuers and payment schemes to find a way to check NFC based fares.
The snag, which threatens to open up a fare fraud vector worth millions a year, comes despite years of planning and trials to integrate non-Opal NFC payments into Sydney’s public transport network.
Sydney's light rail and ferries are already trialing tap-and-go fares at ticket gates, a curtain raiser to the planned wider deployment in the same way that Transport for London (TfL) has integrated everyday cards at ticket gates.
"The trial of contactless payments will continue to run through 2018 and we will continue to gather data to inform decisions around any further expansion of contactless payments on other services and modes," a spokesperson for TfNSW told iTnews.
"We are working with an expectation of expansion to heavy rail by the end of the year before assessing implementation on buses into the future."
Travel and tourism lobby groups have their hopes set on the activation of a system for Sydney similar to London's because it would massively increase convenience for visitors to the city who would otherwise need to queue and buy an Opal card.
It is understood a major market is domestic travellers who are about two-thirds of total visitor volume and spend.
At the moment Opal cards can be scanned by NSW transit officers’ Samsung smartphones to verify if travellers have tapped-on.
But for now, at least, there’s no way to check if a passenger has used a credit card or mobile wallet - because the proprietary nature of Opal means there is no link back to commuters' payment accounts.
It is understood TfNSW is now in the process of trying to find a way to verify fares with payments providers, access that opens a raft of privacy and security issues.
For the time being, TfNSW is simply eyeballing customers to make sure they tap on or off.
A TfNSW spokesperson told iTnews customers who pay by credit card are “subject to random compliance checks like all regular Opal customers,” but wouldn’t say how those checks work.
“With the current contactless payments trial,” she said, “a customer’s personal information is properly safeguarded and processed in accordance with the Payment Card Industry Data Security Standards (PCI-DSS)”.
There's also a technical issue; the very nature of tap-and-go transactions that makes fare validation tough.
Whether commuters pay directly with a physical card or one linked to a mobile wallet, security standards coupled with the time it takes a bank to settle the transaction mean transit officers still can’t scan a credit card the way they do an Opal card.
Short of forcing passengers to produce their phones, going through their banking apps and looking for deductions - which might not be processed fast enough to appear - or standing at the gates and watching the readers’ screens and listening for the accompanying dings, there’s still no way for transit officers to check if someone has paid by credit card.
The contactless card trial by TfNSW was first announced in April 2016 on the back of similar moves in London, which has also include Apple Pay in its fare tap options.
An ongoing stand-off between Apple and three of the Big Four banks that have refused to take up Apple's payments service has hobbled similar here.
Also unclear is whether new Eftpos contactless go capabilities will be included in the expansion of the scheme.
The extension of so-called proprietary debit (debit accounts that run on bank payment rails rather than Visa's or Mastercard's) to the ticket barrier looms as a major social equity issue because of the vast numbers bank debit cards issued.
Aside from convenience, transit authorities are keen on the facility because it means they could potentially move off issuing tickets altogether as commuters move to payment apps.
At the moment US based firm Cubic provides Sydney's Opal ticketing and also has a similar deal in London for the Oyster card, on which Sydney's system is essentially based.
However unlike London, where the bulk of Underground and rail access points are gated, most Sydney stations are open other than heavy density stations and interchanges.
A shift to everyday payment instruments on transit isn't great for Cubic, because it literally clips the ticket on processing fares.
Sources familiar with the Opal’s payment systems told iTnews that TfNSW, banks and the payments industry are well aware of the issue, but that banks were already flat out working on Open Banking and the New Payments Platform.
TfNSW told iTnews it’s still looking at expanding the trial to heavy rail by the end of the year, and eventually to buses, even though a large number of stations and most bus stops lack facilities to buy or recharge an Opal card, one of the justifications for the trial.