Costa Rica bank manages deployment of transit payment system
Payment service provider Littlepay has been selected by the Central Bank of Costa Rica for a national, multimodal, interoperable payment system for public transport.
The Central Bank of Costa Rica (BCCR) has chosen payment service provider (PSP) Littlepay to facilitate contactless EuroPay, Mastercard and Visa (EMV) payments within the framework of the implementation of the National Electronic Payment System for Public Transportation (SINPE-TP).
The infrastructure will allow users to pay in transit with their bank card for pay-as-you-go trips. Littlepay will process open payments within the new Costa Rican public transport contactless payment ecosystem. The project will operate with a multimodal, multi-acquirer and interoperable business model and provide national coverage.
Increasing public transport usage
With a centralised infrastructure, Costa Rica’s government aims to make fare collection on public transport more efficient and secure. By improving passenger experience, it hopes to promote greater use of public transport in the country.
The back office system will be connected to Littlepay’s payment platform and will receive transaction (tap) data from passengers made on-board buses and the train service that operates in the centre of the country.
The cost of trips is calculated based on fare models defined by national transport authorities. The SINPE-TP will ensure the correct collection of fares and distribution of revenue among operators.
The system will launch with flat fares initially but due to its conceptual design it can be configured to apply fare caps and discounts, as well as other fare models that Costa Rican transport services may require in the future. It is also designed to process payments with QR codes and mobile wallets.
“The forward thinking approach taken by the Costa Rican government and the BCCR will deliver the interoperability and seamless travel experience that so many cities around the world aspire to”
In addition to improving the payment experience of public transport users, the Costa Rican government anticipates a number of benefits for transport operators:
- operational cost savings by reducing the volume of cash collection
- increased safety of drivers, as a result of less cash handling on board
- streamlined process of boarding passengers
- improved hygiene as a result of contactless technology.
SINPE-TP currently operates on all train routes managed by Costa Rica’s state-owned rail authority Incofer (Costa Rican Railway Institute), and it will be gradually introduced to bus services, starting with an initial launch across 200 buses during 2022. It will enable public transport passengers to use their contactless debit or credit cards, or contactless-enabled device, to pay for their fares, no matter the route or operator.
With expansion nationwide, the system will operate on 5,000 buses and it’s estimated the volume of transactions will amount up to 600 million per year.
Since 2015, the BCCR, card issuers and acquirers have worked together to help position Costa Rica as a Latin American leader in the adoption of contactless payments. By the end of 2021, 98 per cent of cards in circulation in the country had contactless technology (1.7 cards per capita), and approximately 77 per cent of all card transactions were contactless.
Littlepay will support BCCR to integrate a variety of validators into the system, and so allow transport operators to choose, among different payment terminals, the option that best suits their needs and preferences.
“The forward thinking approach taken by the Costa Rican government and the BCCR will deliver the interoperability and seamless travel experience that so many cities around the world aspire to,” said Amin Shayan, CEO of Littlepay.
“Littlepay’s modular payments infrastructure and APIs are designed to plug and play with various hardware, software and payment systems, and adapt to future changes in technology. We look forward to working with our partners to get this project launched.”
Littlepay is working with two acquiring banks (BAC-Credomatic and Banco Nacional) as part of the integration process, and others may integrate in the future.
“Both industries will be jointly generating high-quality data for planners, regulators and supervisors of passenger mass transit”
Initially, the system will support payments made using Mastercard, Visa and American Express contactless cards and their linked devices. At a later stage, mobile wallet options such as Google Pay and Apple Pay will be added, as well as mobile QR code payments.
“We are bringing together two important industries for the benefit of people: the financial industry and the public transport industry,” said Carlos Melegatti Sarlo, payment systems division director, Central Bank of Costa Rica.
“The first provides a set of payment instruments and their funding mechanisms; the second promotes banking and financial inclusion to the population at the base of the pyramid, through transit payments digitalisation.
“Thus, both industries will be jointly generating high-quality data for planners, regulators and supervisors of passenger mass transit. The knowledge and solutions of Littlepay was the piece of technology that allowed us to achieve the operational and transactional convergence of these important industries.”
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