By Lorenz S. Marasigan, October 12, 2020; Business Mirror

AUTOMATED fare collection systems (AFCS) for land transportation should be interoperable by December, as the government finalizes a foreign-funded feasibility study that will create a central clearing house for cashless transport transactions.

Department of Transportation (DOTr) Assistant Secretary Goddes Hope O. Libiran said the Export-Import Bank of Korea (Kexim) is funding a national feasibility study that seeks to enable commuters to use any AFCS in all land transport modes that accept cashless payments.

“With a centralized clearing house, DOTr can accredit multiple AFCS service providers and the cards will be interoperable across all modes of transport. This will be convenient for the commuters and will avoid a situation where a particular service provider monopolizes a particular service,” Libiran told the BusinessMirror.

The feasibility study is due this month. “After finalization, the project will be submitted to Neda for approval, then for loan processing and eventual implementation with Kexim,” Libiran added, referring to the National Economic and Development Authority.

Aside from this, the government is finalizing a so-called national standard for card readers, cards, and communications protocol.

The national standard will be vendor-neutral and vendor-interoperable, which will ensure that each certified provider will be able to process transactions regardless of the issuer.

“The NS will be published within October, and operationalized by December,” Libiran said.

To recall, the government institutionalized the use of cashless transactions for land transport systems to lessen the risk of spreading Covid-19 through human interaction. However, issues pertaining to the affordability of this relatively novel payments system surfaced a few weeks ago.

This led to the government’s issuance of a directive to the leading AFCS player, AF Payments Inc., to issue its tap-and-go cards, called beep, for free to commuters. Each beep card is currently sold at P80, a cost that is still subsidized by the private company.

Subsidize cards

As this developed, Move As One, a group of 134 organizations and 11,000 transport advocates, called on the government to subsidize the costs of providing commuters with beep or other stored value cards, which can be used for cashless fare payment in buses, rail lines, and eventually, all forms of public transport.

“We believe such subsidies are justified by the benefits of their widespread use to the health and convenience of the public, particularly lower-income people who have no alternative but to use public transport. We also call on the government to ensure inter-operability among the multiple cards already issued by different providers,” the coalition said.

Move As One noted that “there are potential sources of funds available” for the government to provide this subsidy.

“In 2020, a possible budget source is the President’s Contingent Fund; it can be tapped immediately, for example, to procure 1 million cards for P80 million. Because President Duterte supports subsidized card distribution, we believe that he would be willing to use resources from the President’s Contingent Fund. In 2021, there should be a budget for additional fare card procurement and distribution; the proposal of the Move As One Coalition is to include in DOTr’s budget an amount of P240 million for the purchase of 3 million cards in 2021,” it said.