Toronto was recently named the best city to live in according to the Economist. This was a huge sense of pride for me and other Torontonians that call this city home. Alas, if you’re commuting in Toronto, try taking the streetcar and you’ll feel like you’ve traveled back in time to the 1930s. You won’t have the privilege to get on board unless you have the exact coin change, a TTC token, a paper transfer, or a TTC pass. Once you’re on board, the same fare you just paid will get you to the next station or across the entire city.

There have been many initiatives to improve the transit system in recent years to catch up with the rest of the planet. For example, Toronto has been slowly rolling out a transit payment system, called PRESTO, that is similar to London’s Oyster card and Hong Kong’s Octopus card. Transit riders can top up their PRESTO card, which is an NFC Desfire card, and pay by tapping an NFC reader. The NFC reader deducts the fare directly from the card and once a day synchs this information with a cloud database to consolidate rider’s accounts. Once all phones become NFC enabled, riders can simply download the PRESTO app and pay for transit using their mobile phones.

Now let’s try something crazy and travel from the 1930s to 2025. Let’s also imagine that Toronto has deployed all of its new Bombardier streetcars, and that every bus, streetcar and subway station is equipped with a PRESTO system and the card is in the hands of millions. Wouldn’t it be nice to also use the PRESTO card to pay for parking, coffee at Tim Hortons and even groceries? This idea is not unique, nor am I the first person to suggest it. In fact, the people of Hong Kong have been using the Octopus card to pay for items other than transit fares since 2005!

In order to expand the usage of PRESTO beyond transit payments, an entity like Metrolinx would need to implement a technical standard to provide the ecosystem necessary for third party development. This standard would need to address how a POS terminal can become PRESTO certified and how developers can integrate with the PRESTO API. Once that’s established, PRESTO certified merchants can start accepting payments using transit cards or PRESTO phone app.

The advantages of expanding PRESTO beyond transit are many: riders will start putting more money on their transit card, which means higher reserve ratio; and Metrolinx can charge merchants transaction fees. In addition, there is currently a gap for mobile payment since none of the major players (Apple Pay and Google Wallet) work in Canada. PRESTO already has a large user base, so it can exploit this opportunity of mobile payment. This opportunity will certainly not last until 2025.

Allowing third party development will be the most effective way to unlock the power of PRESTO.


Mar 21, 2015