Allowing commuters in Chilean capital Santiago to pay for public transport using their smartphones could lead to considerable savings on infrastructure and transaction costs and would also help to address the problem of fare evasion, Chilean telco Claro said on Monday.

Santiago's prepaid BIP card system for paying fares on the Metro and bus systems uses wireless technology dating back to 2001. 

Vady Guerra, Claro Chile's director of value-added products and strategy, told BNamericas that the company has been pressuring transport authorities for some time to introduce Near Field Communication (NFC); short-range wireless technology that allows data to be transferred from a mobile phone.

While the existing technology license is valid until 2018, Guerra believes that now is the right time to implement NFC, saying that there are already an estimated 2mn devices active in the country that are NFC capable and that all new smartphones come with NFC.

One of the limitations of the BIP system is having sufficient locations where the cards can be manually topped up, which today is mostly done at metro stations, although some retail stores now permit it.

Given that virtually everyone now has a phone, that need would be obsolete. Currently transaction costs represent 2-3% of every fare, a percentage that could be cut by half or even to almost zero by using phones, Guerra said.

That would lead to considerable savings when multiplied by the amount of transactions carried out on public transport every day.

"The Metro is based on a cash-in, cash-out system. When you incorporate mobile technologies the cost is diluted because the technology is available and installed everywhere so the cost of integrating the infrastructure is marginal," Guerra said.


According to the executive, using mobile technologies would help address the endemic problem of fare evasion on the Transantiago transport system, which in 2015 was estimated to be 27%.

"Paying with NFC and the smartphone, which would connect directly to the antenna, sending data to the systems that control fare evasion," Guerra said. Currently, information regarding fare evasion is now not online but has to be downloaded manually from the machines on the buses when they finish their route.


Source: BNamericas