E-Commerce Assignment

By
Shahena Saleem Shaikh
F.Y.M.M.S.
Division - B
Roll no: - 58

Under the guidance of

“Prof. Awesh Bhornya”

ANJUMAN-I-ISLAM’S
ALLANA INSTITUTE OF
MANAGEMENT
STUDIES(MUMBAI)
2022-2023
CASE 11.1: EC APPLICATION INNOVATIVE CREDIT CARD
MICROPAYMENTS FOR THE KOREAN METROPOLITAN
UNIFIED FARE SYSTEM

Questions:
1. How can credit cards be processed as quickly as stored - value cards at the
ticket gate?
 Credit cards, are not cost-effective enough to be used for the micropayment of
transportation as its service fee is high. In Stored-value cards Funds are loaded
into a debit account from which the money value of purchases is deducted when
purchases are made. Large cities in Asia such as Seoul, Hong Kong, and
Singapore have adopted similar types of stored-value transportation cards. As
such, credit cards and stored-value cards coexist as two major card services. The
two types of cards issuers compete to expand their application territory. The
transportation card company wants to extend the card’s application so users can
pay for parking fees, various toll fees, and at restaurants and stores. However, the
users have to load the cards for prepayment. For credit cards issuers to expand
their application to include payments for transportation, they need to simplify the
authorization process and reduce the service fee for the participating transporters.
In order to pay transportation fares quickly, credit card payments for subways and
buses must be processed without the full authorization procedure. This risk is
tolerable because the frequency and amount of micropayment abuse is low in
Korea. Therefore, the transportation ticket gate merely automatically checks
whether the card is valid and not on a blacklist. The gate displays not only the
fare, but also the charges incurred during the current month.

2. What is the major benefit of owning a credit-based transportation card for

commuters?
The credit-based transportation card has revolutionized the recharge service
process. In the early stage, both MRT cards and bus cards had to be recharged at
manned booths. To reduce the expense of the recharge service, unmanned booths
were installed at MRT stations. This will reduce the need of labour and cost
incurred for it. The major benefits are that with the credit – card recharge booths
can be eliminated altogether and users do not have to spend time recharging their
cards. Commuter’s expenses get eventually reduced as well as time is saved and
they also don’t need to carry all the cards for different mode of transportation.
Therefore, both the users and the city transportation authority benefit. Another
benefit of the smart transportation card is that it can restructure the city's
transportation system by aligning and coordinating the routes of subways and
buses. In the past, bus routes were designed in consideration of the departure and
destination points of citizens' trips. This approach intended to make it convenient
for citizens to take only one bus to reach their destination.

3. What is the major benefit of credit-based transportation cards to the city

government?
 The major benefits are that with the credit – card recharge booths can be
eliminated altogether and users do not have to spend time recharging their cards.
Time is saved, use resource is reduced. Therefore, both the users and the city
transportation authority benefit. The smart transportation card can restructure the
city’s transportation system by aligning and coordinating the routes of subways
and buses. Due to the national standardization and integration effort, nationwide
transportation cards are now unified using smart cards. The city also can collect
data about commuters so that additional buses can be dispatched depending upon
the passenger load by route and time. This has made the work easy and convenient
for the city government to plan according to the data and requirement.

4. How can the Metropolitan Unified Fare System enable the restructuring of
public transportation infrastructure?
 The Metropolitan Unified Fare System enable the restructuring of public
transportation infrastructure by making use of smart cards. A credit card that
allows one to pay for both MRT and buses, not only in Seoul, but also in other
major Korean cities without having to recharge the card. The accumulated
monthly charges are automatically paid by the bank. The Smart Transportation
Card can restructure the city’s transportation system by aligning and coordinating
the routes of subways and buses. Previously In the past, bus routes were designed
in consideration of the departure and destination points of citizens. This approach
intended to make it convenient for citizens to take only one bus to reach their
destination. However, too many buses created bottlenecks in busy streets, causing
traffic jams. In order to avoid such congestion, the MRT and main bus companies
planned to design the transportation system so that bus branch routes are
connected to the subway and to the main bus routes. To solve this problem, the
transportation card, credit or stored-value, is designed to memorize the departure
time from the MRT station so that the connecting buses do not charge passengers
again if the elapsed time is less than 30 min. Taking a branch bus will be regarded
as a transfer for single trip. The national standardization and integration effort,
nationwide transportation cards are now unified using smart cards. The city also
can collect data about commuters so that additional buses can be dispatched
depending upon the passenger load by route and time. Accordingly, Midnight
services can also be provided with the help of control center analysis. This has
helped alot in restructuring the process of public transportation and make it ease
for the commuters.