TORONTO TRANSIT COMMISSION REQUEST FOR PRE-QUALIFICATION STATEMENTS OPEN STANDARDS-BASED FARE PAYMENT SYSTEM REFERENCE NO: R39PN10871

Submit complete Pre-Qualification Statement package to: Toronto Transit Commission Materials and Procurement Department Project Procurement Section 5160 Yonge Street, 6th Floor Toronto, Ontario M2N 6L9 Attention: Joanna Raimondo Senior Contract Administrator

To be received by the TTC no later than 4:00 p.m. on Friday, September 10, 2010, Please submit one (1) original and six (6) copies of the Submission.

Table of Contents PAGE 1. 2. 3. 4. 5. 6. 7. INTRODUCTION...............................................................................................................................1 DEFINITIONS ....................................................................................................................................1 PROCUREMENT SCHEDULE ...........................................................................................................1 RESERVED RIGHTS OF THE COMMISSION ..................................................................................2 EVALUATION CRITERIA..................................................................................................................2 SUBMISSION REQUIREMENTS.......................................................................................................2 DRAFT SCOPE OF WORK ............................................................................................5

Appendix Appendix Appendix Appendix

A Corporate Information B Joint Venture (if applicable) C - Detailed Technical Submittal Information D Declaration Statement

TORONTO TRANSIT COMMISSION Open Standards-Based Fare Payment System Reference No. : R39PN10871

PRE-QUALIFICATION STATEMENT Page 1

1.

INTRODUCTION

The Toronto Transit Commission is soliciting from interested parties Pre-Qualification Statement Packages to establish a list of pre-qualified bidders to participate in a procurement process for the funding, acquisition, installation, operation, repair, and maintenance of a new, open standards-based fare payment system. Respondents must demonstrate they meet all the requirements listed in the submission requirements to the satisfaction of the Commission in order for them to be considered qualified and short listed to participate in a Structured Multi Phase Bid Process (SMPBP). SMPBP is a process in which the technical and commercial requirements are discussed with all qualified potential proponents to finalize requirements prior to a formal Request for Proposal.

2.

DEFINITIONSThe Commission: The Toronto Transit Commission. TTC: The Toronto Transit Commission. Respondent: The party or parties submitting the pre-qualification statement. Proponent: The party or parties submitting the pre-qualification statement and evaluated and judged as pre-qualified. Consultant: The successful proponent submitting a proposal for the open standards-based fare payment system. Project: Refers to open standards- based fare payment system. Work: services or any part thereof, required by the contract for the Project.

3.

PROCUREMENT SCHEDULE

Following is the proposed procurement schedule which is subject to change at the discretion of the TTC: Issue Request for Pre-Qualification Statements Issue draft Commercial Terms Close Request for Pre-Qualification Statements Evaluate Pre-Qualification Statement Submissions Kick Off Meeting with Proponents (review SMPBP process) Issue draft Request for Proposal Documents to Proponents Conduct confidential meetings with Proponents Conduct meetings/negotiate commercial terms Issue Request for Proposal (final technical and commercial terms) Proposal responses due Complete Proposal Evaluation obtain authorization and Contract award August 9, 2010 August 23, 2010 September 10, 2010 September 17, 2010 September 24, 2010 September 24, 2010 October 4-8, 2010 October 11-22, 2010 October 25, 2010 October 29, 2010 November 30, 2010

TORONTO TRANSIT COMMISSION Open Standards-Based Fare Payment System Reference No. : R39PN10871

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4.

RESERVED RIGHTS OF THE COMMISSION

The Commission, at its sole discretion, may request clarifications or request additional information, as deemed necessary to evaluate the Pre-qualification Statement Package submissions. The Commission retains the sole discretion to determine whether a submission is responsive and if the Respondent is capable of performing the Work of the contract. The Commission reserves the right, at its sole discretion, to determine the number of pre-qualified Proponents. The Commission reserves the right to not proceed with a Request for Proposal.

5.

EVALUATION CRITERIA

Submissions will be evaluated on the basis of the information provided by the Respondent. Each submission will be re viewed to determine if the submission is responsive to the submission requirements outlined herein. Selection of Proponents will be based on the pass/fail criteria listed herein and relevant information provided by the Respondent in fulfillment thereof. Respondents who fail to provide any of the information/documentation required under the Submission Requirements below may have their submissions rejected without further evaluation. The Respondent should exercise care when completing its submission as failure to complete the documents fully or to provide all information required will affect the evaluation of its submission and may cause its submission to be rejected. The Respondent must ensure that all information provided is correct, as it may be investigated by the Commission.

6.

SUBMISSION REQUIREMENTS

In addition to the signed Appendix D Declaration Statement, the Respondent is requested to submit the information listed below in order for their submission to be considered and such information shall be evaluated based on meeting the requirements. Respondents are requested to structure their submission in accordance with the categories listed below: A. Cover Page (to include identification of all Team Members) B. Cover Letter (2 pages maximum) C. Table of Contents D. Executive Summary (Optional) E. Corporate and Team Information

TORONTO TRANSIT COMMISSION Open Standards-Based Fare Payment System Reference No. : R39PN10871

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Corporate Information use Appendix A to the Pre-Qualification Statement .1 Provide a single contact person for all future communication between TTC and the respondent. Please identify the contact persons name, title, organization, address, telephone number, fax number, and email address. Provide a summary of relevant corporate experience of the Respondent. The information requested shall specifically highlight the following areas: Background and capabilities; Number of years in business; Depth of available relevant resources; Relevant corporate experience completed since 2000, including the following: Project Name and Location; Client Reference Name & Phone No.; Other Major Consulting/Subconsulting Participants; Project Capital Cost CDN$; Project Duration; Description of the Project; Description of Services Provided;

.2

.3

If the Pre-qualification Statement is being submitted by a Joint Venture, one Corporate Summary should be completed that includes all requested information for each of the Joint Venture participant. Complete Appendix B Joint Venture and submit as part of the Pre-qualification Statement. One of the joint venture participants shall be nominated as being the principle in charge during the prequalification process. The principle in charge shall be authorized by the other joint venture participants to receive instructions for and on behalf of any and all participants of the joint venture. Each joint venture participant shall demonstrate its authorization of the participant in charge by submitting with the Prequalification Statement a letter signed by a legally authorized representative of each joint venture participant.

.2

Team Information A summary of the directly related and relevant experience and qualifications of the proposed Program Manager(s), Project Manager(s), and Design Engineer, as well as all key proposed project team members (including Subconsultant staff). The resumes should be tailored to specifically highlight relevant professional and academic qualifications and experience on projects similar to or directly related to the Scope of Work of this Prequalification Statement. The information requested shall specifically highlight the following areas: number of years of direct experience; technical qualifications, including academic qualifications and professional associations;

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a list of relevant experience for each key project team member specifically highlighting their relevant experience and qualifications, roles and responsibilities, description of the project, services provided, complexity, etc. a list of each Team Members references. These references should be able to describe the relevant qualifications and capabilities of Team Members seeking to take a leading role to design, operate and maintain the TTCs transit fare collection operation.

.4 .5

Controlling Interest: Identify the individuals or companies who hold an interest in each Team Member. Financial Information: Please produce information sufficient to document financial viability and the ability to perform the services requested including but not limited to Audited Financial Statements. Expected Advisors: Identify the companies and individuals who are expected to act as legal, financial, or other advisors for the Team.

.6

F. Open Fare System Project Methodology and Approach to the Work Each submission shall be clearly designed and presented with the goal of allowing the TTC to readily ascertain if the proposed Project Methodology and approach to the Work will accomplish the TTCs goals for this transaction as described in the Scope of Work. The technical aspects of the proposed Project Methodology and Approach to the Work must be as detailed as possible to help in this endeavor. Respondents are encouraged to discuss items such as: project understanding, approach to the work, schedule, challenges and solutions to the design, operating and maintenance, etc. Please also provide a preliminary work flow process map which identifies the entire proposed Open Fare System with the different service provider and Team Member functionality identified with the process map. H. Detailed Technical Submittal Information When preparing submissions, TTC requires that the Respondent addresses in specific terms and provide detailed discussion, that addresses each of the criteria listed in Appendix C - Detailed Technical Submittal Information for the evaluation process, as well as other discussion that demonstrates the Respondents responsiveness to requirements of the Scope of Work. In addition, respondents are required to complete Appendix C by providing a specific reference(s) to sections and/or pages in their submission that addresses each of the listed evaluation criteria. Additionally, the respondent must state whether the section addresses the evaluation criteria by indicating a yes or no answer in the column provided.

END OF DOCUMENT

APPENDIX A CORPORATE INFORMATION PRE-QUALIFICATION STATEMENT REFERENCE NO. R39PN10871 Company Name: ___________________________________________ Registered Address: ________________________________________ Contact Name and Title: ______________________________________________ Telephone No.: ______________________________________________ Fax No.: ____________________________________________________ Email Address: _______________________________________________

PROPONENTS RESPONSE 1. CORPORATE PROFILE a) Background and capabilities

b) Number of years in business

c) Depth of available relevant resources 2) RELEVANT CORPORATE EXPERIENCE

END OF DOCUMENTAppendix A Page 1 of 1

APPENDIX B JOINT VENTURE PRE-QUALIFICATION STATEMENT REFERENCE NO. R39PN10871

NAMES OF COMPANIES FORMING JOINT VENTURE

NAME OF JOINT VENTURE (if applicable)

NAME OF PARTICIPANT IN CHARGE

EACH JOINT VENTURE PARTICIPANT SHALL ATTACH LETTER OF AUTHORIZATION AS DETAILED IN SECTION 6, E, 3.

END OF DOCUMENT

APPENDIX A Page 1 of 1

Appendix C - Detailed Technical Submittal Information Pre-Qualification Statement Reference No. R39PN10871INSTRUCTIONS: Provide specific references to the section(s) and page(s) where each of the evaluation criteria are addressed and documentation of compliance is provided. Reference to Specific Section of Respondent's Response where Compliance with Criteria is Addressed and Documentation is Provided Section of Response (pg. Section Addresses # or Sect.) Specifically (Y/N) Category A CriteriaIs the proposed solution based on open standards of the financial services and payments industry? Is the proposed solution based on an open architecture? Is the proposed solution account-based? Is the proposed solution "online" and, therefore, configured to authorize transactions in real-time (within the transaction speeds described in the Scope of Work)? Does the proposed solution account for and provide a solution to all data communications networks required for realtime communications at subway and surface locations? Does the proposed solution include a pre-paid, contactless card program that is free of fees when used for TTC transit services (including a pervasive card issuance and reload network across the TTC's system, as well as through Toronto area retail locations)? Does the proposed solution implement contactless readers on every powered turnstile? Does the proposed solution implement contactless readers on every surface vehicle? Does the proposed solution implement a proof-of-payment ("POP") system (equipment and procedures) for streetcars and LRV's? Does the proposed solution include open-loop pre-paid, contactless card vending machines (with reload capabilities) in every TTC station? Does the proposed solution enable the TTC to satisfy all applicable Payment Card Industry ("PCI") requirements? Does the proposed solution enable the TTC to satisfy all applicable privacy standards? Does the proposed solution (and accompanying business terms) protect the TTC against revenue losses, such as equipment and system outages that would result in revenue losses?

Technical & Operating Qualifications Assessment

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Appendix C - Detailed Technical Submittal Information Pre-Qualification Statement Reference No. R39PN10871INSTRUCTIONS: Provide specific references to the section(s) and page(s) where each of the evaluation criteria are addressed and documentation of compliance is provided. Reference to Specific Section of Respondent's Response where Compliance with Criteria is Addressed and Documentation is Provided Section of Response (pg. Section Addresses # or Sect.) Specifically (Y/N)Does the proposed solution (and accompanying business terms) provide functionality and economic assurances to track, audit, and remit all TTC revenues? Does the proposed solution (and accompanying business terms) provide functionality and economic assurances to monitor, control, and eliminate customer chargeback risk for the TTC? Does the proposed solution include a business continuity plan and processes? Does the proposed solution (and accompanying business terms) provide functionality and economic assurances to monitor, control, and eliminate fraudulent transaction risk for the TTC? Does the proposed solution provide a customer support operation in the form of a web site and customer service call center? Does the proposed solution provide necessary maintenance support for the operation of the equipment and infrastructure and performance measures that allow tracking of operational and business outcomes? Does the proposed solution comply with all Canadian banking laws, rules, and regulations, including INTERAC? Does the proposed solution leverage COTS equipment and services? Does the proposed solution enable TTC to accept media complying with the EMV standard? Does the proposed solution address all TTC accessibility requirements, including AODA and appropriate legal requirements? Is the proposed solution for the OSFS modular, allowing components and sub-systems to be easily replaced, or operated by TTC or a third party? Is an implementation and deployment plan consistent with Section 6 of the Scope of Work provided? Does the proposed solution enable the distribution, sale, and processing of all TTC fare products, including all concession and non-concession fares? Does the proposed solution allow TTC to control, modify, and create their fares and fare policies independently of the Private Partner? Does the proposed solution provide for fare enforcement by Special Constables?

Technical & Operating Qualifications Assessment

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Appendix C - Detailed Technical Submittal Information Pre-Qualification Statement Reference No. R39PN10871INSTRUCTIONS: Provide specific references to the section(s) and page(s) where each of the evaluation criteria are addressed and documentation of compliance is provided. Reference to Specific Section of Respondent's Response where Compliance with Criteria is Addressed and Documentation is Provided Section of Response (pg. Section Addresses # or Sect.) Specifically (Y/N)Does the proposed solution account for all financial certifications and auditing requirements for an open standards payments system? Does the proposed solution allow TTC to audit fully all payment and usage transactions? Does the proposed solution demonstrate compliance with the performance metrics described in Section 12 of the Scope of Work? Does the proposed solution allow TTC to monitor and report on performance metrics? Does the proposed solution provide a test and quality assurance plan (including support for test facilities) for validating the operational, business, and technical outcomes required by TTC? Does the proposed solution include a Data Mart that can be independently operated by the TTC and accommodate TTC's business requirements? Does the potential Private Partner possess relevant technical and operational experience to meet the requirements expressed in the RFPQ Scope of Work (e.g. has operated a Level 1 volume payment card processing operation, has installed point of sale equipment in a Level 1 merchant environment, has operated and maintained a point of sale network (in compliance with financial and payment industry rules and regulations) in a Level 1 merchant environment)?

Technical & Operating Qualifications Assessment

Category B CriteriaIf the proposed solution includes a pre-paid, contactless card program, does program include a retail sales and reload network equal to/or greater than the current number of TTC ticket agent locations? Is the proposed solution accompanied by a detailed project plan and project management team structure that supports TTC's desired implementation timeline and system program management requirements? Does the proposed solution permit a fare payment solution for cross-boundary travel? Does the proposed solution account for a PRESTO system in the Greater Toronto Area? Does the proposed solution accommodate the single fare cash user on all surface and subway vehicles?

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Appendix C - Detailed Technical Submittal Information Pre-Qualification Statement Reference No. R39PN10871INSTRUCTIONS: Provide specific references to the section(s) and page(s) where each of the evaluation criteria are addressed and documentation of compliance is provided. Reference to Specific Section of Respondent's Response where Compliance with Criteria is Addressed and Documentation is Provided Section of Response (pg. Section Addresses # or Sect.) Specifically (Y/N) Category C - Financial Qualifications AssessmentDid the proposer provide a capital plan that clearly delineates all sources and amounts of capital required to finance: a) the acquisition of all equipment, software, and accompanying infrastructure to implement an open standards-based payment system at the TTC, and; b) operate, maintain, and - if necessary - refresh all equipment and infrastructure that comprises the open standards-based payment system? Does the proposal demonstrate a commitment to underwrite the required capital costs? Does the proposer clearly describe its organizational and operating structure (e.g. is the proposer structured as a legal partnership, or as a prime contractor assembling appropriate organizations as sub-contractors)? Depending on the proposer's organizational and operating structure, does the proposer provide a financial guarantee (e.g. performance bond or parent organization guarantee)?

Technical & Operating Qualifications Assessment

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APPENDIX D DECLARATION STATEMENTPRE-QUALIFICATION STATEMENT Reference NO. R39PN10871

The following Declaration is to be checked off and signed by an officer(s) of the Respondent. I/ We hereby declare that the information provided herein is true and correct to the best of my/our knowledge. I/ We further acknowledge that false statements on the application will result in rejection of this application and restriction from participating on any subsequent Request for Proposals, for the Open Standards-Based Fare Payment System. Name Signature _________________________________ _________________________________ Title Date _______________________________ _______________________________

Name Signature

_________________________________ _________________________________

Title Date

_______________________________ _______________________________

Name Signature

_________________________________ _________________________________

Title Date

_______________________________ _______________________________

TORONTO TRANSIT COMMISSION

Open Standards-Based Fare Payment SystemDRAFT SCOPE OF WORK AUGUST 9, 2010

Table of Contents1 Open Standards Fare System............................................................................................................ 9 1.1 1.1.1 1.1.2 1.2 1.2.1 1.2.2 1.3 1.3.1 1.4 1.4.1 1.4.2 2 Introduction ............................................................................................................................. 9 Market Opportunity and Background................................................................................ 9 Technical and Operating Overview................................................................................. 10 Objectives for the OSFS......................................................................................................... 11 Transaction Structure and Business Requirements .......................................................... 11 Customer Experience Requirements ............................................................................... 14 Current Operating Scenarios................................................................................................... 15 Additional Considerations .............................................................................................. 17 Abbreviations and Definitions ................................................................................................ 18 Abbreviations ................................................................................................................. 18 Definitions ..................................................................................................................... 20

OSFS Technical Requirements ...................................................................................................... 29 2.1 2.2 2.3 2.3.1 2.3.2 Overview ............................................................................................................................... 29 Description of Key System Components................................................................................. 30 Compliance with Standards, Codes, Laws, and Applicable Certifications ............................... 31 Standards for Payment Processing .................................................................................. 32 Standards for Manufacture of Equipment to be Installed on TTC Property ...................... 33

2.3.3 Standards for Design and Implementation of Software for Implementation on TTC Property ....................................................................................................................................... 33 2.4 2.4.1 2.4.2 2.4.3 2.4.4 2.5 2.5.1 2.6 2.7 2.8 General Design Requirements ................................................................................................ 34 Compliance with Laws Offering Protections for Disabled Persons .................................. 34 Operating Design............................................................................................................ 34 Environmental Guidelines for Installations ..................................................................... 35 Electrical Requirements.................................................................................................. 37 General Structural and Material Requirements........................................................................ 39 Hardening against Vandalism and Fraud......................................................................... 39 Software ................................................................................................................................ 39 Operating Standards Compliance............................................................................................ 41 Revenue Security and Servicing ............................................................................................. 41

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2.8.1 2.8.2 2.8.3 2.9 2.9.1 2.9.2 2.9.3 2.9.4 2.10

Revenue Accountability.................................................................................................. 41 Revenue Servicing.......................................................................................................... 42 Bill /Coin Acceptance Configuration .............................................................................. 42 Equipment / System Reliability Standards .............................................................................. 43 Fare Media Vending Device ........................................................................................... 43 Reader Assembly for Surface Vehicles ........................................................................... 44 Reader Assembly for Installation in Subway Stations...................................................... 44 Central Processor............................................................................................................ 45 Maintenance Requirements .................................................................................................... 45 Corrective Maintenance.................................................................................................. 46 Preventive Maintenance.................................................................................................. 47

2.10.1 2.10.2 3

Business Processes and Functional Requirements of the OSFS....................................................... 48 3.1 3.1.1 3.1.2 3.1.3 3.1.4 3.1.5 3.2 3.2.1 3.2.2 3.2.3 3.2.4 3.3 3.3.1 3.3.2 3.4 3.5 3.5.1 3.5.2 3.5.3 3.5.4 Revenue Assurance ................................................................................................................ 48 Fare Acceptance ............................................................................................................. 48 Fare Calculation ............................................................................................................. 49 Transaction Processing for Single Trips (PAYG) ............................................................ 56 Pre-Funded Transactions ................................................................................................ 59 Customer Support for Fare Payment ............................................................................... 59 Processes Specific to Transit Merchants ................................................................................. 64 Automatic Reload of Transit Accounts ........................................................................... 64 Customer Claims (Non-Chargeback) Intake and Processing............................................ 64 Risk Mitigation............................................................................................................... 66 Business Processes in Support of Revenue Assurance..................................................... 69 Business Intelligence Reporting and Processing ..................................................................... 73 Transactional Integrity Processing .................................................................................. 73 Operations Performance ................................................................................................. 74 Customer Satisfaction ............................................................................................................ 78 Central Processor ................................................................................................................... 78 Overview........................................................................................................................ 78 General Requirements .................................................................................................... 79 Fare Rules Engine .......................................................................................................... 81 Automated Reload of Transit Accounts........................................................................... 82

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3.5.5 4

Data Mart ....................................................................................................................... 82

Marketing and Customer Communications for New OSFS............................................................. 90 4.1 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.3 4.3.1 4.3.2 4.3.3 4.3.4 Overview ............................................................................................................................... 90 Requirements ......................................................................................................................... 91 TTCs Customer Base .................................................................................................... 91 Issuer Support Requirements .......................................................................................... 92 Merchant Support Requirements..................................................................................... 92 Private Partner Affiliates ................................................................................................ 93 Scope of Campaign ................................................................................................................ 93 TTC In-Home................................................................................................................. 93 TTC Guidelines for Advertising and Promotions ............................................................ 95 Graphics Inventory ......................................................................................................... 95 Duration of Campaign .................................................................................................... 95

5

Operating Procedures for New OSFS............................................................................................. 95 5.1 5.1.1 5.1.2 5.2 5.2.1 5.3 Maintenance Support ............................................................................................................. 95 Maintenance Management System.................................................................................. 95 Field Support.................................................................................................................. 96 Customer Support .................................................................................................................. 98 Applicable TTC Customer Service Policies .................................................................... 99 Training for TTC Employees................................................................................................ 101

6

Implementation Plan for OSFS .................................................................................................... 101 6.1 6.2 6.2.1 6.2.2 6.3 Overview ............................................................................................................................. 101 Summary Deployment Plan.................................................................................................. 102 Phase I Deliverables ..................................................................................................... 103 Phase II Deliverables .................................................................................................... 104 OSFS Launch....................................................................................................................... 109

7

Subway Environment................................................................................................................... 109 7.1 7.1.1 7.1.2 7.1.3 7.1.4 General ................................................................................................................................ 109 Functionality of Fare Gates in New OSFS..................................................................... 109 Overview of Current TTC Fare Gates ........................................................................... 110 Release of Fare Gate for Entry...................................................................................... 110 Fare Gate Messaging and Displays to Customers .......................................................... 113

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7.1.5 7.1.6 7.1.7 7.1.8 7.1.9 7.2 7.2.1 8

Message Sets................................................................................................................ 113 Permanent Graphics...................................................................................................... 113 Audible Tones .............................................................................................................. 114 Stand Alone or Orphan Mode Operation.................................................................... 114 Passback Control .......................................................................................................... 115 Fare Media Vending Devices or Kiosks for Open Standards System..................................... 115 Overview...................................................................................................................... 115

Surface Vehicles.......................................................................................................................... 132 8.1.1 8.1.2 8.1.3 8.1.4 8.1.5 Overview...................................................................................................................... 132 Fare Payment Processing .............................................................................................. 133 Reader Assembly Functional Requirements .................................................................. 134 Transaction Processing ................................................................................................. 135 Hardware Requirements ............................................................................................... 140

9

Other TTC Locations ................................................................................................................... 145 9.1.1 9.1.2 9.1.3 9.1.4 9.1.5 9.2 9.2.1 9.2.2 9.2.3 9.2.4 9.3 9.4 9.4.1 9.4.2 9.4.3 9.4.4 Overview...................................................................................................................... 145 Concept of Operations .................................................................................................. 145 Equipment.................................................................................................................... 146 Customer Agents .......................................................................................................... 146 Equipment Maintenance ............................................................................................... 148 Non-TTC Retail Sales and Distribution Locations ................................................................ 150 Overview...................................................................................................................... 150 Concept of Operations .................................................................................................. 150 Business and Functional Requirements ......................................................................... 151 Financial Settlement ..................................................................................................... 155 Test Lab............................................................................................................................... 155 Installation Requirements..................................................................................................... 156 General Guidelines for TTC On-Site and for Legacy LRV Installations ........................ 156 On-Site Installation Support.......................................................................................... 156 Surface Vehicle Equipment .......................................................................................... 157 In-Station Equipment.................................................................................................... 158

10 10.1

Customer Service Call Centre .................................................................................................. 159 Overview of Operation......................................................................................................... 159

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10.2 10.3

Concept of Operations.......................................................................................................... 159 Functional Requirements for the IVR System ....................................................................... 160 IVR System Customer Support ..................................................................................... 160 IVR Design Features .................................................................................................... 160 Voice Recognition Technology..................................................................................... 161 Customer Agents .......................................................................................................... 161 Training ....................................................................................................................... 161 Call Scripts................................................................................................................... 162

10.3.1 10.3.2 10.3.3 10.3.4 10.3.5 10.3.6 10.4 11 11.1 11.2 11.3

CSCC Performance Standards .............................................................................................. 162 Website for New Open Fare Payment System .......................................................................... 163 Overview ............................................................................................................................. 163 Concept of Operations.......................................................................................................... 163 Functional Requirements...................................................................................................... 164 Key Functionalities....................................................................................................... 164 Design and Customer Interfaces ................................................................................... 165 Payment Transaction Processing................................................................................... 166 Multilanguage .............................................................................................................. 166 Configuration of Website.............................................................................................. 166 Database....................................................................................................................... 167 Customer Access to Account Information ..................................................................... 167 Sales and Reload .......................................................................................................... 168

11.3.1 11.3.2 11.3.3 11.3.4 11.3.5 11.3.6 11.3.7 11.3.8

11.3.9 Compliance with Applicable Laws and Regulations Concerning Sale and Use of GPR Devices ..................................................................................................................................... 169 11.3.10 11.3.11 11.3.12 11.3.13 11.3.14 11.3.15 11.3.16 11.3.17 11.3.18 Accepted Forms of Payment ..................................................................................... 170 Understanding Billing Statements from My Financial Institution............................... 170 Sales and Reload Locations ...................................................................................... 170 Security, Privacy and Technology............................................................................. 170 Frequently Asked Questions ..................................................................................... 170 Website Cookies....................................................................................................... 170 Design Features and Creative Content....................................................................... 171 Performance Requirements ....................................................................................... 171 Website Availability ................................................................................................. 171

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11.3.19 11.3.20 11.3.21 11.3.22 11.3.23 11.3.24 11.3.25 12 12.1 12.2 12.3

Website Response Times .......................................................................................... 171 Transaction Volumes ................................................................................................ 171 Security .................................................................................................................... 171 Testing ..................................................................................................................... 172 Documentation ......................................................................................................... 172 Use of TTCs Logos and Trademarks........................................................................ 172 Use of Information about TTC Operations ................................................................ 172

Performance Standards ............................................................................................................ 172 Overview ............................................................................................................................. 172 Sales Availability ................................................................................................................. 174 System Component Performance.......................................................................................... 174 Transaction Processing ................................................................................................. 174 Central Processor.......................................................................................................... 175 Data Mart ..................................................................................................................... 175 Network Communications ............................................................................................ 175 Website ........................................................................................................................ 176 Customer Call Centre ................................................................................................... 176 Equipment.................................................................................................................... 176 Field Maintenance ........................................................................................................ 177 Business Operations ..................................................................................................... 177

12.3.1 12.3.2 12.3.3 12.3.4 12.3.5 12.3.6 12.3.7 12.3.8 12.3.9 13 13.1 13.2 13.3

System Program Management.................................................................................................. 179 Overview ............................................................................................................................. 179 PMO Team .......................................................................................................................... 179 Project Plan.......................................................................................................................... 180 Program Launch ........................................................................................................... 182 Weekly Progress Meetings ........................................................................................... 182

13.3.1 13.3.2 13.4 13.5

Project Plan Reporting and Documentation .......................................................................... 182 Quality Assurance Plan ........................................................................................................ 183 Plan Requirements........................................................................................................ 183 Quality Assurance Supervisor....................................................................................... 185

13.5.1 13.5.2 13.6

Design Review Process ........................................................................................................ 185 Conceptual Design Review (CDR) Process................................................................... 186

13.6.1

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13.6.2 13.6.3 13.6.4 14 14.1 14.2

Preliminary Design Review .......................................................................................... 186 Final Design Review .................................................................................................... 187 Project Closeout/OSFS Operational Phase .................................................................... 187

Testing Methodology/Master Test Plan .................................................................................... 187 Overview ............................................................................................................................. 187 Test Plan.............................................................................................................................. 188 Test Plan Scope ............................................................................................................ 189 PCI Compliance Certification ....................................................................................... 191 Scope of Friendly User Test.......................................................................................... 191

14.2.1 14.2.2 14.2.3 14.3 14.4

Performance Measures ......................................................................................................... 193 Evaluation of Test Results.................................................................................................... 193 Chargeable Failures...................................................................................................... 194 Non-Chargeable Failures .............................................................................................. 194

14.4.1 14.4.2

Appendix A: Overview of TTCs Current Fare Collection System ....................................................... 195 Appendix B: Wheel-Trans Services ..................................................................................................... 202 Appendix C: Proof of Payment Concept of Operations - Current Light Rail Vehicle Operations.......... 203 Appendix D: TTC Turnstile Information............................................................................................. 207 Appendix E: Transit City..................................................................................................................... 211

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1 Open Standards Fare System1.1 Introduction The Toronto Transit Commission (TTC) seeks a public-private partnership (the Transaction) with one or more private sector partners (the Private Partner) relating to the funding, acquisition, installation, operation, repair, and maintenance of a new, open standardsbased fare system (the OSFS). TTC requires that the OSFS rely on generally-accepted business processes and the technical standards of the financial payments industry. It is expected that the OSFS will coexist with TTCs existing fare collection system (the Current System) for an initial transition period and, with the exception of acceptance of cash at fare-boxes, subsequently replace use of the Current System. This document will discuss the TTCs value proposition to potential Private Partners, as well detail the technical and operating requirements and functionality of the OSFS. Market Opportunity and Background The TTC is the third largest public transit system in North America (behind the New York City Transit and the Mexico City Metro systems) providing approximately 1.5 million paid rides, on average, per day, or roughly 475 million annually. While the individual values related to these transactions may be small an attribute the TTC shares with other retail environments across the Greater Toronto Area (the GTA) collectively these smaller transactions represent a significant market opportunity. Generally known as micro- or low-value payments, consumer transactions valued at less than $5 accounted for approximately $6 trillion in consumer spending in 2007. The potential revenue opportunity from using technology to efficiently process micro-payments, coupled with businesses and consumers desire to improve transaction speeds and convenience, are driving the replacement of cash transactions in many venues with electronic payments, particularly using contactless payment options. Due to a captive clientele, public transit providers like the TTC are well positioned to drive the rapid and widespread adoption of innovative contactless payment usage. Contactless fare collection systems are being implemented across the world in order to achieve more efficient public transit operations. The TTCs vast physical infrastructure and extensive transit routes are surrounded by thousands of retail and other service outlets that thrive on micro-payment transactions. Accordingly, if the TTC were to transition to an innovative contactless fare collection system, the resulting change in its more than 700 thousand customers payment behaviour and preferences may profoundly influence more general consumer payment use for everyday retail purchases across the GTA. Public transit offers private sector businesses (Prospective Partners) a highly favourable opportunity for converting micro-payments from cash to electronic payment methods. Currently, the TTC conducts an average of 1.5 million micro-payment transactions per day, or nearly 475

1.1.1

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million on an annual basis. At the same time, budget constraints and competition from other modes of transportation are prompting public transit systems like the TTC to find innovative ways to reduce expenses, fund needed capital investments and increase revenues by improving customer travel experiences. Contactless payment technologies offer a way to achieve these goals and create a win-win-win proposition for the TTC, its customers, and the financial services industry. Cost, however, is still a major consideration in the decision to utilize this new payment technology. The challenge for the TTC is determining how to best balance the long-term benefits against the near-term capital investment required to introduce innovative fare payment options. With this in mind, the TTC has engaged The KMA Group, LLC (KMA) as lead advisor to assist the TTC in connection with the solicitation and evaluation of proposals from Prospective Partners for the OSFS. The TTCs business, technical, and functional requirements for the OSFS are discussed in detail in subsequent sections of this document, but it considers an open system as any automated fare payment system that accommodates several types of contactless media; some of which may also be used to purchase consumer goods from retail vendors other than the TTC. These include bank issued contactless credit and debit cards, open-loop general purpose reloadable contactless cards (GPR), and other contactless payment devices, such as Near Field Communications (NFC)-enabled mobile phones. It also includes business solutions that offer alternative means for initiating person-to-person, or person-to-business payment transactions, but that ultimately rely on open standards systems and networks to complete an electronic exchange of funds. Subject to Commission approval, the TTC is committed to adoption of open standards technology and systems that relieve TTC of the operational and business requirements associated with the issuance and support of its own, unique proprietary fare media and payment system. As such, the TTC seeks a partnership with a Private Partner that has broad experience and expertise in contactless micro- or low-value payment systems. The goal of this procurement process will be to identify optimal technologies and associated business terms for the OSFS system through an interactive and collaborative procurement process with Prospective Partners. 1.1.2 Technical and Operating Overview The TTC is issuing this Request for Pre-Qualifications (the RFPQ) for the purpose of procuring the OSFS and requisite business and operations support services. This new system will be designed and implemented to use and conform with established financial and payments industry open standards for an account-based payment system. It will permit customers to use contactless, open standard cards and other devices issued by financial institutions, and other certified issuers of contactless general purpose payment cards, to pay fares directly at fare gates and other points of controlled entry to TTC transportation services. Payment will be made with direct use of these contactless cards and devices, without the specific need for customers to purchase TTC-issued, closed-loop fare media.

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By using this approach, TTC will enable all of its customers to pay fares in ways already available to consumers when paying for goods and services at any retail store, via the internet, or through interaction with customer sales and service centres. All media used for fare payment by all customers will be contactless smart-cards that conform to open standards from a technical standpoint. Accordingly, in responding to this RFPQ, the Private Partner will structure its business, operating, and customer service solution to support acceptance of payments in a manner that is typical of a retail merchant. TTC, in turn, will assume a merchant approach as its management and business model to support ongoing OSFS operations. The information provided below describes the Business and Functional Requirements for the OSFS. Responses to this RFPQ must, at a minimum, adhere to all requirements described below in delivering a state-of-the-art, electronic fare payment, media sales and distribution, operations support, and processing business and technical solution. Chief among the RFPQ requirements is that the OSFS operates independently of TTCs Current System. By layering-on the OSFS solution, the Private Partner will preserve the OSFSs integrity as a financial payment system that is operationally distinct from other TTC systems. TTC anticipates that the successful respondent will design, build, implement, and support a fully tested and functional OSFS, including all field and back-office software, hardware, and firmware necessary to support an open-standard, account-based system. In developing the Business and Functional Requirements set out below, however, TTC has also introduced the opportunity for the respondents to offer innovative options, provided that all proposed options and enhancements are, at a minimum, entirely based on open standards business and technical requirements. In so doing, TTC intends to assure that the final OSFS solution can capture relevant, beneficial business and technical innovations emanating from the payments industry that may occur and prove applicable as project implementation moves toward completion. TTC wishes to assure that neither TTC nor its customers encounter business or technical barriers to using the same range of payment options available to customers as they pay for goods and services in a general retail environment. 1.2 1.2.1 Objectives for the OSFS Transaction Structure and Business Requirements In addition to the general opportunities discussed in Section 1.1.1., the TTC believes that there are many reasons why the OSFS, specifically, represents a tremendous business opportunity for prospective Private Partners, including the following: Exceptional Ability for Attracting New Customers. The successful Proposed Partner will have access to all new customers using debit or credit card based media. It is anticipated that the new media and provider will be the default replacement for the TTC Metro Pass media, providing access to the TTCs ever-increasing number of patrons who use this fare media. Currently, approximately 50% of TTC rides are taken by customers

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using pass products. When considered with those customers who purchase bulk trips, over 90% of TTCs total sales volume is derived from Pre-Funded fare options (e.g. passes and bulk trip purchases). Bulk trip purchases conducted at retail locations require a minimum 5-trip purchase. Exclusivity Potential. The TTC is prepared, dependent on contractual terms, to review opportunities for a scope of exclusive use of a predetermined period for the successful Private Partner. Commuter Parking Lot Operation Potential. The TTC currently operates 29 commuter parking lots. The successful Private Partner may have the opportunity to administer parking charges for each of these lots. Dominant Retail Activity. The Greater Toronto Area that is served by the TTC has the most robust economy in Canada. This area had combined retail sales of over $60 billion in 2009, providing tremendous sales potential for prospective Private Partners. TTC Riders Increasingly Using Cashless Methods of Payments. Approximately 50% of the TTC rides are made using transit passes and forego paying per trip with cash, tokens, or tickets. Continued System Expansion and Modernization. The TTC is a well-known and wellestablished public entity to partner with. The TTC has consistently evolved to fit the changing demographics of Toronto.

In order to access this lucrative Toronto market entrance and customer acquisition opportunity, the Private Partner chosen by the TTC to provide and operate the OSFS will be charged with: 1) Underwriting the Capital Investment Related to the OSFS. The Private Partner will design and install all equipment and infrastructure necessary to transition the TTC to an OSFS at the Private Partners expense. 2) Operating, Maintaining, and Refreshing the OSFS for an Annual Fee. The Private Partner will operate, maintain, and refresh (as required) the OSFS throughout the TTCs entire transportation system for a specified term. The Private Partner will receive an annual payment for operating and maintaining the OSFS, which will be calculated as a fixed percentage fee of the TTCs annual fare revenues (subject to an annual minimum and maximum fixed amount). The TTC expects the fixed fee, and associated minimum and maximum, to be equal to or less than its current cost of collecting fare revenues.

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3) Developing and Sharing New Revenues with the TTC. The Private Partner will share the revenues generated from credit, debit, and pre-paid payment usage outside of the TTCs transit system with the TTC (Non-Fare-box Revenues) (subject to a minimum annual guarantee and annual maximum to the TTC) for a specified term. The term of the operating and maintenance agreement, as well as the annual fee for operating the OSFS, will be competitively bid by prospective Private Partners. In addition, the nature and structure of Non-Fare-box Revenues, as well as the proposed terms for sharing Non-Fare-box Revenues, will be proposed by prospective Private Partners. In addition to these specific requirements, the TTCs general goals for a successful partnership to provide the OSFS include: Enhancing the customer experience by making it more convenient to pay for fares by utilizing various forms of contactless payment devices. Funding, acquiring, certifying (system level), installing, operating, repairing, replacing, upgrading (as required by new standards), and maintaining a new OSFS system to provide for modern fare collection technology, including forward compatible contactless readers, vending machines or multi-purpose kiosks dispensing contactless GPR cards, and appropriate back-office systems necessary to accommodate a more cost-effective, account-based fare collection solution. Developing a new and unique relationship with the private sector to shift implementation expenditures, servicing functions, and associated costs involved with fare collection, so as to eliminate the capital investment and matching or reducing the operating costs directly incurred by the TTC. Seamless adoption of innovations in fare payment technology and business processes, including forward compatible contactless readers, kiosks, and the appropriate back-office systems necessary to accommodate market-driven, cost effective non-proprietary fare payment solutions. Achieving significant operating cost savings through the life of the agreement by assuring that the total cost of ownership of the OSFS remains competitive with market-driven solutions for payment processing. Sharing in new, non-fare box revenues generated by the Private Partner.

To achieve these business goals, the TTC requires that the Private Partner respond with an optional turnkey solution that would design, build, install, and maintain a fully operational OSFS, according to the business and technical criteria described in this RFPQ. In addition,

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upon full implementation of the OSFS, the Private Partner will have full responsibility for its successful operation, including the provision of all support functions needed to meet the performance standards set out in this RFPQ. With regard to the operation of the OSFS, these support functions will include: Maintenance of all hardware, software, and systems that comprise the OSFS for a specified period of time to be determined during the procurement process; Processing of all payments, electronic and cash, due to TTC from the OSFS system; Collection of revenues from Fare Media Vending Devices (FMVDs) or other automated means of dispensing fare media, such as multi-purpose kiosks, deployed on TTC property and elsewhere according to the requirements of this RFPQ; Operation of the Web Site and OSFS Customer Service Call Centre; Day-to-day management of the OSFS, both as specifically required by TTC and in order to assure achievement of business goals and performance standards set out in this RFPQ; Operation of the Non-TTC retail sales network.

The TTC requires the OSFS to be fully operational according to the timeline described in this RFPQ. Prior to implementation of the OSFS, and for a period during which both the OSFS and the TTCs Current System coexist, the TTC will continue to be responsible for operations in support of the Current System. At no time during the period of operation of the Current System will the Private Partner have responsibility for operation or maintenance of the Current System. With the exception of physical attachment of certain OSFS components to Current System hardware, as well as reliance on power infrastructure as described in this RFPQ, the OSFS will function completely independently of the TTC Current System. 1.2.2 Customer Experience Requirements The TTCs customer service goals and requirements for the OSFS include, but are not limited to: Enhancing customers fare payment experience through simplification of steps in a manner that, from the customers perspective, yields tangible improvements. Simplification entails permitting customers to use contactless media and devices already in their possession, having been issued by financial institutions and other certified issuers of contactless electronic payment media; paying directly at the fare gate or fare box, without the intervening step of acquiring a specific TTC issued transit ticket; adopting familiar, proven customer service principles and procedures used in making retail purchases; and providing flexibility in purchase and reload locations, as well as options for using alternative forms of contactless payment media.

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Reducing challenges facing customers in interpreting fare policies, products, and payment methods by leveraging customers experience with credit and debit payments and accompanying customer support models for such retail payments. Assuring access to, and use of, contactless media by all TTC customers, especially the under-banked and those who choose not to use credit and debit payment instruments already in their possession for fare payment. Assuring access to, and use of, a wide range of contactless devices and alternative payment options that more closely match their retail payment needs and general purchasing behaviour. Meeting, and when possible, exceeding customer service levels available at best-inclass service providers through business, technical, and operational improvements in customer service interactions with TTC customers. Enhancing flexibility and speed with which TTC reacts to business, technical, and customer service innovations when accepting and processing fare payments, as well as when accessing and exchanging information concerning customers fare payment interactions with the TTC. Maintaining, if not enhancing the overall customer experience both in terms of ease of fare media use, accuracy and reliability of acceptance of fare payment, and time required for payment and boarding TTC transportation services.

1.3

Current Operating Scenarios The Toronto Transit Commission (TTC) provides public transit in the City of Toronto, and into neighbouring York and Peel Regions. Toronto is 622 square kilometres in size and has a population of 2.7 million people, with another 2.9 million people in the surrounding Greater Toronto Area. The TTC serves the City with a grid network of three subway lines, one intermediate capacity transit line, 11 light rail (or streetcar) lines and more than 160 bus routes. The TTC is a 24-hour operation that carries close to 1.5 million passengers on a typical weekday, or roughly 475 million annually, using a fleet of 700 subway cars, close to 250 streetcars and more than 1,700 conventional and paratransit buses. TTC carries almost 80% of all the transit trips taken in the GTA. The TTC uses a simple fare system with a flat-fare structure, allowing customer to travel an unlimited distance-per-trip for one fare. The TTC is a pay-as-you-enter, pay-as-you-board transit system, with seamless integration between subway, bus and streetcar services. Entry is by cash, ticket, token, valid pass or valid transfer. A more detailed description of the TTCs current fare collection system in provided in the Appendices.

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The TTC serves the City of Toronto with a grid network of subway and rapid transit lines, light rail (or streetcar) lines and more than 160 bus routes. All but two surface routes make over 240 connections to the subway system during the morning and afternoon rush hours. The TTC operates 14 bus routes into neighbouring municipalities, and the neighbouring transit agencies run more than 30 bus routes into Toronto that connect directly with the TTC subway system or other surface routes. The TTC operates contracted transit services into these adjacent municipalities. The OSFS will need to accommodate, and track, non-TTC fare payments for subsequent revenue settlement. The development of operating scenarios will be part of Design Review. During Design Review, the needs of cross-boundary customers will need to be addressed. Almost all TTC bus and streetcar routes operate all day, every day. The surface network provides service to within a five-to-seven minute walk of most areas within the city. More than 95 percent of Toronto residents live within 400 metres of some TTC service. One of the TTCs most important features is efficient, convenient and free transfers between all services and modes. At many stations, customers can quickly transfer between buses, streetcars and subways without passing through turnstiles or paying an additional fare. This is critical for a grid-based system that feeds riders from surface vehicles to subways for high-speed trips into the downtown core, and throughout the network. The majority of TTC services operate at peak intervals of five to 10 minutes, with some service as frequent as every two minutes, and off-peak service every two to 30 minutes. TTC subway trains operate about every two-and-a-half minutes during peak periods. At other times, they run every six minutes or better. More than 85 percent of daytime routes operate until approximately 1 a.m., every day. The TTC has made huge strides over the past decade to make public transit more accessible for everyone. The TTCs accessible bus fleet has grown to more than 1,600 vehicles, and over 90 percent of the TTCs bus routes are wheelchair and scooter friendly. The bus fleet will be fully accessible by 2011. The TTCs next generation of subway trains the Toronto Rocket is a six-car-fixed configuration train with open gangways, enabling riders to move freely from one end of the train to the other. The 30 fully accessible train sets will replace the subway fleets oldest cars. Torontos next generation of streetcars will also be accessible. The TTC is poised to bring the very best light rail vehicles (LRVs) to the existing network of streetcar routes. The LRV proofof-payment fare collection concept of operations is provided in the Appendices. Wheel-Trans is the TTCs paratransit service. It is responsible for door-to-door accessible transit service for people with physical disabilities who have the most difficulty using conventional

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transit services. Service is provided beyond City limits to the airport, and to established boundary transfer points in order to co-ordinate trips with other accessible paratransit services within the Greater Toronto Area. Wheel-Trans carries more than two million riders annually, or close to 7,000 trips on typical weekday. This service is operated using vehicles owned by the TTC, as well as accessible taxis with which TTC contracts. Wheel-Trans also provides a service called Community Bus. It is an accessible, fixed-route service primarily focused on individuals who have some difficulty accessing the conventional transit system. The following table provides a summary of the TTC Operating Inventory, which will be updated accordingly during detailed design.

Summary of TTC Operating InventoryDescriptionSubway and Rapid Transit Stations Staffed Subway Entrances Unattended Subway Entrances Subway Entrance Turnstiles Subway/Surface Within-Station Transfer Locations Subway Sation Commuter Parking Lots Buses Streetcars New LRVs with POP Operation Transit City LRVs Wheel-Trans TTC-owned Vehicles Wheel-Trans Contracted Taxis/Sedans TTC Third-Party Ticket Agents Other Third-Party Distributors

Total Current70 80 40 500 45 29 1,600 250 N/A N/A 200 700 1,200 600

Total With Planned Expansion80 90 50 650 60 31 1,800 N/A 200 200 350 700 1,200 600

Table 1 Summary of TTC Operating Inventory

1.3.1 Additional Considerations The Reader Assembly should accept open- and closed-loop ISO 14443 Type A/B contactless media (e.g. financial payment instruments, employee IDs, student IDs, etc.). The Reader Assembly should accommodate additional secure applications that may be based on nonfinancial payment transactions. With the aforementioned in mind, please describe an OSFS solution specifically for: TTC single fare, cash paying customers on surface vehicles and subways; LRV POP system; Transit City; Cross-boundary fare payment situations.Page 17

These specific situations are discussed in more detail within subsequent sections of this RFPQ. Please discuss operational and technical challenges, if any, identified with these fare payment situations as well. 1.4 1.4.1 Abbreviations and Definitions Abbreviations 3DES Triple Data Encryption Standard AC ACH AES ANSI AODA API ASTM BI CBA COTS CPU CSA CSR CSCC DDA DIN DUKPT EIA EMI EMV FMVD FUT GB GHz Alternating Current Automated Clearing House Advanced Encryption Standard American National Standards Institute Accessibility for Ontarians with Disabilities Act Application Programming Interface American Society for Testing and Materials Business Intelligence Canadian Banking Association Commercial off-the-shelf Central Processing Unit Canadian Standards Association Customer Support Representative Customer Service Call Centre Direct Deposit Account Deutsches Institute fur Normung (German Institute for Standardization) Derived Unique Key per Transaction Electrical Industries Alliance Electromagnetic Interference Europay MasterCard VISA Fare Media Vending Device Friendly User Test Gigabytes Gigahertz (Frequency of One Billion Cycles per Second)

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GPR GPS GUI IEEE

General Purpose Reloadable Global Positioning System Graphical User Interface Institute of Electrical and Electronic Engineers

ISO,ISO/IEC International Standards Organization IVR KPI LCD LED LTE MCBF MFIPPA MTBF NEC NEMA NFC NFPA NTP ODBC OEM PAYG PCI DSS PCI PED PCI PA PIN PIPEDA POE POS QA/QC QOS Interactive Voice Response Key Performance Indicator Liquid Crystal Display Light Emitting Diode Long Term Evolution Mean Cycles between Failures Municipal Freedom of Information and Privacy Protection Act Mean Time between Failures National Electrical Code National Electrical Manufacturers Association Near Field Communications National Fire Protection Agency Notice to Proceed Open Data Base Connectivity Original Equipment Manufacturer Pay-As-You-Go Payment Card Industry Data Security Standard Payment Card Industry PIN Encryption Device Payment Card Industry Payment Application Personal Identification Number Personal Information Protection Electronics Document Act Point of Entry Point of Sale Quality Assurance/Quality Control Quality of ServicePage 19

QSA RDBM RF RFID RoHS SLA SQL SSL TTC TTC CSC UL ULC UPS VAC VDC WAN 1.4.2

Qualified Security Analyst Relational Database Manager Radio Frequency Radio Frequency Identification Restrictions of Hazardous Substances Service Level Agreement Structured Query Language Secure Sockets Layer Toronto Transit Commission Toronto Transit Commission Customer Service Centre Underwriters Laboratory Underwriters Laboratories of Canada Uninterruptible Power Supply Volts Alternating Current Volts Direct Current Wide Area Network

Definitions AODA Fare Gate. A specially designed control gate that conforms to requirements of the Accessibility for Ontarians with Disabilities Act (AODA) in order to allow use by a customer with disabilities. Address Verification System (AVS). A functionality used primarily by the financial services to further supplement verification of the identity of the person presenting a credit card for payment. The process entails comparing address details, usually the postal code of the billing address on file with the card issuer, with information provided by the person presenting the card at the point of sale. Account Based Fare Payment. A business and technical approach that 1) uses a unique number to identify, organize, and otherwise manage all fare payment activities; 2) processes all activities related to the account through a central processor; and 3) enables activation of account activity by presentation of a device containing the account number and, most often, other pertinent information, to a reader that then enables communication with the central processor for initiation and completion of business activities on the account.

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Advanced Encryption Standard. A symmetric key encryption standard, adopted and used widely, that uses 128-bit block ciphers and key sizes of 128, 192, and 256 bits. Authentication. In payment systems, refers to the verification of the genuineness of the payment device being presented at a reader in order to complete a transaction. Payment systems frequently have several means of establishing the authenticity of the actual card or device covering a range of procedures and technical enhancements, often accompanied by physical and electronic means. Authorization. In payment systems, refers to the process of evaluating the status of an account and, more specifically, the financial readiness to assure payment to a merchant for the requested amount of the authorization. Authorization Response Code. A three-digit number that is generated as part of the authorization process in payment card transactions. Codes are a short-hand that enables further description of the response and the reason for the response (e.g., insufficient funds or lost or stolen) from the issuer of the payment card to the authorization request. Autoload. In transit fare payment, the capability for automated replenishment of the account with sufficient funds or with a specific capability, such as a pass with specific use privileges, so that the account holder may continue to use the credential associated with the account without initiating the replenishment steps repetitively. For the OSFS solution, the Autoload function will be available as an option to customers who wish to maintain an account balance or renew purchases of a specific fare product on an ongoing basis. The procedure will require registration and establishment of a means of payment acceptable to TTC. Automated Clearing House (ACH). A batch-oriented electronic funds transfer system governed by the National Automated Clearing House Association (NACHA) Operating Rules which provide for the inter-bank clearing of electronic payments for participating depository financial institutions. Bank-Issued Credit and Debit Cards. Payment cards issued by financial institutions certified to issue them under the laws and regulations of Canada, or other country in which they are issued to customers who qualify. In their key physical, technical, and operating characteristics, these cards conform to standards developed, promulgated, and enforced by the financial services and payments industries, and their representatives and affiliates Bank Identification Number (BIN). More commonly, the Issuer Identification Number, (IIN) a series of digits used according to ISO/IEC 7812 guidelines used to identify the issuing institution for credit and debit cards. It consists of a major industry identifier, a six-digit IIN, and a single digit check sum that uses the Luhn algorithm as an authenticity check. BASE24. Canadian version of financial payments messaging protocol.Page 21

Bill Acceptor. A component, usually as part of an automated vending machine or similar device such as a bank ATM that is designed to verify the authenticity of currency. Bill Vault. A secure, uniquely identified container used to hold currency accepted by a bill system, usually as part of an automated vending machine or similar device. Business and Functional Requirements. A set of specific requirements that define what capabilities the Open Standards Fare System (OSFS) must have in order to support fare payment operations at TTC. Call Scripts. A structured series of statements created for use by Call Centre personnel and intended to assist these personnel in developing and effectively using responses to customer inquiries that are accurate, consistent, and comprehensive. Campaign. A term often used in a public transit context to refer to a concerted effort to accomplish a task across a broad, comprehensive field of endeavour. Card Validation Codes (CVC). Also referred to as Card Verification Data or Card Verification Value, the Card Validation Code is a security feature used by card associations and the financial services industry to assist merchants and issuers to authenticate the payment card for card-notpresent transactions. There are different CVC codes and processes associated with how they are used in validation of the presence and authenticity of the card. Central Processor. The centralized, back-office data and operations system for business function outsourcing that enables and controls all business functions in support of processing fare payments for the Open Standards Fare System (OSFS). Among those functions performed are: fare payment processing; revenue management and settlement; business activity, financial, network, and operational monitoring; data management, broadcasting, and field worker specific messaging; and customer service call center and web site operation and support. Clearinghouse. Also often called a merchant acquirer, a clearinghouse provides processing of financial payments such that payments between transacting parties are cleared and settled accurately and timely according to rules of the financial services and payments industries. Code 39. One possible bar code symbology used to encode alphanumeric characters in creating an optically readable or scanable bar code. COTS. Commercial Off-the-Shelf hardware and software supplied by the Private Partner. Contactless Media or Devices. As applicable for use in the OSFS, media and devices that are: ISO/IEC 14443 and 7816 compliant, equipped with a microprocessor or chip, and are applicable for use as contactless payment media or devices by complying with, or having been licensed to use technologies and protocols of the financial services and payments industries.Page 22

Contactless Readers. Hardware that uses RF induction technology in order to support proximity reading of contactless smart cards. ISO 14443/ISO15963 is the international standard for proximity telecommunications for contactless smart cards and readers. The contactless smart card reader enables communication between the contactless smart card and other systems, which itself communicates with other components in a larger system for processing information. Corrective Maintenance Plan. The protocols developed to address unpredictable equipment and system failures and events that occur during the normal operation of the Open Standards Fare System. These unscheduled failures and events are the result of a wide range of causes, not the least of which are actions of individuals, whether intentional or accidental, that interfere with the designed functionality and operation of the OSFS. Current System. Refers to all hardware, software, firmware, systems, and supporting infrastructure built for and currently supporting the collection of fares at TTC from customers who wish to ride TTC transportation services. Customer Service Call Centre. The facility that is provided by the Private Partner that houses hardware, software, personnel, and other means in conjunction with the OSFS required to establish, manage, and maintain customer accounts and provide customer service as described in this RFPQ. Design Review. A formal process required by TTC during which Private Partner will present detailed information and documentation about the technical, operational, and business solution for the OSFS. A common organization is a three step process, consisting of a Conceptual Design Review, a Preliminary Design Review, and a Final Design Review. Taken in order, each step in the process delves more deeply into detail and by so doing brings the process of finalization of TTCs business and functional requirements for the OSFS to the point that both TTC and the Private Partner have a comprehensive understanding of the required outcomes. End-to-End Encryption. A process of securing data from point of contact to the financial processing site with no decryption in the interim. Europay MasterCard Visa (EMV) Standard. A standard originally developed under the auspices of VISA and MasterCard for the purpose of interoperability between Integrated Circuit cards and Point of Sale terminals used for their acceptance and for authentication of credit and debit card transactions. The most common implementations of the EMV standard are AEIPS (American Express), J smart (JCB), M-Chip (MasterCard), and VSDC (VISA). The EMV standard is being adopted globally under mandates from card associations as a means of increasing security of credit and debit transactions through the use of cryptographic algorithms. These algorithms permit authentication of the card to the Point of Sale Terminal and to the back office processor.

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Faregate. Refers to Current System equipment installed at TTCs subway stations that acts as a barrier and control mechanism to un-paid access to TTCs transportation services. TTCs fare gates that accept payment of fares are of two types: those that use bi-directional rotating barrier arms and those that consist of a bi-directional door to allow for AODA and other access. All Current System Faregates that currently accept payment of fares will be equipped with Open Standard Fare System (OSFS) Reader Assemblies. Fare Media Vending Device. An automated, self-service vending device that will be installed at all TTC subway stations for use by customers to purchase, reload, and dispense contactless General Purpose Reloadable (GPR) cards. GPR cards dispensed from Fare Media Vending Devices (FMVDs) will be open standard cards; once purchased or reloaded with adequate funds or a fare purchase option, and dispensed from the FMVD, the GPR will be immediately usable for payment of TTC fares. Field Maintenance. Refers to maintenance activities that are specifically expected to occur while equipment being serviced remains where it has been deployed for normal business operations. The types of remedial actions expected to be taken may be lesser in scope, requiring fewer steps and tools in order to be accomplished. Finger-Tip Maintenance. A maintenance procedure that can be performed on a piece of equipment that requires no, or very minimal hand tools or other devices in order to be completed. General Purpose Reloadable (GPR) Cards. A type of payment card available to consumers that functions like a debit card, but is unique in that it is not issued by a financial institution or other issuer to a particular, identified person. Instead, it is available in the first instance anonymously, typically at through a retailer who sells the card to the consumer. The consumer pays for the card and loads the account with a dollar value at the time of purchase. Unlike gift cards, which use similar open standards technology, GPR card are reloadable to a predetermined limit, at which time the card holder needs to identify himself to the issuer, or acquire a new card. Hand-Held Point of Sale Device. For the OSFS solution, a portable device that can be used for payments, validation of paid fares performed by Special Constable, and potential sale and reloads of transit accounts, for accessing information about customers account status, and for validation or Proof of Payment purposes are defined in this RFPQ. The Hand-Held Point of Sale Device must comply with open standards of the financial services and payments industries, must be capable of extended battery life to enable use throughout a tour of service, and may have other features, such as NFC capability, as required by TTC and as developed by the Private Partner in order t