Visa Australia is courting banks and state transport authorities in a bid to integrate its 'contactless' chipped credit card with public transport smart card ticketing systems across the nation.
If Visa is successful in its bid, Visa cards, which were once shunned in Australian taxis, would be tightly integrated with Australian public transport. A ticketing application on the card would allow commuters to pre-pay their travel fare at retail merchant facilities.
The credit provider is also "working out details" of its proposal with smart card infrastructure providers ERG Group and Cubic Transportation systems. ERG and Cubic have won tenders to integrate smart card readers in public transport infrastructure in New South Wales and Queensland.
The cards' chips are already compliant with wireless card-reading equipment that will be installed by ERG and Cubic.
Thus far, Visa's efforts to integrate the card into mass transit systems have been concentrated in northern Asia. If all parties involved in the talks can reach agreement, Visa said it could be preparing live trials of the cards in Australia's public transport system in 12 to 18 months.
Transport New South Wales has declined to comment on the Visa bid pending its negotiations with ERG over the NSW smart card ticketing project.
Under the proposed system, the governments would effectively subsidise banks for the cost of issuing the contactless credit cards. Vipin Kalra, head of chip cards for Visa Australia New Zealand, said the government would also reduce costs associated with issuing tickets.
"It's a win-win for all the major parties and we're trying to articulate that to banks and transport departments of each state," said Kalra.
However, when it comes to shouldering the cost of the service, consumers have been left in a precarious position. Visa has protested publicly over the recent Reserve Bank of Australia rulings to reform the credit card industry and remove mechanisms to limit transaction charges levied on consumers by retailers.
Visa claims that consumers will be shielded from transaction charges by extending current commission-based ticket distribution agreements between retailers and transport agencies.
"The same relationship can be extended to load tickets on the chip cards, of course at a commission. So the merchants should not pass the cost to the consumer, and transport operators should monitor that" said Kalra.
However it's clear that Visa hopes the cost of maintaining the service will eventually shift to consumers.
"I think the consumer will take some time to understand the value proposition and then if they see value they may be willing to pay additional costs," said Kalra.
Visa's promotion and distribution of the cards has so far been concentrated in northern Asia. In Korea, said Vipin, the company has issued between 15 and 20 million cards for use in the country's mass transit systems.
