Contents - SPAD

The „Touch‟n Go‟ system which is a prepaid „smartcard‟ for transport payments such as tolls and
parking has been extended to local LPT. The cards offer users the ability to prepay for travel prior to
boarding the bus. Currently this system is only available for RapidKL services. Part of the on-going
NKRA initiative is to „establish a single cashless mode of payment across all land LPT operators building
upon the Touch‟n Go platform with the potential to introduce an integrated travel fare across all
operators and modes thereafter‟. The aim therefore is to increase use of the system to include KTM
and other bus operators. At present the card is in effect a single operator card. More universal
availability will require the participation of all operators. This raises complex issues of revenue
apportionment with four main dimensions:
Apportionment of revenue collected by operators, unless it remains “where it falls” – an
arrangement likely to favour the larger operators
Apportionment of revenue from tickets sold by ticket agents such as retail outlets
Allocation of costs and commission to agents
How to share the costs of any discounts offered to passengers for multiple pre-purchase of
trips
The availability of inter-operator tickets however is consistent with a multi-mode and multioperator
situation. There are many examples of such tickets in conurbations with route group or
area based franchising whereby a company has been incorporated to handle the redistribution of
revenue. In UK there are long established arrangements in the areas outside London where bus
services operate on a deregulated basis and many cities in mainland Europe where bus services are
provided through franchises or concessions.
Whilst the introduction of pre-purchased stored value cards has afforded the operators real
benefits such dwell times at bus stops, reduced driver cash handling and consequent fraud, there is
still a general concern that owing to the lowest top-up value being set at RM1.00, the card does not
serve the purpose of encouraging pre-purchase for which it was designed. There appears to be
scope for increasing the lowest fare value by which the card can be topped up and possibly offering
a discount for travel when the card is topped up with a value in excess of a specified amount, for
example RM20.
It is important to highlight that „cash fare‟ collection is still widespread, and that take-up for the
prepaid card on buses is deemed to be low. International experience suggests that higher level of
discount on prepaid tickets (or a premium on cash payment), or some other device such as no
change given on the bus, is needed to promote higher levels of prepaid cards take-up. It would
also be appropriate to consider the ticket types or ticket formats targeted to particular market
segments. A very successful campaign aimed at young people some years ago in Hong Kong
involved a popular brand of digital wristwatch capable of holding stored value and that admission
to the bus, tram or MRT required the watch to be swiped on a reader.
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