May 13, 2013

Danish national smartcard nears full coverage

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Denmark is one of the first countries in the world to implement contactless smartcard technology on a national scale. Keith Barrow looks at the challenges and successes of the Rejsekort project.

CONTACTLESS fare collection has become an everyday fact of life for millions of people in cities around the globe, making public transport more convenient while giving operators a detailed picture of traffic patterns and helping them to tailor their products and services more closely to individuals and demographic groups. Yet the application of smartcard technology at a national level is still relatively unusual.

The Netherlands led the field with OV-Chipkaart which despite some significant teething problems and cost overruns is now in use with public transport operators across the country. Netherlands Railways (NS) will phase out paper ticketing entirely by the end of this year, adopting OV-Chipkaart for all fares.

Another leader in national public transport smartcards is Denmark, whose Rejsekort system is now in the final stages of implementation. Unlike OV-Chipkaart, the development and implementation of the Danish system is being overseen by a joint company, Rejsekort A/S, a collaborative venture in which nearly all of the country's public transport operators own a stake. "The idea was to have one system, one concept, one core brand, and one set of service processes," explains Mr Gregers Mogensen, chief consultant for Rejsekort A/S. "We already had a limited form of interoperability in paper-based ticketing, so we wanted to continue and expand the concept through a common card."

In 2005 Rejsekort A/S awarded a turnkey contract to the East-West Consortium led by Thales and Accenture to supply and install the system, and operate and maintain it until 2018. Thales has supplied the fare collection system including ticketing equipment, security, and back-office systems. Hosting for back-office systems is being provided by IBM SDC. Annual operating and maintenance costs are expected to be around DKr 215m ($US 37.7m) two years after full deployment, falling to DKr 200m in 2023.

Rejsekort continues with the existing zonal system, but customers no longer need to be aware of zonal boundaries because the system automatically calculates the fare from the distance between the check-in and check-out points. As there are no ticket barriers on the public transport network in Denmark, users are required to check in and check out at separate terminals located in stations or onboard buses. The card currently only has pay-as-you-go functionality, although the range of fare options may increase as usage is expanded.

smartcardThree card types are currently offered. The Personal card can be purchased by a child, an adult, or a pensioner, and can only be used by the cardholder. This card offers the highest level of discounts, intended to incentivise regular use, and can only be used by a single registered cardholder. The Flexible card is also registered to a specific customer but can shared between users and offers smaller discounts, while the Anonymous card can be used by any passenger without registration but the value cannot be recovered if the card is lost or stolen. The Personal and Flexible cards can be purchased online and together with the Anonymous card at more than 400 locations across Denmark.

Machines at railway stations allow users to top up their cards, view their account balance and recent transactions, check-in for group travel, or buy an Anonymous card. Further services are available on the website, which allows users to calculate the price of a journey, view travel history, and top up cards.

Following the completion of a small-scale pilot in 2009, the system has been progressively rolled out across the Danish public transport network, but like OV-Chipkaart, Rejsekort has not been without its teething troubles. The full rollout was due to be completed by December 2010 and when the initial deadline was missed the then transport minister Mr Hans Christian Schmidt threatened to terminate the project.

Last year the government was accused of suppressing details of a report carried out by US IT consultancy Gartner which was critical of the financial operating system adopted by Rejsekort A/S. The report's authors argued that the system made it impossible to budget and create meaningful reports, and suggested that Rejsekort A/S adopt a new system that would ensure sufficient data is available for analysis where required. It was subsequently recognised, however, that Rejsekort A/S had taken steps to ensure proper accounting.

Critics of Rejsekort also argue that it is not easy to distinguish between check-in and check-out terminals, and also point out that last year nearly 200,000 journeys were not completed with correct check-out of the system, although Rejsekort A/S says this reflects the fact that many passengers were initially unfamiliar with the process and the number of failures is declining as usage becomes more widespread.

Mogensen says the technical aspects of the project were not the most challenging parts of its implementation. "Because it is a common system there is a large-scale change of customer usage behaviour and customer support processes that you have to be ready for," says Mogensen. "There is a lot of emphasis on self-service, and already 85% of top-up transactions are made this way, because we've taken the time to make it work correctly. This is a big change and it was a steep learning curve. Staff have to learn new ways of helping customers because the system is completely different."

Despite the early problems encountered by Rejsekort, the system now covers all train services, with machines and card readers installed at 447 stations nationwide, as well as the Copenhagen S-Train and Metro networks. The card is also valid on around two-thirds of buses and according to Morgensen, the rollout across the remainder of the bus network will be completed by 2015. By the time the system is fully operational, it is expected that 2-3 million cards will be in circulation, around half of them held by regular users.

Positive reaction

Mogensen stresses that the public reaction to Rejsekort has been largely positive. "Transition is a big change for customers, but generally the public has embraced the card," he says. In a survey of passengers carried out last December, 84% of respondents said the card was a very good idea, while 77% would recommend the card to other people and 70% have already done so. The survey also revealed that 79% of Rejsekort users have opted for the personal card, while 15% carry the flexible card and 6% use the anonymous card.

Last year the system recorded 3.4 million trips with annual turnover DKr 7.5bn, and there are currently around 300,000 active Rejsekorts in circulation. According to Mogensen around 40% of cards are used every week.

One of the objectives of the Rejsekort project was to make public transport more attractive by improving the flexibility and convenience of travel and rewarding regular use. "I think it's too early to say at this stage what the impact of the system will be, but the early indicators are that it does encourage greater public transport usage," says Mogensen. "If we only see a 5% increase in public transport use because of Rejsekort it would be a fantastic outcome."

Like the Netherlands, Denmark demonstrates that there is no easy way to implement a national public transport smartcard. With numerous stakeholders from the government, transport authorities, and the operators to users groups and individual passengers, the risks are varied and often complex, particularly where multiple fares systems are involved.

Unfamiliar technology naturally breeds suspicion, especially in situations where the traditional alternative is being withdrawn, and passengers need reassurance from an early stage in the process that the system will be transparent and their journey will not be more expensive.

Nonetheless, by completing the transition to Rejsekort, Denmark will become a pioneer in national smartcards, offering valuable experience to other countries that are now contemplating similar technologies.

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