Citi Will Issue Contactless Tokens for N.Y. Mass Transit Test This Spring

Citigroup Inc.'s Citibank, which last year announced it would issue contactless tokens linked to customers' credit and debit card accounts in the New York metropolitan area, is now allowing those devices to be used in a test of radio-frequency-based electronic fare payments by the Metropolitan Transit Authority's MTA New York City Transit agency. The test, set to begin in the spring, will run for six months and will embrace 25 subway stations on the Lexington Avenue Line, which runs through Manhattan, Brooklyn, and Queens. The bank will not disclose how many contactless devices will be involved in the pilot. In the pilot, commuters will tap a token (or “tag,” as Citi calls them) or card equipped with a chip-and-antenna inlay on an RFID reader attached to a turnstile. The turnstiles will bear markings to let users know which ones are equipped for contactless payment. The Citi cards and tags, which will link to either credit or debit accounts and will operate on MasterCard International's PayPass RFID platform, will also work as contactless payment devices at merchant locations that accept PayPass. Citibank last summer said it would issue keychain fobs linked to its credit and signature-debit accounts to customers in the New York metropolitan area as part of a rollout of the technology that called for the bank to issue some 2.5 million of the devices (Digital Transactons News, Aug. 24, 2005). It was one of several announcements last year by major banks indicating involvement in the burgeoning contactless-payment trend, and was the first involving a form factor other than cards. With contactless payments, payment devices transmit account data to nearby readers via radio waves in a process that replaces the conventional card swipe, speeding up transactions and allowing card-based payment in high-throughput venues.