On 24 Nov, 20:18, Tom Anderson wrote:
On Fri, 23 Nov 2007, Mark Brader wrote:
Tom Anderson writes:

But do they take Oyster?

You may think you're joking,

I wasn't! It would be easy enough to do, i'd have thought, and a good
wheeze.

tom


I think it would fall foul of regulatory issues though. I understand
that if Oyster were to be used as a cashless payment system (for non-
transport services) then it would have to be regulated by the FSA as
if it were a bank - whilst as things stand, Oyster can only be used as
an electronic ticket for travel so it doesn't fall within the scope of
this regulation.

There were indeed plans for Oyster to be used as a cashless payment
system aka e-money card, for making small payments - much like the new
Visa "payWave" system (which is utilised by the new Barclaycard
Onepulse credit card). My understanding is that this would have thus
meant the Oyster system would have to be regulated as if it were a
bank, and TfL's plan was to partner with an existing bank or financial
institution rather than become a bank themselves. However, whilst TfL
talked to many banks there was a failure to agree terms with any of
them. It appears the complex issues of costs and related commercial
agreements just couldn't be, er, agreed.

There's some press comment on this issue available he
FT:
http://www.ft.com/cms/s/0/296a2200-d...0779e2340.html
The Times:
http://business.timesonline.co.uk/to...icle711866.ece
The Register / Kablenet:
http://www.theregister.co.uk/2006/05...tcard_shelved/
ZDNet:
http://news.zdnet.co.uk/itmanagement...9268126,00.htm


I wonder if the banks were not also concerned with protecting their
existing merchant payment infrastructure as well. The RFID-based 'pay-
and-wave' systems for small purchases, available in the UK now from
Visa ("PayWave") and soon from MasterCard ("PayPass"), are arguably
much more agreeable to the banks as these new systems can be bolted on
to their existing merchant payment infrastructure. Additionally the
banks are very comfortable dealing with Visa and MasterCard when it
comes to payment systems - unsurprisingly as that is their bread and
butter and their clients are the banks - which is a further mark
against any bank wishing to partner with TfL for an e-money system.

Interestingly whilst the Octopus smartcard system in Hong Kong is
often held up as an example of how Oyster could have moved into e-
money, the FT article includes this comment from Tim Jones, a
consultant to Simpay, a mobile payments platform:
"Even in Hong Kong, where the Octopus card has been successful, 80 per
cent of its use is for journeys, while only 20 per cent is from
transactions made in shops"
Of course as someone pushing an alternative e-money system he might
well wish to do down the potential of Oyster e-money, but I've no
reason to doubt that the statistic isn't correct.

Perhaps this is all for the best, as the FT article also features
comments from Will Judge - who was (still is?) Director of the Oyster
E-Money programme (which I think is/was a role within TranSys rather
than TfL) - stating that he thinks "there is a significant market for
paying with Oyster cards at newsagents, public houses, parking
machines, fast-food outlets and supermarkets".

Oyster and pubs just sounds like a recipe for trouble! Can you not
picture the scenario - the lubricated multitude leaving the hostelries
of London town and then finding, to their puzzlement, on trying to
board a bus or pass through a stations ticket gates, a delightful
error code of 36, the Oyster equivalent of "go back three spaces" (or
even "go to jail"?).