Paul wrote:
Mizter T wrote:
snip

Ultimately, I think that many would find it useful, but of course if
anyone was worried about it then they don't have to use the system.
Indeed I wouldn't recommend it to one of my scatterbrained friends. She
doesn't trust herself with a monthly Travelcard so buys a weekly one,
and she manages to lose an average of at least one a month. She doesn't
have an Oyster card, which is just as well as I reckon the Oyster
system couldn't cope with such consistant incompetence!

I don't really see any advantage of using an Oyster card as electronic
cash, over a debit card. Since TfL regards these as a possible source of
extra revenue, presumably retailers would have to pay some charge, in
the same way as they do when they accept credit cards.


You ask why use Oyster as an e-money system when a debit card can be
used? I wouldn't use a debit card to buy a newspaper or a pint of milk
- indeed, the shop keeper wouldn't allow it. The Oyster e-money system
would be aimed at small purchases. A similar system in Hong Kong using
the 'Octopus' transport system smartcard has bee very successful.

The problem with debit card payments are twofold.

(1) Most debit/credit card payments are authorised online which takes
time (i.e. too much faffing around). An Oyster e-money system wouldn't
need to connect to the central database for each transaction. AIUI the
Oyster e-money system would work differently - there'd be no need to
authorise each payment online, the amount would just be debited from
the card straight away. The Oyster terminal in the shop would hold a
list of the blocked (i.e. lost or stolen) Oyster cards that wouldn't
work, and each evening the terminals in the shop would download it's
transaction data to the central database in order to reconcile the
records. I believe this is how the Oyster terminals in newsagents
already work - they are not constantly connected to the central
database, but dial-up each night.

(2) The cost of a debit/credit card transaction levied by the merchant
card services company (i.e. the bank) dissuades shopkeepers from
accepting them for small purchases, and leads many of them to impose a
minimum purchase value and/or a supplementary cost for the priviledge
of using a debit/credit card. I suspect that with any Oyster e-money
system any costs would be smaller, or far more likely there'd be a
different economic model in use, where there would not be a cost for
each transaction.

(I'm no expert, so what follows is just amateur speculation, and
perhaps it doesn't really equate but I'll write it nontheless. The
Oyster e-money system may actually reduce transaction costs with
regards to the flows of money between the newsagents and TfL. At the
moment the newsagents have to forward money to TfL for all the tickets
they sell, presumably keeping a small commission for each sale. In the
future people would also be spending e-money via their Oyster card, so
there'd be a flow of money from TfL to the newsagents. To a certain
extent this would cancel out the flow going the other way. This works
on the presumption that there are two distinct user groups: those
spending e-money in newsagents who have topped up their balance
directly with TfL on the tube - perhaps via the upcoming auto-topup
system; and those who are buying tickets or topping up their Pre Pay at
a newsaganets, who pay with cash.)


Anyhow, I'm sure that enough people would find an Oyster e-money system
useful and I reckon it'd be pretty successful. Though for those wary of
Big Brother it'd be something to steer clear of.