Q&A with Troy Bernard at Discover Global Network

tap, Discover card, transit, bus, man

Troy Bernard provides insight on the importance of accepting contactless payments from Discover^® Global Network in open loop transit systems. He shares how accepting contactless credit and debit cards with Discover Global Network can reduce operating cost and provide a better the rider experience. Based on recent transit agency survey, Troy shares latest trends in open loop payments, and options to create an inclusive transit payment solution for all riders.

Why is it important to accept Discover when deploying open-loop payments, and how does it improve the customer experience?

In a recent Discover Global Network survey of ~100 transit professionals, of those transit agencies who have adopted open-loop payments, 95% say that open-loop is a more efficient way to pay and 90% say that it improves the rider experience¹. If agencies want to capitalize on these benefits of open-loop payment acceptance, they must accept the cards that their riders carry the most. 

Discover Global Network is the fastest growing payments network in the world². We have over 305 million cardholders spending over $550 billion USD worldwide². In addition to the network brands that we own, Discover and Diners Club International^®, we have alliances with over 25 other global and domestic payment networks to enable their cards across our merchant footprint.    

So, as agencies work to improve the rider experience by allowing them to pay as they choose to pay for all of their other everyday expenses, Discover and Diners Club acceptance is a must-have requirement, from my point of view. In their procurement RFPs, I recommend that agencies include requirements that any open-loop fare collections suppliers must support acceptance across all six of the global card networks and any domestic card networks that may operate in their country.   

How does using a credit/ debit card improve security for agencies, as well as riders?

For a transit agency, accepting open-loop credit, debit and prepaid cards significantly mitigates the agency’s risk in the following ways:

• Reduced cash handling and outsourcing of card issuance: as an issuer of proprietary pre-paid transit cards, agencies must collect fares through cash or card payment. This creates costs in hiring staff to collect fares or purchasing expensive fare collection machines. They must purchase plastic cards, store them and issue them to customers. Any cash collected by the agency is at risk to theft. Most or all of these expenses and risks are transferred away from the transit agency when they accept open-loop cards
• Lost/ stolen/ fraud liability: when a prepaid card issued by the transit agency is lost, stolen or experiences a fraud event, either the agency or the customer is liable. Again, the agency can significantly reduce or eliminate these risks by outsourcing card issuance to banks
• Leveraging payment networks’ and issuers’ security technology: Global Payment Networks and Issuers see billions of transactions per year across many merchants, and they have systems and products designed to help detect and prevent against fraudulent transactions. Transit agencies can take advantage of these investments and learnings when they accept open payment devices.

What payment options does Discover offer for the unbanked, underbanked or for those wishing to remain anonymous?

We have two product offerings for this market. 

First, is through prepaid card issuers. These are cards that you may purchase from a retailer or online. The customer loads funds onto the card, and in some cases can load that prepaid card into their favourite mobile wallet. Anywhere that they see the Discover acceptance mark, they can pay, including transit.

Second, is a product that we offer directly to transit agencies or their integrators. Discover understands that customer choice is paramount and transit agencies must serve their banked and unbanked riders. For unbanked card issuance, we offer agencies a license to our D-PAS technology so that they may use a common EMV-based platform for all of their contactless fare collection needs. This reduces technology complexity and allows agencies to purchase cards from a wide range of D-PAS certified card manufacturers from around the world. 

As a payments service provider, what payment trends have been observed at transit agencies where open-loop payments are deployed?

One significant trend observed at transit agencies where open-loop acceptance has been deployed is, since 2020 where there was minimal contactless payments activity in transit, today, over 65% of all Discover Global Network transit transactions are made using a contactless payment device (card, phone or wearable)². Of that 65%, nearly three quarters of those contactless payments are made using a phone or a wearable². So, our cardholders appear to be telling us that they prefer to pay for transit using their mobile devices. 

Are Discover Global Network contactless cards accepted at transit agencies around the world?

Yes, the rate of agency adoption of our contactless cards has grown significantly over the past two years, globally. Today, we’re approaching nearly 100 agencies that accept our contactless payment devices. Territories to note are the U.S., Japan, Hong Kong, Spain, Turkey and Poland. 

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