MANAGUA—Bus passengers in Nicaragua’s capital are trading in their coins for plastic cards as the country implements its first electronic-payment system for public transit.
Starting in July, Managua’s 800,000 daily bus passengers will start paying their fares by tapping a pre-paid card called a “Tarjeta TUC” onto an electronic card reader mounted next to the bus driver on each of Managua’s 835 buses.
MPESO, Nicaragua’s only mobile money transfer and payment company, is managing the new TUC card system for all the intra-city buses. While the company has provided mobile payment services here since 2011, the TUC payment system its newest venture.
MPESO Country Director Haroldo Montealegre says the new digital fare-collection system, which is being implemented at the behest of the transportation companies, should dramatically reduce short-change corruption on city buses.
“Each bus loses about 400 cordobas per day due to missing or lost change, or from someone standing in front of the electronic counter to block it so when people pay the bus driver the money goes into his pocket,” Montealegre says.
Passengers will benefit too, he says. “Users will save time and pay only what they owe, not extra fare as is often the case now.”
To register for the free TUC card, bus users need to present their cédula (state identification card), university ID or other form of official identification, and receive an 8-digit MPESO account number, which in most cases is the same as their mobile phone number. Those who don’t have a cellphone are given a unique 8-digit number. After creating a pin, users visit an MPESO agent in Managua to load their bus card with cash, all of which transfers onto the card. MPESO does not take a commission from users crediting their accounts, but receives a fractional share of each bus fare paid.
The new system, which will be operational only in Managua, will not affect the intra-city bus fare, locked at 2.5 cordobas thanks to government subsidies.
Users do not need a bank account to get a TUC bus card, which can be credited in person, over the phone, or online. MPESO works with all phone operators and phone models in Nicaragua. The TUC bus card words like a debit card, so users will need to have a minimum balance of 2.5 cordobas on their account to get on the bus. MPESO does not offer overdraft protection on the TUC cards.
So far, passengers have embraced the new technology, Montealegre says.
“On opening day, we distributed 8,000 to 10,000 cards—and there were still 3,000 people left in line at the end of the day. There was an eight-block line at one distribution spot,” he says.
By the second week of distribution, more than 100,000 people had picked up their bus cards and another 41,000 had reserved them online. MPESO expects every bus user in the capital to have his or her card by July.
The public reacts
Passenger Yelba Mejia, 21, who studies business administration in Managua, said she thinks the new system is a great idea for its simplicity. “It’s easier. Change is heavy and people have to take time to take it out of their wallets, which makes it easier for people to rob you,” she says. “Now paying is fast and easy. I think this is good for everyone.”
But switching to a digital-payment system has also created some confusion. Though MPESO’s website has published a user’s guide and FAQ page listing where agents are located, many users have posted messages on the company’s Facebook page asking how to register and where to collect their card. Others simply complain that they need “more and better information please.”
Those who registered for TUC cards online are still waiting for a response from MPESO to find out where and when they can collect their card; the company says it is creating a calendar program for people to make appointments for pick-up, to avoid lines.
Montealegre says some confusion is normal when a new system is introduced. But some users are suspicious of the company’s data collection.
“When you get the TUC card, you need to give them your cédula number, which is like giving your social security number. This makes me uncomfortable because this information is really personal,” says Alberto Bendaña, a young professional who works in Managua. “The country tries to control everything, and even though this is a private company, too many owners of private companies here work for the government.”
Bendaña says he refuses to switch to the TUC card system because he considers it unnecessary. For the moment, the TUC card is optional. Bendaña and other users can still pay with coins, but cash payments on buses will be phased out by August, MPESO warns. After that, it’s TUC or walk.
Montealegre says users have no reason to be suspicious. Customers will use a pin and password for every transaction, whether to send money or pay a bill from their MPESO account. He says MPESO will not share users’ information with third parties, and the company is subject to the government’s financial regulatory authority.
“The Superintendent of Banks has access to see that we are not playing with people’s money,” he says. “We can only do what the customer allows us to with their pin.”
Montealegre stresses that the TUC cards are not a government initiative, rather a private arrangement between MPESO and the bus cooperatives.
“Bus companies are private. The government has certain regulations, but they can’t tell the bus drivers how to collect the money,” he says.
Moving toward mobile payments
Last May, Nicaragua became the first country in Central America to pass legislation regulating the use of mobile money. With the implementation of the TUC cards, Nicaragua will be the second country in the region—after Panama—to implement electronic payment on public transportation.
The new legislation regulating electronic currency stipulates that mobile money entities such as MPESO are non-bank financial institutions that can receive money as deposits, but cannot loan or perform other unauthorized actions with users’ money.
The legislation also created rules that stipulate that all users’ funds need to be held in accounts separate from the company’s funds.
As buses in Managua prepare to go cash-free, Montealegre reflects on future progress in transport. Through previous attempts to revolutionize mass-transit in Managua have failed, such as the ambitious $50 million Metro Bus project that died quietly on paper sometime in 2007, TUC cards are a first step toward modernizing the city bus system, which recently replaced its fleet of aging, second-hand BlueBirds with newer buses from Russia and Mexico.
“There’s no metro planned yet, but there are thoughts of having buses connected together in 2017,” he said, adding that there are several companies interested in investing in ways to innovate and improve Nicaragua’s public transportation system.