An article in today’s NZ Herald confirms that HOP cards will need to be changed over later this year to the new Thales system, enabling them to work on all buses, trains and ferries.

Auckland’s “integrated” public transport cards, introduced in May with a $1 million marketing budget from the public purse, will have to be replaced because they are not compatible with a new system for trains, ferries and some bus companies.

More than 93,000 electronic Hop cards, supplied by Snapper, are in use – but they work only on NZ Bus services.

NZ Bus and Snapper – which was beaten in 2009 by French electronics and military technology giant Thales to an $87 million supply and operating contract for an Auckland region-wide integrated ticketing scheme – are owned by Wellington-based investment company Infratil.

From the middle of this year, the Hop cards will have to be replaced at an undisclosed cost to Auckland Transport by upgraded versions suitable for all forms of public transport using the Thales system.

These include trains, ferries and bus services such as Northern Express operator Ritchies Transport, Howick and Eastern, Birkenhead Transport, Urban Express and Bayes Coachlines.

This issue has been brewing for almost a year now, since HOP was first launched, and is the result of a pretty complex number of factors – stretching back a number of additional years and related to Snapper’s role in the whole integrated ticketing project. Effectively, when Thales won the contract to provide the integrated ticketing system for Auckland, Snapper were pretty grumpy about the whole thing and as their owner (Infratil) also owned NZ Bus, a deal between the two was stitched up that would introduce the Snapper Card onto NZ Bus services in advance of Thales’s system being rolled out.

The charitable side of me notes that NZ Bus’s old ticketing machinery was no longer supported, and the machines were breaking down on a very regular basis. The cynical side of me thinks that the whole process was just Snapper trying to ‘throw a spanner in the works’. In any case, a compromise deal was struck whereby Auckland would see Snapper Cards introduced on NZ Bus services, but rebranded to look like HOP cards. I think all parties hoped that the technology would evolve to enable those HOP/Snapper Cards to be useable on the Thales system once that was up and running – thereby avoiding the need for a card-swap – but that hasn’t happened.

I think it’s a bit mean to beat up Auckland Transport for their role in all of this. When NZ Bus decided to go with Snapper, this put AT in an incredibly challenging situation of having another card launch a few months in advance of something they’d been working on for years, stealing their thunder and really muddying the waters when it came to brand recognition of the card. So I can understand why AT went down the path they did last year, launching the HOP brand as soon as they could, even if technically it was on a Snapper Card rather than a “proper” HOP card. I have spoken to those involved in the technical side of things and there was (and remains to an extent) a belief that the Snapper Card “could” become compatible with the Thales system to the required extent to make it work. But it’s just taking too long and AT have understandably decided they can’t wait any longer and will go with the card swap option instead.

Theoretically, the ‘swap you HOP’ process should be pretty painless. Unlike the switch-over from GO Rider to HOP, it seems likely that there will be a period when the machines on the bus accept both HOP/Snapper and real HOP cards – enabling the simple swapover of cards when your HOP/Snapper card runs out of credit. I think it’d be a good idea for the cards to look different too (and not just through the removal of the Snapper logo) to avoid confusion.

In the end, it seems that the only real loser out of this becomes Snapper. While it remains to be seen whether people get to keep their HOP/Snapper cards and still get a new “proper HOP” card for free, Snapper is getting squeezed out of both things it does: Thales kicking it out of the public transport side of their business (aside from the card readers on the bus) and a new generation of bank/credit cards with contactless operation starting to squeeze them out of the retail side of the business.

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  1. Its not charitable, NZBus want people using their system. Thats how they make money. No doubt their actions resulted in delays to the implementation of the proper system as time was spent trying to make them compatible. Meanwhile all those taking public transport, especially non NZ Bus services suffer.

  2. “it seems likely that there will be a period when the machines on the bus accept both HOP/Snapper and real HOP cards”
    If it were that easy you would not need to change cards at all. I suspect that the real HOP will be a different machine and perhaps, for a while, there will be one of each on the busses that have the game spoiling Snapper ones already.

    1. There are three components to the system:

      1) The card
      2) The reader
      3) The back-office “system”

      The Thales card is compatible with the Snapper reader, as long as it links with the Thales system. We know this because the “A-Pass” worked during the world cup. Obviously the Snapper Card works with the Snapper system through the Snapper reader. The problem is when the card doesn’t match the system. I assume, as was done during RWC, that the Snapper system and the Thales system can operate side-by-side – although that’s not a long-term viable option.

    2. No they will work together and already have. My understanding is that before it was rolled out last year Snapper had to prove that their machines would work with the standards that HOP is based on which it did and it is the cards themselves that wouldn’t work. During the RWC there was a special travel card based on the Thales system that gave all day free travel and it worked even though everyone else getting on the bus used Snapper (or so we were told).

  3. Here is my prediction for the future of Snapper:

    My understanding is that Snapper’s business case when they launched in Wellington largely revolved them also getting into the Auckland Market which is probably why they fought so hard for it after the decision had been made. With credit card companies now moving into the contactless space they will also be squeezed out of the payments market. After Auckland has finished rolling out HOP and all of the issues are worked out the Greater Wellington Regional Council will start down the same process, after all part of the reason the NZTA brought the system in the first place was so it could be rolled out to other regions. At that point the GRWC will want to control the system so Snapper will start to be squeezed out there and as such I think they will sell the Snapper brand to the council for use on the entire Wellington system and will only stay around as a supplier of ticketing machines to NZ Bus and any other company that they can sell to (which would probably be easier to get more customers of them if they aren’t competing in the ticketing space).

    1. The otehr companies dont want to Snapper to be the system as (1) it would give Snapper (ie. NZ Bus) all their fare statistics which could be used against them in tenders and (2) Snapper gets teh benefit of the large pile of cash from all the prepaid fares.

      I agree that the writing is on the wall for Snapper so what IFT should have done is sell Snapper to NZTA. That way we would have had a NZ wide system implemented a year ago at least.

      1. Snapper is two things, one is the system behind the scenes and the other is the actual readers themselves which they supplied. I’m suggesting that if they dropped the back end system and just became a supplier of readers and cards that met the specs then the other companies wouldn’t object to using them so much. To late in Auckland but not in other cities. I think the value in Snapper is in the name, not the technology behind it which is why it would be useful for Wellington to make it their smart card brand.

        Also why would the NZTA buy the Snapper system and brand when they were already buying the Thales system? The reason Snapper wasn’t chosen in the first place is that it is an inferior product so that would it wouldn’t have done anything to speed up the rollout.

        1. I meant use Snapper instead of the Thales system.

          Inferior system – you may be right but it is up and running and doesn’t appear to have any issues. Thales system is over 2 years in the making and we don’t know if it will actually work. I also understand it is more expensive.

        2. Snapper isn’t really anything more than a cash balance on a card and can’t do real integrated ticketing like we need, it also wasn’t up and running like it is now all in one go. Yes the Thales system is more expensive, in fact Snapper offered their system for free but the catch was that they would own the float (all of the cash balances on the cards) and they would have used that to earn interest and help fund their other activities. With the Thales system AT will own the float for Hop cards and over time that actually works out better for the region.

      2. Yes the Thales system is more expensive, in fact Snapper offered their system for free but the catch was that they would own the float (all of the cash balances on the cards) and they would have used that to earn interest and help fund their other activities. With the Thales system AT will own the float for Hop cards and over time that actually works out better for the region.

        The cash issue has been the problem all along. Years ago, I was told by someone in the old ARTNL that there was real opposition to integrated ticketing [at that stage] from nearly all the bus operators because ARTNL would hold the float. I still wonder how much the planning agency(ies) understand the commercial realities facing the bus companies, in particular.

  4. What will be really interesting is whether you will be able to keep your HOP/Snapper card when you trade it in for the HOP/Thales Card. Auckland Transport might be quite keen to get the HOP/Snapper cards out of circulation to avoid confusion with the HOP/Thales cards…

    …but in that scenario Snapper sees 93,000 of “their” (interesting question of who actually owns the HOP/Snapper card comes up) cards go out of circulation. Which completely kills the last bit of business they would be able to do with them: retail purchases.

    Geez, if I had shares in Snapper I’d totally be selling them right about now. Their future business prospects are screwed.

  5. I think it was a mistake for Auckland Transport to brand the Snapper card as Hop when it was clearly so limited – for instance it doesn’t do monthly passes which is why punters are still stuck with the “visual” monthlies one year on. But it is all history now. AT really need to start designing how transfers will work and what the new zone system will be, and get the operators on board. Put “integrated” back into the Auckland Integrated Fares System.

    1. Surely if AT were actually interested in rolling out “integrated ticketing” (rather than smart-card ticketing) as quickly as possible they would have just extended the Northern Pass across all of Auckland?

    2. I doubt Snapper is as dumb as everybody is making out. I would bet that snapper wanted people to have cash balances on there cards so they can make money out of retail transactions. I think also that the roll out was done slowly to avoid the risk of a major incident.

      1. I don’t think that the people running Snapper are dumb, not at all. I think that they saw a potential market which was there at the time and they tried to make a business out of it and that business definitely relied on micropayments. In fact I would go as far as to say that the PT component was probably a bit of a loss leader to get the card into peoples hand as that is probably the hardest part.

        Unfortunately for them get couldn’t really implement their plan as they had hoped and as a result the business doesn’t seem to be as viable as it once was. Like any business in that situation, they will want to get as much out of it as possible.

  6. snapper card will be phased out from market. their only lifeline is NXP producing desfire and jcop capable cards which is months away.failing to get that means snapper jcop card is dead. but this wont happen overnight as its pictured. ackland transport will disagree but nobody is in a position to integrate all services. a total chaotic situation it is now -if insider info can be trusted. with recent resignations announced, project will be running awol !

    snapper cannot put monthly passes now, but in future they can. transport ppl r pushing them to make it happen. snapper’s small payment is dead. retailers are leaving contracts -not worth it as they say.

    other bus companies already is with parkeon. they only have capex where snapper system has opex based on transactions. which will survive in future? go figure!

    1. A small correction – Snapper can do monthly (or rather 30-day) passes now. Such passes have been available in Wellington for a couple of years now (initially just on Runcimans, now on all NZ Bus services). Snapper can also free transfers etc, as it does in the Hutt Valley.

      It’s actually capable of being much more than an electronic purse, but sadly NZ Bus lacks the imagination to take advantage of that.

      1. They can only do monthlies if the stage boundaries and the fare boundaries are the same.
        Yes it can do transfers which is why it is frustrating that it isn’t enabled on inner and outer link transfers, or 020 to Link for that matter.

  7. Can anyone confirm that the planed ‘new’ HOP card system still to be introduced will be a truly intragated ticket system with zones and not just a prepay card utilising the existing stages to calculate fares. I haven’t heard anything official to confirm this though that is what everyone assumes/expects to be implemented.

    1. As Pete says below it has been made clear that the roll out will be staged. I have heard that it is international best practice not to introduce a new payment system at the same time as new fare’s policy.

      As such it seems likely that the new hop card will be a prepay cash card for its first year at least. This minimizes the risk of project failure.

      We do know however that the system is fully capable of zonal fare’s systems, transfer discounts, time based charging etc. This means that Auckland Transport can implement new fare’s policy to the hop card once they are confident that the hop card is mature and teething issues have been ironed out (if they choose to do so). I think zonal fair policy is incompatible with the service contracts on many routes (any not gross contracted). We may need to wait out some bus contracts before zonal fare policy can be implemented. Don’t hold your breath for any rapid progress.

  8. I am close friends with a retail store manager who has a contract with Snapper and I can say that for him, the quicker they’re out of town the better. Firstly, they charge for the use of their terminals and with the miniscule profit margin of 20 cents per top up it is not easy to merely break even on a monthly basis, so basically I know a lot of retailers who are running it at a loss. Hence, the number of them opting out of contracts with Snapper. He tells me he senses the fact that Snapper knew the jig was up for them some time ago and now just want to squeeze all the money they could out of it whilst in control of the HOP cards.

    As a PT user myself I echo the choir hoping for actual integration with zoning across the entire network. I guess we shall see, however I will give them credit regardless as integrating all ferries, bus providers and trains to one payment source is definitely a step in the right direction.

  9. AT have talked in past about a staged introduction of integrated ticketing along the lines of international best practise. So why they have not already rolled out a paper based version of the northern pass across Auckland for example is beyond me.

    It would get the users of the system use to which ever structure they intend to use, make transfers a integral part of system and reduce the silly amount of ticket types out there. AT are you listening?

  10. isnt this the problem we see with so many things that relates to transport. vested interests with political clout.
    Infratils company got to do this HOP card that at best is restrictive but really is more likely to be called halfhearted by most of us. Infratil has great connection in New Zealand and just like Fletcher Building makes construction extremly expensive in this country infratil uses its clout to push inferior solutions.
    Infratil has never been specialists at cardtechnoilogy and should never have been allowed close to that deal.
    Another example. We bought Dennis buses. Great they were the worst product on offer, virtually rejected by the rest of the world, but there was a good connection and its easy to deal with people speaking English.

    On another note.
    I dont see why the HOP card costs as much as it does either. Thats just a very annoying fee and I know 6 people that just because of that fee refuse to get out of their cars. Its just on principle not ok to charge a fee that allows people to buy monthly passes. Its just plain wrong.
    In almost all other places were there is a fee for the cards, such fee is given back when the card is returned.

  11. I’m new to this topic but one thing I can’t understand is how the comments above seem quite NZ innovation negative (Snapper) versus French military (Thales). Surely it would be useful to have homegrown contactless payment & integrated ticketing expertise – would aid development of national standard and then maybe they could then export their technology for overall net benefit to economy?

    1. There is nothing ‘NZ innovative’ about Snapper vis Thales. Snapper is simply a Korean product licenscd by Infratil and with data handled in Korea under contract.

      One of the reasons Thales was selected over Snapper is that NZTA wanted the whole system and data handled here in New Zeland, as it plans to make a single standard system for the whole country. Another issue is that Snapper is owned by NZBus parent Infratil, which means that NZBus would be in charge of processing all the fares and payments for every transport operator using the card (which should ideally be all of them). There is one issue with Snapper having all their competitors fare information, and another will allowing Snapper to charge them for the privilege of collecting fares.

      Snapper is not so much a ticketing system as a contactless alternative to eftpos. Infratil’s strategy was to use public transport as a loss leader to get the cards in peoples pockets, but to make the real money on transaction fees for purchaces in dairies and gas stations and the like.

      The negativity over Snapper is due to the fact they lost the tender fairly, went back to fight the decision in court and lost that, then decided to install Snapper on all NZBus services anyway in an attempt to win the defacto tender through market share and still failed. At every point of the process they have done everything they can to block or undermine the rollout of the system that won the integrated ticketing tender.

  12. All the technology talk is interesting, especially when you factor in the spending of public money on marketing and promotion (or how redundant and farcical that notion is).
    But what Auckland public transport desperately requires is a massive dose of user-centric design and thinking. Why not choose/build a system that gives a crap about the user experience? That makes using and paying for public transport _easy_. Revolutionary thinking? Or plainly obvious?

  13. Thanks for the background Nick. I know it is water under the bridge but couldn’t Infratil have:

    1. Spun off Snapper as an independent company and so separate from NZ Bus
    2. Localised the solution to NZ – yes with some residual license fee to Korea.

    Still seems to me it would be good to have the implementation & integration handled locally which at least raises the chance of establishing a skill base that innovative managers could leverage.

  14. Bob

    You’re pretty much correct in what the current situation is

    1. Snapper is owned by Infratil and independent of NZBus – there are separate Boards, Management teams and premises.

    2. Snapper is very much localised to NZ – Snapper is a fully integrated ticketing and payment system that complies with the current ratified versions of the NZ National Integrated Ticketing Interoperability standards. In effect, the system performs the functions for ticketing specified by AT. We’ve been pleased to be working with AT and NZBus to be part of the original HOP launch and more recently with Thales to support the A-Pass that was released for tourists during the RWC.

    In terms of other local innovations, we’ve done the following

    – Retail integration (that allows top-up and using your Snapper to pay in retailers and taxis) is locally developed and integrated with EFTPOS NZ and Smartpay
    – Cards are manufactured here in NZ by ABNote
    – We’ve developed an on-line top-up service (MySnapper) that provides for instant top-ups using smart-card readers
    – We’ve integrated building access into the cards to allow corporates to provide staff ID, building access and PT to their employees
    – The back end of the Snapper website provides the tools that both Snapper and AT staff use for resolving customer queries.

    There’s plenty more but these provide a snapshot of how we are using local talent to implement, extend and integrate the system while still using the scale that Korea provides.



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