Presenter - Sujith Nair

1. Smart Card Based Fare
Collection Solution
BMTC EY Case Study

2. BMTC’s Smart Card Initiative
Page 2
BMTC has embarked on journey of converting paper based season tickets /
commuter passes to smart cards
Primary Objectives
Plug revenue leakages due to pass misuse
Increase adoption of monthly/daily passes
Improve commuter experience
Enable common mobility across various modes

3. Conventional approach to Smart card Implementation
Page 3
Engage System Integrator (SI) for IT implementation of
smart card based solution
Project cost - ~INR 100 Cr (Capex + Opex) include
procurement of cards and setting up card reading/
acceptance infrastructure
Life long maintenance and upgrade required
Limited applications of card outside transport

4. BMTC and EY’s innovation in Smart card Implementation
Page 4
Financial Institution (FI)
engaged for implementation
smart card solution
FI funds cost of
infrastructure and
integration
Commuter can use BMTC
Smart Cards for payment
transactions with other
merchant
FI promotes the card usage for
purchases of passes, ticket
and also across merchant
outlets
FI maintains the system
as long as it is s
engaged
FI pays to BMTC – a) One time
royalty fee, b) commission for
non-transit transaction
BMTC pays a nominal
commission for ticketing
transaction

5. Page 5
• The Transit operator hires one or multiple Financial
Institutions (FI) to issue a Pre-paid EMV enabled Travel
card to its customers (transit commuters)
• The EMVbased smart cards can be accepted on transit
operator’s terminals. The Transit Operators fare
acceptance terminals would need EMV enabled card
readers
• The same card can be used on network of other
payment methods like RuPay at any merchant outlet
• Model is convenient for a commuter as Transit Card acts
as an ‘eWallet‘ that can be used for all payment needs
as single media
• Model also aids customer to gain loyalty points for
usage of cards on transit or non transit network.
Commuters
Bank issues
Pre-paid Co-Branded
Travel Card
Metro Rail
City Buses
Bus/Metro
terminal parking
Fare collection
EMV based Payment System
Revenue Improvement model
Shopping malls/ retails
stores etc.,
2
Banks
Central Clearance
House
3
Fare deduction
instruction
5
6
Bank pays back
fixed loyalty &
share non-transit
transaction
revenue with
transit operator
1
1
1
4
Transit
Operators
* Smart Card and payment applications laid out by Europay, Mastercard and Visa
A new model for Smart Ticketing

6. Page 6
• New business model as compared to existing
models adopted
• Business Model leverages BMTC customer base
to significantly substitute investments
• Not just a smart card but an multi-purpose
payment card
• Card Co-branding of card between BMTC and FI
• FI as service provider instead of Card agencies
and IT service providers
• Smart card design, distribution, operation and
customer services by FI
• Allows FI to adopt multiple technology for cards
proven in banking industry
• Reduces risk on technology and vendor lock-in
in the services model
How is it unique?

7. A new model for Smart Ticketing
Page 7
Advantages of Open Loop EMV Prep-paid Cards:
• Wider acceptance of card for transactions by end user
at multiple merchants –Transit Card as ‘top-of-wallet’
choice to card-savvy customers in large cities
• Reduced capex investment for Transit Operators as FIs
would be willing to invest to access the customer base
of the Transit operator.
• Addition revenue for Transit Operator due to potential
revenue share by the FI accrued on customer
transactions outside transit
• Help achieve Common Mobility across multiple modes
of transport
• Implementation taken up in cases of Bangalore
Metropolitan Transport Corporation & in a upcoming
metor
Commuters
Bank issues
Pre-paid Co-Branded
Travel Card
Metro Rail
City Buses
Bus/Metro
terminal parking
Fare collection
EMV based Payment System
Revenue Improvement model
Shopping malls/ retails
stores etc.,
2
Banks
Central Clearance
House
3
Fare deduction
instruction
5
6
Bank pays back
fixed loyalty &
share non-transit
transaction
revenue with
transit operator
1
1
1
4
Transit
Operators

8. What is the Value it offers?
 Substantial financial benefits to BMTC vis-à-vis existing Mode
Page 8
 Reduced CAPEX (Potential savings of ~ INR 100 Cr to BMTC – Planned outlay for smart card
solution)
 Potential Revenue Generation through card transactions outside transit network
 Receive royalty from FI
 Limited Operational overhead as FI offers Card operations and customer services
 Reduced Cash management - Promotion of electronic cash
 Wider utility of card (doubling up as prepaid/CC/Debit card) promotes wider acceptance among
travellers
 Allows multiple card products in market proven for EMV based transactions
 Can be extended to other transit operators for the purpose of Common Mobility
 Reduce vendor and technology lock-in

9. Thank You
Sujith Nair | Senior Manager | Advisory
Sujith.Nair@in.ey.com
+91 819 756 1234