VeriFone System, Inc.
) announced that the company has been awarded a five-year contract
by the District of Columbia Taxicab Commission (DCTC). The contract
value ranges from $35 million - $45 million after factoring in
potential advertising revenue.
VeriFone won the contract in a competitive bidding process, and
thereby became the exclusive vendor for installation and support of
the DCTC's Taxicab Smart Meter System project.
Using the Taxicab Smart Meter System, the passengers can use new
payment options along with getting an opportunity to view digital
content during trips. The System also improves manageability and
accountability of the entire taxi fleet.
VeriFone provides an integrated suite of hardware, software and
services to the taxi industry. The in-taxi equipment provided
by VeriFone includes secure card payment acceptance devices, GPS
navigation, broadband wireless communications, and fleet management
control units. All payment transactions originated in the taxi are
sent wirelessly through VeriFone's secure payment gateway, leading
VeriFone to earn a service fee.
In addition, the taxi systems utilize VeriFone Digital Network
or VNET. Using VNET, VeriFone increases the revenue it derives from
each taxi with paid digital advertising that also provides
passengers with local news, weather, traffic and public service
messages. VeriFone's taxi payment solutions are currently deployed
in multiple U.S. cities, including New York City, Philadelphia,
Boston, Chicago, Las Vegas, Miami, Baltimore, and Fort
As per the contract, VeriFone will now develop, install and
support payment systems integrated with driver and passenger
information tablet displays for all of the District's 6,500
The company is also responsible for providing electronic trip
reporting, credit card payment processing, display of news and
other programming, as well as safety alert activation features for
both passengers and drivers.
In addition, the contract includes a Back Office Management
Information System that will provide the DCTC with automated trip
reporting and GPS location services.
Extracting content from the VeriFone Digital Network (VNET), the
10-inch tablet passenger information modules (PIMs) will include
news, weather, local and national content provided by NBC4 and NBC
Universal. The PIM also includes videos, interactive banners,
clickable "tabs" and crawlers, interactive maps and micro sites for
advertisers and partners.
The inclusion of 6,500 cabs in Washington D.C., will expand
VeriFone's taxi media footprint by 23% to over 35,000 in the U.S.
The news of the contract win boosted the stock price by 10.93%
in regular trading to close at $35.41.
In the long run, we continue to maintain a Neutral
recommendation on VeriFone. However, we have a Zacks #4 Rank on the
stock, which translates into a short-term rating of Sell.
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