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CTA's new Ventra fare payment system to allow customers to pay with debit, credit cards

Starting next summer, customers will have access to a new fare system on CTA and Pace: personal bank-issued debit and credit cards.

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CTA's new Ventra fare payment system to allow customers to pay with debit, credit cards

The Chicago Transit Authority announced on Thursday a new fare system for CTA and Pace, using personal bank-issued debit and credit cards.

The new system, dubbed Ventra, will come in the form of a debit/credit card equipped with a “contactless chip.” Much like Chicago Cards, the CTA said customers will need only tap their cards to board trains and buses. The system is expected to launch in the summer of 2013.

“Chicago will become the first major U.S. city to adopt an open fare system for transit,” said CTA President Forrest Claypool.

Customers will still be able to pay with cash to board buses, and the CTA said that eventually customers will be able to use mobile phones to pay for fares. The CTA and Pace will retain full control of their fare structures and will still offer discounted fares for 30- and 7-day passes, the CTA said in a statement.

According to the new site, there will be four payment options, one of which, will allow customers to use their own bank-issued debit cards to pay for transit. The Ventra Card itself, will function the way the Chicago Card Plus does. The Ventra Tickets will replace the magnetic stripe cards and can be used for a single ride or 1-day Ventra ticket, according to the site.

“We are eager to provide this new convenience to our customers because it modernizes our fare system using the latest technoglogy,” said Pace Executive Director T.J. Ross.

The ventrachicago site said the new debit cards will be issued by MetaBank, a savings bank located in Storm Lake, Iowa. MetaBank is a member of FDIC.

In 2011, Metabank was slapped by regulators for its iAdvance pre-paid debit card program. The Office of Thrift Supervision, which operates under the Treasury Department, said the company engaged in deceptive practices.

As part of a settlement, the company agreed to pay $5.2 million in refunds and fines over the program, which allowed customers payday and tax refund loans in the form of prepaid debit cards.

According to the Des Moines Register:

“The iAdvance program offered debit cards to customers and gave them the option of paying a fee to draw on the debit card even if they had no money left in their bank account. The fee would have been less than a conventional overdraft charge, and customers had to opt in to the program, but the federal Office of Thrift Supervision said the loans violated unfair or deceptive trade practice laws.”

The CTA said Ventra Cards and fare products will be sold at vending machines in rail stations and will be available at 2,500 retail locations in Chicago and the suburbs.

It remains to be seen if the new system will be implemented by Metra.

The rail service is in the process of meeting a state mandate that CTA, Pace and Metra all use the same fare system.

“We’re in the middle of that process right now, what we’re trying to do is identify the system that works best for Metra,” said Michael Gillis, a spokesman for Metra.

“There are some significant differences, they have closed systems and flat fare, where we have an open system and fares that are based on distance.”

Gillis said Metra has been in the loop on planned Ventra rollout.

In the announcement, the CTA also said that Cubic Transportation Systems will provide the fare collection equipment as well as maintenance and support when the system is live. Cubic received a $454 million contract in November 2011; Pace joined the contract in July 2012.

In this partnership, CTA and Pace will pay Cubic a monthly fee plus a fee per “tap” or fare.

As the system is rolled out, CTA said there will be simultaneous acceptance of both Chicago Cards and Chicago Card Plus alongside the Ventra system. In the first half of 2014, there will be a full switchover. Before that, CTA spokesman Brian Steele said “There will be a huge informational campaign, and part of the messaging will be to use the remaining balances [on their old cards].”

He said users without a compatible debit card can purchase the new Ventra Cards for $5, which they will have a $5 opening credit to use on the CTA.

“In a nutshell, we’re getting out of the banking business,” said Steele.

“People are paying us to give them media to use on our system. We had all the processes with taking in that payment,” he said.

“The open-fare system will save us $5 million a year, and we estimate $50 million a year over the 12-year contract,” Steele said.

Cubic will be tasked with upgrading and maintaining the fare-collection equipment, which the agency said is “nearing the end of its useful life.”

The CTA said the new Ventra machines — as well as touchpads on buses and turnstyles — will be installed at rail stations starting in October, but won’t be operational until the pilot tests begin in spring of 2013.

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