ENCORE: Lesson from MetroCard

They got me … too!

This is not a warning; this is an applause!

Even after describing the MetroCard program’s propensity for retaining unused balances – in the ENCORE below – this writer ends up stuck with 2 active MetroCards with outstanding balances.

Rather than feeling suckered, I feel impressed. (It means “free” cash from the idle balances).

See the story from August 20, 2014 again here, how the MetroCard program always ends up divesting leftover balances. (Note: The all-electronic payment scheme does allow for refunds, using an Old World, snail-mail process with self-addressed-pre-stamped envelopes). Also see the VIDEO in the new Appendix below on how to purchase a MetroCard.


Go Lean Commentary: MetroCard – Model for the Caribbean Dollar

CU Blog - MetroCard - Model for CCB - Photo 1The MetroCard, the New York City Metropolitan Transportation Authority’s (MTA) payment system is the subject of the referenced source appendix below. But this subject is about more than just simple bus/subway tokens, instead this subject refers to a whole eco-system that constitutes an electronic payment scheme. This system generates $4 billion (2012) and services the transit needs of 15.1 million people. The MTA drives the NYC regional economy, the largest in the US, facilitating the connection for many to traverse from home to work; then after work, the MTA network enables the NYC metropolitan area (New York, New Jersey, and Connecticut) to get to a host of leisure activities: music, theater, cultural events, sports, and shopping. MetroCard is therefore a de facto currency for this region to live, work and play.

MetroCard is a digital currency and not “hard money”, so there are not paper stock or coinage issues to be managed with this approach. (MetroCard replaced the previous ubiquitous tokens in 2003). This attribute relates to the effort to re-boot and optimize the Caribbean regional economy and society. The book Go Lean…Caribbean points to NYC as a model and source of many lessons that the Caribbean can learn and apply, especially related to the adoption of the regional currency, the Caribbean Dollar (C$).

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU) and the Caribbean Central Bank (CCB). This Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The Caribbean Central Bank has the role of heavy-lifting in the facilitation of the electronic payments modes of the Caribbean Dollar. While the traditional central banking role of currency/coinage distribution do not come into play, with the e-Payment schemes, there are still many responsibilities and benefits for central bank command-and-control. This refers to the subject of M1 monetary supply. M1 refers to the measurement of the total of currency/money in circulation (M0) plus overnight bank deposits (like demand deposits, travelers’ checks & other checkable deposits). So when digit currencies, as MetroCard, are factored in, there is no M0, but an increase in M1. As M1 values increase, there is a dynamic in the regional banking system that creates money “from thin-air”; this is referred to as the money multiplier. The more M1 money in the system, the more liquidity for investment and development opportunities.

The Caribbean needs this increase in development capital/liquidity.

This subject of electronic payment systems has been previously covered in Go Lean blogs, highlighted here in the following samples:

http://www.goleancaribbean.com/blog/?p=1350 PayPal expands payment services to 10 markets
http://www.goleancaribbean.com/blog/?p=906 Bitcoin needs regulatory framework to change ‘risky’ image
http://www.goleancaribbean.com/blog/?p=528 Facebook plans to provide mobile payment services
http://www.goleancaribbean.com/blog/?p=360 How to Create Money from Thin Air

This Go Lean/CU/CCB roadmap looks to employ electronic payments / virtual money schemes to impact the growth of the regional economy. There are two CU schemes that relate to this MetroCard structure:

  • Cruise Passenger Smartcards – The Go Lean roadmap posits that the cruise industry needs the Caribbean more than the Caribbean needs the industry. But the cruise lines have embedded rules/regulations designed to maximize their revenues at the expense of the port-side establishments. The CU solution is to deploy a scheme for smartcards that function on the ships and at the port cities (Page 193).
  • e-Commerce Facilitation – The Go Lean roadmap defines that the Caribbean Dollar (C$) will be mostly cashless, an accounting currency. So the Caribbean Central Bank (CCB) will settle all C$ electronic transactions (MasterCard-Visa style or ACH style) and charge interchange/clearance fees (Page 198). This scheme allows for the emergence of full-throttle e-Commerce activities.

Overall, stewardship of the single market economy and single regional currency was envisioned and pronounced early in the Go Lean roadmap with this Verse XXIV (Page 13) of the Declaration of Interdependence, with these words:

Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles…

New York City is a great model for this Caribbean empowerment effort to look, listen, and learn. The same as tourism is the primary economic driver in the Caribbean (80 million visitors), NYC also plays host to 25 million visitors annually. Many NYC tourists ride the MTA public transportation modes and have to acquire a MetroCard – many times, they leave unspent balances  to just sit there. What becomes of those monies? See this news article here:

Unspent MetroCard Money Means Millions for M.T.A.


Think of it as New York’s biggest sock drawer, except that instead of nickels, dimes and quarters, what is squirreled away in its dark recesses are millions of lapsed yellow-and-blue MetroCards with digital loose change still dangling from their magnetic strips.

In the decade ending in 2010, nearly $500 million worth of unspent balances on expired bus and subway MetroCards accumulated, and that money can no longer be redeemed.

Cards that are bought, never used but still valid are counted for bookkeeping purposes as a liability, because they might eventually be used. Outdated cards with pending balances become an asset after they expire, about two years from the date of sale. The balances are listed as revenue under the category of “fare media liability.”

Tens of millions of dollars a year may not seem like much out of $4 billion in annual MetroCard revenue for New York City Transit, but there is no stream of cash that the agency scoffs at.

Kevin Ortiz, a spokesman for the Metropolitan Transportation Authority, which includes the transit agency, said: “Expired card value does benefit the M.T.A. It gets counted as fare box revenue.”

The peak year for replenishing New York City Transit’s fare media liability account was 2012, when $95 million was credited. That followed a surge in purchases in 2010, before a fare increase. Those cards, many presumably with outstanding balances, have expired.

Considering the governance for the MetroCard, the MTA has been described with some adjectives of efficiency and effectiveness. Their website described their charter as follows:

While nearly 85 percent of the nation’s workers need automobiles to get to their jobs, four of every five rush-hour commuters to New York City’s central business districts avoid traffic congestion by taking transit service – most of it operated by the MTA. MTA customers travel on America’s largest bus fleet and on more subway and rail cars than all the rest of the country’s subways and commuter railroads combined.

This mobility helps ensure New York’s place as a world center of finance, commerce, culture, and entertainment, and New York ranks near the top among the nation’s best cities for business, Fortune magazine has written, because it has “what every city desires. A workable mass transit system.”

MTA mass transit helps New Yorkers avoid about 17 million metric tons of pollutants while emitting only 2 million metric tons, making it perhaps the single biggest source of greenhouse gas (GHG) avoidance in the United   States. The people living in our service area lead carbon-efficient lives, making New   York the most carbon-efficient state in the nation.

Over the past two decades, the MTA has committed some $72 billion to restore and improve the network so that today it runs at unprecedented levels of efficiency. Our employees at all of our agencies work diligently to maintain high service and safety standards.

(Source: Retrieved August 19, 2014 from: http://web.mta.info//mta/network.htm)

The governance for the MetroCard may be in good hands, a technocratic reflection. Creating a technocratic CU/CCB governance is “Step One, Day One” in the Go Lean roadmap. Implementing this allows for rock-solid monetary integrity for local financial systems, providing the foundation so the regional society can be elevated, economically and governmentally. In this vein, we examine specific lessons & applications in consideration of the MetroCard business model in the Appendix below:

MetroCard Facts Go Lean book considerations/reflections (actual Page Numbers)
MetroCard History Roadmap with Project Delivery Obligations (Page 109); Fostering a Technocracy (Page 64)
Multiple Jurisdictions Confederation of 30 Member-States (Page 45); Fostering Interstate Commerce (Page 129)
Pricing/Cost Increases Unified Command & Control on Inflation (Page 153)
Technology Foster Technology (Page 197); e-Commerce (Page 198); Bridging Digital Divide (Page 31)
Transfers People respond to economic incentives (Page 21)
Card type consideration –   Pay-Per-Ride cards Improve M1 by encouraging stored balances (Page 198)
Card type consideration – Student cards Facilitation Education (Page 159) and Transportation (Page 205)
Card type consideration –   Disabled/Senior Citizens Improve Elder-Care (Page 225) and Impact Persons with Disabilities (Page 228)
Purchase Options – Subway Station   Booths Manage Federal Civil Servants (Page 173)
Purchase Options – Vending   Machines Foster Technology (Page 197); e-Commerce (Page 198); Bridging Digital Divide (Page 31)
Purchase Options – Neighborhood   Merchants Help Entrepreneurship (Page 28); Impact Main Street (Page 201);
Future Impact the Future (Page 26)
Bad Actors: Fraud/Scams Bad Actors Emerge – Reduce Crime (Page 178); Impact the Greater Good (Page 37)

The Go Lean book details additional community ethos, strategies, tactics, implementations and advocacies to foster electronic payment systems, and the unified command & control necessary for its success:

Community Ethos – Money Multiplier Principle Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Cooperatives Page 25
Tactical – Separation of Powers – Central Banking Page 73
Implementation – Assemble Central Bank Cooperative Page 96
Planning – Lessons Learned from New York City Page 137
Anecdote – Caribbean Currencies Page 149
Advocacy – Ways to Mitigate Black Markets Page 165
Advocacy – Ways to Impact Public Works Page 175
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Impact Urban Living Page 234
Appendix – New York City Economy Details Page 277

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the empowerments described in the book Go Lean … Caribbean. We can all benefit by studying and modeling the successes of New York City!

Any visitor to the city quickly realizes how unique this jurisdiction is compared to other urban areas in the US, or the world for that matter. Millions of people (31,483,000 according to 2010 census) live in a limited congested area that is the Greater Tri-State area, yet there is a recognizable level of efficiency – some technocratic deliveries. For example, NYC does not have the proliferation of yellow school buses that dot the landscape of most American communities. Most students in the city rely on the MTA, funded by their MetroCard, to get back and forth for school. So in effect, MetroCard services the full community needs to live, work, learn and play.

MetroCard is truly a model for the Caribbean … Dollar.

Download the book Go Lean … Caribbean – now!


Appendix – Reference Source:

MetroCard – New York Metropolitan Transportation Authority’s Payment System

The MetroCard is the payment method for the New York City Subway rapid transit system; New York City Transit buses, including routes operated by Atlantic Express under contract to the Metropolitan Transportation Authority (MTA); MTA Bus, and Nassau Inter-County Express systems; the PATH subway system (an entity of the Port Authority of New York & New Jersey); the Roosevelt Island Tram; AirTrain JFK; and Westchester County’s Bee-Line Bus System.

The MetroCard is a thin, plastic card on which the customer electronically loads fares. It was introduced to enhance the technology of the transit system and eliminate the burden of carrying and collecting tokens. The MTA discontinued the use of tokens in the subway on May 3, 2003, and on buses on December 31, 2003. The MetroCard is managed by a division of the MTA known as MetroCard Operations and manufactured by Cubic Transportation Systems, Inc.


01Jun1993 MTA distributes 3,000 MetroCards in the first major test of the technology for the entire subway system and the entire bus system.
06Jan1994 MetroCard live testing with compatible turnstiles at select lines and stations.
15May1997 The last MetroCard turnstiles were installed by this date, and the entire bus and subway system accepted MetroCards
04Jul1997 First free transfers available between bus and subway at any location with MetroCard.
01Jan1998 Bonus free rides (10% of the purchase amount) were given for purchases of $15 or more.
04Jul1998 Unlimited Ride MetroCards introduced, at $17 for 7 days, $63 for 30 days, Express Bus Plus for $120.
01Jan1999 1-Day Fun Pass was introduced: unlimited use for one day for $4.
25Jan1999 The first MetroCard Vending Machines installed.
13Apr2003 Tokens/coins no longer sold.
04May2003 Tokens only accepted as a $1.50 credit towards the $2 MetroCard ride.
02Mar2008 A new 14-day unlimited-ride was introduced for $47
30Dec2010 1-Day Fun Pass and the 14-Day Unlimited Ride MetroCards discontinued.
20Feb2013 Cards can now be refilled with both time and value.
03Mar2013 A $1 fee is imposed on new card purchases in-system

Pricing/Cost increases – since the complete cut-over in 2003






























During a swipe, the MetroCard is read, re-written to, then check-read to verify correct encoding.

Each MetroCard stored value card is assigned a unique, permanent ten-digit serial number when it is manufactured. The value is stored magnetically on the card itself, while the card’s transaction history is held centrally in the Automated Fare Collection (AFC) Database.

When a card is purchased and fares are loaded onto it, the MetroCard Vending Machine or station agent’s computer stores the amount of the purchase onto the card and updates the database, identifying the card by its serial number. Whenever the card is swiped at a turnstile, the value of the card is read, the new value is written, the customer is let through, and then the central database is updated with the new transaction as soon as possible. Cards are not validated in real time against the database when swiped to pay the fare. The AFC Database is necessary to maintain transaction records to track a card if needed. It has actually been used to acquit criminal suspects by placing them away from the scene of a crime. The database also stores a list of MetroCards that have been invalidated for various reasons (such as lost or stolen student or unlimited monthly cards), and it distributes the list to turnstiles in order to deny access to a revoked card.

MetroCard keeps track of the number of swipes at a location in order to allow those same number of people to transfer at a subsequent location, if applicable. The MetroCard system was designed to ensure backward compatibility, which allowed a smooth transition from the old (blue) format to the (gold) format.

Cubic later on used the proprietary MetroCard platform to create the Chicago Card, which is physically identical to the MetroCard except for the labeling.


MetroCards allows for transfers (within two hours of initial entry) among the many transportation modes – incentivizing a preferred behavior. (Pricing rules are built into the system for upgrades like Express Buses, PATH, and JFK Airport AirTrain).

One free transfer from:

  • subway to local bus
  • bus to subway
  • bus to local bus
  • express bus to express bus
  • bus or subway to Staten Island Railway
  • subway to subway

Card type – consideration – Pay-Per-Ride MetroCards

  • $5 – $80 initial value in any increment (though vending machines only  sell values in multiples of 5 cents).
  • Card purchases or refills equal to or greater than $5 receive a 5% bonus (ex. $50 buys 21 rides).
  • Cards can be refilled up to $80 in one transaction and up to a total value of $100.
  • Though cards expire, the balance may be transferred to a new cards.

Card type – consideration – Student MetroCards: NYC does not have the propensity of yellow school business as other communities, therefore a partnership is forged between school districts and MTA.

  • MetroCards are issued to some New York City public and private school students allowing discounted access to the NYC Transit buses and trains, depending on the distance traveled between their school and their home. The card program is managed by the NYC-DOE Office of Pupil Transportation.
  • In Nassau County, Student MetroCards are issued by individual schools which have pre-paid for the cards.

Card type – consideration – Disabled/Senior Citizen Reduced-Fare MetroCards

  • Given to senior citizens and the disabled as a combination photo ID and MetroCard.
  • Allows half-fare within the MTA system. (Express Bus during off-peak hours only)
  • Half fare is also available on the 7-day and 30-day Unlimited MetroCards.
  • Card back is color-coded to match gender of card holder.
  • Card face is marked as “Photo ID Pass”

Purchase options

All new MetroCard purchases are charged a $1 fee, except reduced fare customers and those exchanging damaged / expired cards.

Subway Station Booths

Booths are located in all subway stations and are staffed by station agents. Every type of MetroCard can be purchased at a booth with the exception of the SingleRide ticket, and MetroCards specific to other transit systems (PATH, JFK Airtrain). All transactions must be in cash.

MetroCard Vending Machines

CU Blog - MetroCard - Model for CCB - Photo 2MetroCard Vending Machines (MVMs) are machines located in all subway stations and transit centers. They debuted on January 25, 1999 and are now found in two models. Standard MVMs are large vending machines that accept cash, credit cards, and debit cards and are in every subway station. Cash transactions are required for purchases of less than $1, and they can return up to $8 in coin change. There are also smaller versions of these machines that only accept credit and ATM/debit cards. Both machines allow a customer to purchase any type of MetroCard through a touch screen. The MVM can also refill to previously issued cards. PATH fare vending machines can also dispense MetroCards.

The machines are compliant with the Americans with Disabilities Act of 1990 through use of braille and a headset jack.

Neighborhood MetroCard Merchants

MetroCards can be sold by retail merchants not affiliated with MTA. Vendors can apply to sell MTA fare media at their businesses. Only presealed, prevalued cards are available, and no fee is charged.


In 2006 the MTA and Port Authority of NY/NJ announced plans to replace the magnetic strip with smart cards.

On July 1, 2006, MTA launched a six-month pilot program to test the new “contact-less” smart card fare collection system, initially ending on December 31, 2006 but extended until May 31, 2007. This program was tested at all stations on the IRT Lexington Avenue Line and at four stations in the Bronx, Brooklyn and Queens. The testing system utilized Citibank MasterCard’s PayPass keytags. This smart card system is intended to ease congestion near the fare control area by reducing time spent at paying for fare. MTA and other transportation authorities in the region say they will eventually implement system-wide.

Beginning October 7, 2012, MetroCard vending machines scattered throughout Manhattan dispensed something other than the classic blue and gold MetroCard. The MTA has begun to sell advertisement space on the front and back of the card to raise additional revenue. The 2012 ad appearing on the cards was purchased by The Gap [retail stores] and reads: “Be Bright NYC” with multicolored letters on a navy blue background. It encourages New Yorkers to visit Gap’s newly remodeled flagship store at 34th   Street and Broadway starting October 10, 2012. Customers who present the MetroCard at any Gap store were entitled to a 20% discount on merchandise purchases through November 18, 2012. The MTA has been running advertisements on the back of MetroCards since its inception, earning advertiser fees along with expired card value (accruing when purchased fares wind up not being used on a card deemed a collectible by fans). Deals were arranged as early as 1997. However, this Gap deal is the first time the front of the cards have changed in over 10 years. Approximately 10% of the MetroCards sold throughout the system in a typical month will carry the Gap advertising. Future MetroCard advertising campaigns will include the word “MetroCard” on the back of the card, flush right in the white space above the zone available for advertising.

Bad Actors: Fraud and Scams

The MetroCard system is susceptible to various types of frauds, perpetrated by con artists. Usually these frauds involve the con artist preventing or dissuading the commuter from using his or her own MetroCard, and then charging the commuter for entry to the system (entry is gained by a method that costs the con artist nothing).

Also, MetroCard Vending Machines are programmed to disable the bill or coin acceptor after a series of rejected bills or coins, which can result in a row of MVMs all saying “No Bills” or “No Coins”.

CU Blog - MetroCard - Model for CCB - Photo 3If a con artist is not using a stolen or broken card, he or she can use an array of unlimited cards. Multiple cards are needed because of the 18-minute delay between each swipe at the same station. Using unlimited cards, a con artist is able to sell rides for $1 instead of $2.

A report from New York State Senator Martin J. Golden claims this scam is costing the MTA $260,000 a year, and some con artists are making up to $800 a day executing it. All aspects of this scam have been recently prohibited by MTA policy and a New York State law.

The introduction of MetroCards did eliminate one class of criminals. When the NYC subway still used tokens, token suckers would steal tokens by jamming turnstile coin slots, waiting for unsuspecting passengers to deposit tokens (only to discover that the turnstile did not work), then returning to suck out the token. The retirement of tokens in 2003 put the token suckers out of commission.

The MetroCard does have a magnetic stripe, but both the track offsets and the encoding differ from standard Magstripe cards. It is a proprietary format developed by the contractor Cubic. Off-the-shelf reader/writers for the standard cards are useless, and even hypothetically could work only with both physical and software modification. Some have had partial success decoding it using audio tape recorder heads, laptop sound cards, and custom Linux software.
Source: Wikipedia Online – encyclopedic source; retrieved 08/18/2014 from: http://en.wikipedia.org/wiki/MetroCard_(New_York_City)


Appendix VIDEO – Which New York City Subway MetroCard to Buy – https://youtu.be/dB05rRU0qVE

Published on Jan 23, 2015 – Should you buy a pay-per-ride or an unlimited New York City Subway MetroCard? Watch this video for tips on which to buy and how to buy them at the vending machines. Check out the full article on Free Tours by Foot’s website at http://www.freetoursbyfoot.com/how-to…


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