It’s Unattended April! As technology advances, we’re seeing an increasing number of ways to pay without the need for human intervention. From vending machines to parking meters to self-service kiosks, unattended payments have become ubiquitous and convenient. This month Al speaks with Mark Langmead, Director, Revenue & Compass Operations at Translink to talk about how transit companies have adopted unattended payment solutions to great success.
It’s Unattended April!
As technology advances, we’re seeing an increasing number of ways to pay without the need for human intervention. From vending machines to parking meters to self-service kiosks, unattended payments have become ubiquitous and convenient.
This month Al speaks with Mark Langmead, Director, Revenue & Compass Operations at Translink to talk about how transit companies have adopted unattended payment solutions to great success.
Also in this episode:
Links of Interest
Al Grego:
Coming up on Shop Talk.
Mark Langmead:
The best part I think about our payment system is that not only is it one fare for integrated [inaudible 00:00:09] to take all those services, but the system will automatically calculate that for you, as opposed to the old days of transit, which really you had to make sure you had the right change, you had to make sure the conductor's there and you know, you paid, you got your ticket and all that.
Al Grego:
Hello everyone I'm Al Grego.
Sam Wong:
And I'm Sam Wong.
Al Grego:
And this is the April 2023 edition of Shop Talk with Moneris. Welcome to the Shop Talk Podcast Sam.
Sam Wong:
Thanks for having me Al.
Al Grego:
Now Sam, before we get into this month's theme, the reason you're here this month is that your team has cooked up an exciting offer for merchants who may be looking for a new payment processor.
Sam Wong:
That's right. Starting this month we're kicking off a campaign called Choose Moneris and Save.
Al Grego:
Snappy title. So what's the offer?
Sam Wong:
So up until June 30th, merchants who are new to Moneris could be eligible to get up to one year of rental fees waived on our latest and best terminals, the Moneris Go, or Go Plus, of course terms and conditions will apply.
Al Grego:
Well that sounds like a deal.
Sam Wong:
Yeah, we're pretty excited about it. So what's this month's theme?
Al Grego:
Ah, I'm glad you asked. So Sam, did you know that the self-checkout was invented by a Canadian?
Sam Wong:
I had no idea.
Al Grego:
Yes, it was invented by Dr. Howard Schneider in the 1980s.
Sam Wong:
That long ago?
Al Grego:
Yeah, and the first self-checkout machines were set up at a Kroger store in Atlanta in 1986.
Sam Wong:
I'm surprised they were around that early, considering the technological limitations they must have had.
Al Grego:
Yeah, well today's unattended payment systems have come a long way since the early days of coin operated vending machines, parking meters, and those self-checkouts from 40 years ago.
Sam Wong:
Unattended payments?
Al Grego:
Yeah, payment without the need for human intervention.
Sam Wong:
I feel those early self-checkouts required plenty of human intervention.
Al Grego:
They did. There's a great episode of Planet Money Podcast about it.
Sam Wong:
Dr. Schneider must be a rich man.
Al Grego:
He isn't.
Sam Wong:
How so?
Al Grego:
Well he sold the company before it took off.
Sam Wong:
Ouch.
Al Grego:
Yeah.
Sam Wong:
So is that the theme? Unattended payments?
Al Grego:
Precisely. It's Unattended April.
Sam Wong:
Is that a thing?
Al Grego:
I'm making it a thing.
Sam Wong:
Okay then.
Al Grego:
As technology advances we're seeing an increasing number of unattended payment options in many different industries. We're going to learn about that this month.
Sam Wong:
Who do you have lined up?
Al Grego:
Well first we have our resident expert Doug Hatton coming on to talk about open loop payments.
Sam Wong:
Doug is certainly an authority, who else?
Al Grego:
Then for our featured interview I'll be speaking with Mark Langmead from TransLink in BC about being at the forefront of much of this technology in North America.
Sam Wong:
Wow. That should be an interesting chat.
Al Grego:
Indeed. And finally our data expert Sean McCormick returns to provide context and data behind this growing trend in payments.
Sam Wong:
Cool, this is a very strong lineup.
Al Grego:
As always. So let's begin with our chat with our expert Doug Hatton.
Speaker 3:
Ask an expert.
Al Grego:
I'm joined by Doug Hatton, he's the VP of client solutions at Moneris. Doug, thank you for joining me today.
Doug Hatton:
Very happy to be here.
Al Grego:
So as you know, this month's theme is Unattended April, and for those who don't know, unattended payments are payments without the need for human intervention, so like kiosks and transit and vending machines, correct?
Doug Hatton:
That is very correct.
Al Grego:
But the question I'm asking you as our expert is around open loop payments. What does open loop mean?
Doug Hatton:
The open loop payments is a new concept that was brought forward to support credit and debit payments in transit. Now the difference in transit compared to your normal purchase is as you're going through a fare gate or getting on a bus, you don't want to stand there and wait even one second for an approval on your card.
Al Grego:
Right.
Doug Hatton:
So what open loop payments does is it instantly gives you access onto the vehicle and then in the background that payment goes off and gets processed and in the cases where it's not approved, the transit authorities have the opportunity to go and try and reprocess that payment and recover that payment. So there's an opportunity for them to make sure they get paid. You're on the bus, you're long [inaudible 00:03:56] down the track and they can go back and try and get payment.
Al Grego:
So it's all about getting payment quicker for the end user with preapprovals as opposed to waiting for the process to happen because there's often a long ... especially in a transit situation, there's a long lineup of people trying to get on a bus or waiting for a train.
Doug Hatton:
Exactly. You want to get people through that line as fast as you can and not queue people up just because they're doing a payment.
Al Grego:
Right, now does this mean the end of those prepaid cards for transit?
Doug Hatton:
Well it's not an end, it's complimentary to those cards. So the closed loop systems, those cards like Presto cards in Ontario and Toronto area, they will continue to be there, because there are still going to be people that want to have a prepaid card. They may not want to use their credit card et cetera, but the benefit it brings is for people that don't use the transit frequently, so if you want to get on a Go Train for example in Toronto, you don't have a Presto card, you no longer have to go to a ticket booth or go onto an application and make your payment for the ticket, you simply tap as you get on, ride your train, tap as you get off, the fare is calculated and it is processed onto your credit or debit card.
Al Grego:
That's music to my ears, having taken transit for 15 years, not having to worry about loading my card, I can just use a credit card or a debit card.
Doug Hatton:
Exactly. It's all about convenience for the rider.
Al Grego:
Now the theme for this month couldn't have come at a better time, last week we introduced a new unattended solution.
Doug Hatton:
That's correct. So while we look at open payments as being an unattended payment for transit, unattended payments are growing, self-service is growing, so we released a product called the IM30 which is a new modern unattended payment device set up to have a very nice screen, so that you can interface with your customers, and then support all types of payment, whether it's tap, insert, or futuristic payments around QR codes and things like that.
Al Grego:
That's great Doug, if anyone wanted to learn more about that where would they go?
Doug Hatton:
You'd go to our Moneris website, it'll be on there, or if you have a Moneris sales rep they'd be more than happy to give you the information on it.
Al Grego:
Thank you very much Doug for your time today.
Doug Hatton:
Thank you very much, it was great talking to you.
Speaker 3:
Featured interview.
Al Grego:
I'm joined by Mark Langmead, he's the director of revenue and compass operations at TransLink. Mark, thank you so much for joining me today.
Mark Langmead:
Thank you very much for having me.
Al Grego:
So we'll begin with TransLink, exactly what does TransLink do?
Mark Langmead:
So TransLink is also known as the South Coast British Columbia Transportation Authority, but TransLink is kind of a unique agency in that we are a part of the government, we sit in between provincial and the city level, and TransLink is an integrated transportation network authority. So we have responsibility for all of the transit services, so we operate a ferry, inter-harbor ferry, heavy rail, automated light rail, so our rail system does not have conductors on it, all of the bus service, accessible service and so on, and all of that falls under TransLink's umbrella. The other thing that falls under TransLink's umbrella is all the major road network, and so the bridges, we have 23 bridges in the region, and we are vested with the responsibility of both moving goods and services through the region, but also people that live here. And that's why it's an integrated sort of responsibility, and quite a unique one for North America.
Al Grego:
Yeah for sure, I mean I wish things were that connected here in Ontario. It's a bit confusing if you're an end user for sure.
Mark Langmead:
Yeah it's confusing and it's frictional, it's payment friction really. Not knowing how to pay or what to pay discourages people from buying, and it doesn't really matter where you ... what you're selling, if you're a product or service is difficult to acquire or is intimidating, and we have that with vending machines, vending machines scare everybody, they're just [inaudible 00:07:48] that way. So we try to removed that friction and if you're thinking about taking travel from a bus to another bus and then a train, why wouldn't you pay the same fare?
Al Grego:
Yeah.
Mark Langmead:
So our fares have zones, so based on how far you go you can pay more or less if it's a short trip, and days of week and time of day, and so during rush hour things are priced higher, but cheaper on the weekend and so on, so the best part I think about our payment system is that not only is it one fare for integrated to take all of those services, but the system will automatically calculate that for you, so you don't have to really know how much you're buying, as opposed to the old days of transit which really you had to make sure you had the right change, you had to make sure the conductor was there and you know, you paid and you got your ticket, and all that.
Al Grego:
It definitely makes a lot of sense. So this month's theme is unattended payments, and I mean transit systems all over the place have already been doing unattended payment for quite a while, but just before speaking to you I spoke to my colleague Doug Hatton and he explained open loop payments, so we understand what those are, how long had TransLink offered open loop payment?
Mark Langmead:
We began in 2018, and we have our own agency card, our Compass Card, but then we moved into accepting people's credit cards on buses and trains just by tapping your VISA or your MasterCard, we added American Express to that and so we have all three, and just this last January we launched Interact Debit, so contactless debit across the entire system, and you can also use any of those forms of payments loaded to a smartphone, a smartwatch, it doesn't matter if it's an Apple watch or a Samsung Galaxy phone, it doesn't matter, if you can load it, it works.
Al Grego:
Right.
Mark Langmead:
Including Fitbit.
Al Grego:
Yeah I love it, I use my Fitbit all the time for payments. I hardly bring my wallet out anymore. So does this mean-
Mark Langmead:
[inaudible 00:09:32].
Al Grego:
The death of like those payment cards?
Mark Langmead:
The short answer is no, and it's definitely in the interest of a transit agency in particular not to issue your own fare media and your own fare product.
Al Grego:
Right.
Mark Langmead:
It's got liabilities, it's costly, you're buying chips, various manufacturers get involved, it's difficult. So it's best avoided, and if you look at Transport For London, which is one of the benchmark companies, agencies, in the world, they have introduced contactless payment to replace their Oyster Card, and their numbers are in the billions and billions and billions again, and so it was really costing them a tremendous amount of money to support that Oyster Card, and I don't know anybody who hasn't visited London who doesn't have a drawer filled with old Oyster Cards, but those Oyster Cards cost the agency, and the money that you store on them doesn't actually accrue to the agency, it can't be used by the agency because it has to be held in trust. So it turns it into a liability.
Since launching contactless in London, which is how they term open loop payments, contactless payments are now 65% of the adult category payments, which is a huge success. So we definitely see the benefits of going there, it's convenient for the customer, it's simple, and it costs less to the agency. So that's where you want to head definitely in terms of a strategic payments direction that you'd want to set out, but the downside is how do you accommodate people who don't have a credit card? And how do you accommodate people who are unbanked? And that is a very big issue when you look at equity and inclusion, transit agencies need to be inclusive by their very nature, and so the technology exists, but it's not deployed widely yet, where a concession category, say an 18-year-old or a 17-year-old who would be entitled to a lower payment, they will never have a credit card at that point in their life, so they wouldn't be able to take advantage of it.
Al Grego:
Sure.
Mark Langmead:
Similarly seniors, if you're 65 in our agency you get about a 30% discount on your fares, if you're 65 and you have your credit card you're going to be charged an adult fare, so how do you do that? And so there are solutions but nothing has been really robust and widely implemented.
Al Grego:
So when you talk about, you know, open loop and tapping and stuff, how does that work, for example, with a debit, if you have multiple accounts?
Mark Langmead:
So it automatically will default to your checking account, when you set up your banking, if you're using your contactless payment, and this would be for any transaction, it will default to that. On the agency side, or the company side that is selling or vending, you will be doing a preauthorization, and then a complete charge for the exact amount. In our examples, and in all transportation examples, the transaction time is a critical factor, less so when you're at the grocery store and they're busy bagging and you're tapping and it takes two or three seconds, that's fine in that and it does a full check and payment processing of the exact amount. In a transit example if you had that three second transaction and you think about a busy transit station where you have a few hundred people lined up behind you, that two or three seconds will feel like an eternity. So we benchmark our timings have to be less than half a second.
So 500 milliseconds, our system performance right now, it averages around 300 milliseconds per transaction, but for a debit, contactless debit or a contactless credit transaction, the actual processing is done as a preauthorization and then the actual charge is processed after the fact.
Al Grego:
Well I've definitely missed my share of trains when I'm trying to reload my card in order to get on the next train, so I feel that pain and I'm looking forward to having that more widespread. And I mean you know, we've talked before, but TransLink is pretty much ahead of the game in North America. You're comparing yourself more to European agencies?
Mark Langmead:
Yeah, we're very fortunate, our smart card program began originally in 2010, is when we scoped out the system and we launched the system in part in 2013 but a full adoption was in 2016, the technology has moved on. Customer behavior has moved on even more so if you think about your own ... as you mentioned you know, they rarely take your wallet, five years ago that would not be the case, in fact 10 years ago you probably wouldn't even have thought about that being the case or being possible, so these are conveniences customers need to do, and want to do, and transit agencies need to invest in technology that will enable that. We right now are pretty much the only ones in North America that allow contactless debit and one of the very few that have contactless payments overall. If you look at London and if you look at the European experience, it varies depending on north to south and which country, but there are some really innovative things happening there.
And so [inaudible 00:14:04] technology is another one that we watch carefully which is Bluetooth enabled payments. There's a couple of examples on the market right now, and the other markets we look to is Asia, so we look globally because some neat stuff is happening in other parts of the world and we definitely want to bring that to our customers first.
Al Grego:
Well I can't wait to see some of the other innovations that might be coming. Do you have any that you want to share real quick here that you're excited about?
Mark Langmead:
Sure. Well one of the things that we do, kind of a neat thing that we've developed, essentially wearables and little miniature models. So this is a sky train mini, and it is your travel purse, basically you load this with money, you can put a monthly pass on this, and when you tap on a bus or a fare gate, the little headlights light up.
Al Grego:
Oh nice.
Mark Langmead:
So that's pretty cool.
Al Grego:
So just to describe to the listeners, because this is an audio only podcast, what you're showing me is a key chain that's shaped like a bus or a light rail transit train, and you load that with your payment and then you can tap that. That's great, yeah. So that's fun.
Mark Langmead:
Exactly.
Al Grego:
Yeah.
Mark Langmead:
And it's fun. It's exactly that. When we actually brought these to market last year in Christmas, just before Christmas, we saw about 4000 people show up at the station and flood the station in line trying to get them. We sold out in about two hours and it was really excited, people are really getting into it, so it's little things you can do.
Al Grego:
Yeah I can see those really being Favorited by students for example to go to school and stuff. Also parents can load their bus pass so they're not using more or charging more. Very good.
Mark Langmead:
Yeah. The other thing we do, we also have things like wristbands and key chains, key fobs, and the like, and those are other things that they're the same idea, you can put your monthly pass on a wristband, they're very high quality wristbands so they feel really good, and if you're carrying groceries or your laptop and all the other stuff with it, you don't have to pull out a card out of your wallet, so it's a really neat convenience for a frequent commuter that's just a nice way to travel and it shows off that hey, you're a public transit user, which is kind of neat.
Al Grego:
That's great. I mean if somebody wanted to learn more about all the amazing stuff that TransLink is doing, where would they go?
Mark Langmead:
Well you can certainly reach out to me here at mark.langmead@translink.ca, and I'd be happy to talk about anything that we're doing and coming up.
Al Grego:
Okay. Well thank you so much for your time today Mark.
Mark Langmead:
Yeah, thank you.
Cass McPhee:
Hey, business owner. Does your current POS service provider offer terrible customer service? Are they unable to accept all forms of payment? Do they leave you feeling exposed to fraud? If you answered yes to any of these then you're obviously not using Moneris, Canada's number one payment processor. We provide advanced fraud protection, give you 24/7 live support, and accept all major credit cards, plus until June 30th new clients can get the latest terminals for zero dollars a month. In other words no rental fee for up to a year. For more information on our quick and easy out of the box solutions, please visit us at the link provided in the show notes. See why so many Canadian businesses choose Moneris. Terms and conditions apply.
Speaker 3:
By the numbers.
Al Grego:
I'm joined by Sean McCormick, he's the director of business development data. Sean, thank you for joining me today.
Sean McCormick:
Good to be here again Al.
Al Grego:
So Sean, it is Unattended April, I'm trying to make that a thing, so we're talking about unattended payments. Now, what can you share with us about how much that's grown in the last while?
Sean McCormick:
You know, I don't know about you Al, but I use contactless payments for virtually every transaction, because the increased tap limits going from 100 to 250 in most cases, there aren't a lot of transactions that most consumers on a daily basis are going to do that are going to be over $250. Of course you've got big ticket items, major appliances, home renovations, things like that-
Al Grego:
And these days we have groceries.
Sean McCormick:
Right. Oh absolutely. So the vast majority of transactions is going to be under $250, and there was a big [inaudible 00:18:11] between the old limit of 100 and the new limit of 250. So I think people are beginning to understand that the limit is at 250 at most places because of the pandemic. Remember, that was brought on by the pandemic.
Al Grego:
For sure.
Sean McCormick:
We were trying to promote, and businesses were trying to promote not touching anything, not touching that terminal. So with the limit at 250 now, we've seen, for example, in April of this year, the share of transactions that happened in a contactless manner is 63%, so more than half. Some context to that, so that's up from April of last year when it was 61%, April of the previous year was 56%, and April of 2019 was 49%, so in three years the share of contactless payments has grown by 20%, 49% to 63%. That's a 20% growth rate, and that's insightful.
Al Grego:
For sure, and I mean for unattended to work really contactless needs to work and needs to be more prevalent and as these numbers show, they became more and more prevalent, especially over the pandemic. I mean I always make this point, I hardly ever pull my wallet out anymore, I use my watch, my Fitbit, for most payments whenever I go out. So that's great. Now in terms of unattended, usually you see those in parking lots and in transit categories, so I mean we can't exactly see which transactions are from unattended but we can kind of surmise from the types of merchants where that growth might be, so we're looking at like parking lots, local transit, what do we see there?
Sean McCormick:
Yeah well looking at local transit, so you're over year volume growth up 68%, so that's transit right across Canada, 68% growth in dollar volume year over year. The interesting part about this, it probably doesn't surprise anybody that transit volume is up because people are going back into the office, they're going back downtown, things are open wide again and consumers and commuters are ready to go, so that volume growth is up 68%. The transaction growth in transit is up 83%, so one theory on why that delta is, 68% dollar volume growth, 83% transaction growth is perhaps one-time payments in transit. So where you have a single monthly pass might be worth $150, representing a single transaction, you've got thousands of transactions worth one and two and three dollars.
Al Grego:
Right.
Sean McCormick:
So what that tells me is that there might be some growth in one-time ridership.
Al Grego:
Yes.
Sean McCormick:
Rather than spending $150 for a monthly pass.
Al Grego:
Yeah.
Sean McCormick:
That could be happening.
Al Grego:
I mean to me it makes sense because for example in my case, I work from home, I don't need a monthly pass, but I do go in maybe three or four times a month, so those are the individual transactions. So I may be spending less on my commute, but I'm making more transactions, and again, unattended tapless would make that a lot quicker, especially if you're ... I don't know about you, but I've missed my share of trains waiting in line to try to load my card to get on the train.
Sean McCormick:
Right. Hey, listen at the end of the day Al, contactless is incredibly convenient. I tend to think as well, I have no scientific data to back this, however, I do see people using Apple Pay and Google Pay a lot. I leave the house now without my wallet at least 50% of the time, whereas I used to take my wallet every time I left, because I know that I'm probably not going to go buy anything worth more than $250, I can go get gas and fill up my car, I have a 100 liter tank in my car, that's not going to cost me $250 to fill it, so I can really go and do anything I need to do with only my phone, which is a contactless form of payment.
Al Grego:
Thank you so much for your time today Sean.
Sean McCormick:
Thanks Al.
Speaker 3:
Save the date.
Al Grego:
I'm joined by Ella Urquhart, she's the event manager here at Moneris. Ella, thank you for joining me today.
Ella Urquhart:
Thanks for having me Al.
Al Grego:
So last month we talked about this new ESG report that was coming out soon, it is now out, correct?
Ella Urquhart:
Yes, so we launched our first environmental, social, and governance report, our ESG report. It provides an overview of our performance and commitment to sustainability and reasonable business practices. The report follows our ESG framework which consists of our four main pillars, team members, community, environment, and governance, and it outlines our achievements in 2022 and states our commitment to continue to do our part in 2023 and beyond.
Al Grego:
So if people want to check out the report where would they go?
Ella Urquhart:
They can visit our website and download a full copy of the report.
Al Grego:
Excellent, thank you. So well, what's happening this month?
Ella Urquhart:
Well, we are going to be participating in the RC show from April 10th to April 12th, that's the Restaurants Canada Show, Moneris will have a booth, we're at booth 1341, and we're also speaking in the Learning Lounge, which is going to be on Monday April 10th at 4:15.
Al Grego:
Okay and where can we buy tickets for that?
Ella Urquhart:
You can purchase tickets at rcshow.com.
Al Grego:
Great. Anything else?
Ella Urquhart:
Yes, in partnership with Elevate we are excited to announce the fourth cohort of eCommerceNorth Accelerator launching on April 11th. You can check out ecommercenorth.ca to find out more about the companies participating in this cohort.
Al Grego:
Okay great. And anything else?
Ella Urquhart:
Yes, another exciting opportunity with eCommerceNorth is the first French Innovator Challenge, it's a four week program supporting early stage startups with the tactical skills to grow their business and master the sales pitch for a chance to win one of three grants of $1500.
Al Grego:
Excellent. That's horrible French.
Ella Urquhart:
I love it.
Al Grego:
Where can we learn more about that?
Ella Urquhart:
So the application deadline is April 12th, so you can check out Elevate and Moneris' social channels for how to apply today, and we'll have a link in the description of this podcasts.
Al Grego:
Perfect. Thank you so much Ella for your time today.
Ella Urquhart:
Thanks so much Al.
Al Grego:
And that's all we have for this month, I hope you found this episode informative. If you haven't already, check out Moneris' other award-winning podcast Yes We Are Open, season four began this month. Here's a little taste.
Success in business doesn't come without moments of struggle, moments when you had to face your challenges head-on. When you overcome these moments what you're left with is not just success, you're also left with a story, a story of how you did it, a story to inform, inspire, and be proud of. At Yes We Are Open it's our business to tell these stories, and we're kind of good at it. Subscribe now to season four of the award-winning Yes We Are Open, available wherever you get your podcasts.
Sam Wong:
If you haven't already, you can subscribe to this podcast and Yes We Are Open, wherever you get your podcasts.
Al Grego:
If you'd like to support this show, share this podcast with your network or review us on Spotify or Apple Podcast, and finally, if you have a payment-related question you'd like to submit to one of our experts, you can email us at podcast@moneris.com.
Sam Wong:
Join us again next month for more expert insights and data to help you grow your business.
Al Grego:
Thank you so much for co-hosting Sam.
Sam Wong:
Thank you Al.
Al Grego:
On behalf of Sam, myself, and the rest of Moneris, thank you for listening to Shop Talk, talk again in May.