Technology has simplified the way people pay for transit. Several transit authorities are deploying open payments to pay for transit. Several payment companies, such as Mastercard, Visa, American Express, Discover, and JCB, have played a key role in deploying open payment systems globally.

Bank cards (either physical or through mobile applications) have been used to pay for transit in several cities in Australia, South Korea, China, India, Indonesia, Kazakhstan and Malaysia. Several other cities in India, Australia, Thailand, New Zealand and Taiwan have plans to deploy open-payment systems in transit.

Recent deployments and developments

Singapore

Singapore’s Land and Transport Authority (LTA) deployed bank cards in 2019 to pay fares on its network under a new brand called SimplyGo. In March, the agency allowed commuters to pay fares using Mastercard, physical cards, mobile phones or wearable devices, for which passengers need to register on the SimplyGo account and link their Mastercard, issued by different banks. The fares will be charged to the passenger’s credit card or debit card bill. DBS Bank and United Overseas Bank (UOB) were the acquirer parties and were responsible for the launch of open payments. UOB processes all card payments made at the fare readers.

Commuters can tap their physical cards or mobile phones on the fare readers installed at the mass rapid transit (MRT) stations and inside the buses. The fares charged will be the same as those of ez-link or Nets FlashPay cards. SimplyGo can be used on devices with several payment options, such as Apple Pay, Fitbit Pay, Google Pay and Samsung Pay, simply by linking Mastercard with mobiles.

In addition to fare payment, SimplyGo also allows commuters to keep a track of their travel expenditure, provides details on concession card applications, and information on bus routes and timings. The app will be upgraded regularly, adding several new features in the near future.

In June 2019, Singapore LTA added Visa cards to the options for fare payment on its network. The acquirer banks include Bank of China, CIMB, Citibank, DBS, Hong Kong and Shanghai Banking Corporation (HSBC), Industrial and Commercial Bank of China (ICBC), Maybank, Oversea-Chinese Banking Corporation (OCBC Bank), Standard Chartered Bank, and UOB. Of all the Visa transactions being carried out in Singapore, around 80 per cent are currently contactless.

China

Shenzhen

UnionPay was launched in March 2019 on the Shenzhen metro. Passengers can pay fares using credit cards, debit cards and mobile phones (using Huawei Pay and Apple Pay) on the subway system. The near-field communication (NFC)-enabled gates can accept the new payment method. The flash payment method is based on international  Europay, Mastercard, Visa (EMV) standards and national financial standards, is extremely fast (0.2 seconds) and highly flexible.

Australia

New South Wales

In March 2018, open payments on public transit were introduced. In Sydney, passengers have the option of tapping on and off using mobile wallets on smartphones, tablets and wearable devices that are linked to their American Express, Mastercard, or Visa cards on ferries and light rail. In July 2017, trials began on ferry services using Mastercard. In March 2018, the trials were extended to American Express and Visa card holders. Till November 2018, over 235,000 trips were undertaken using open payment systems.

In November 2018, the New South Wales government (NSW) extended the payments option across the Sydney Trains network. Commuters can tap their PayPass- or PayWave-enabled Visa, Mastercard and American Express debit or credit cards, smartphones, tablets and wearable devices linked to these cards. In July 2019, the payments option was extended to buses.

Taiwan

Kaohsiung

In partnership with Union Bank of Kaohsiung, the Kaohsiung Rapid Transit Corporation will allow commuters to pay for transit using Mastercard and UnionPay bank cards. In August 2018, Mastercard partnered with the Kaohsiung Rapid Transit Corporation to launch bank card payments on the transit system. Passengers can pay for single-journey tickets using China UnionPay Quick Pass and Mastercard.

India

Cities such as Noida, Nagpur, Kochi and Navi Mumbai have rolled out RuPay cards to pay fares for transit in India. The Ministry of Housing and Urban Affairs has developed the National Common Mobility Card (NCMC) in collaboration with the Centre for Development of Advanced Computing, the National Payments Corporation of India (NPCI) and Bharat Electronics Limited.

According to NPCI, NCMC is an open model and in the future, Visa, Mastercard, American Express, UnionPay, Discover, etc. can be used on the transit systems if the transit systems decide to implement NCMC.

Future deployments

Australia

Queensland

In May 2019, Queensland’s Ministry of Transport announced the deployment of smart ticketing on the public transit network. Trials are expected to begin in 2019 during which passengers will be able to use credit/debit cards, smartphones and smartwatches to pay fares on trains, buses, and ferries. The contactless smart card, Go Card, will continue to be used on the network.

Under the 2018-19 budget, the Queensland government allocated AUD 371 million for the deployment of smart ticketing on its transit network over a period of four years. Of this, AUD 90 million was allocated for the deployment of technology and AUD 2 million for trial runs and the pilot.

Cubic secured the contract in June 2018 to upgrade the existing fare system, and to design, build and operate the new ticketing system under a contract secured in June 2018. The system will be rolled out across Queensland over four years. The most advanced technology will be deployed, which will need no upgrades if any new modes of payment are introduced in the future.

Perth

In January 2018, Perth announced the decision to upgrade its SmartRider smart card readers across its network and to accept smartphones and debit or credit cards for payment. No further updates have been announced yet.

Taiwan

Taiwan High Speed Rail, in collaboration with Taishin International Bank and CyberSoft, has announced its decision to deploy Mastercard, Visa, and Union Pay. Further details are yet to be announced.

Taoyuan

The Taoyuan International Airport MRT currently accepts credit cards issued by EasyCard Corporation, but credit cards issued by Visa, MasterCard, JCB International and China UnionPay will be accepted on the line from 2019 onwards.

Further, in cooperation with Alipay, Cathay United Bank has announced that commuters will be able to travel on the Taiwan Taoyuan International Airport MRT line using QR code-based mobile ticketing by fourth quarter of 2019.

Thailand

Bangkok

Bangkok’s common ticketing system is planned to be launched in 2020, after the recent deadline was pushed from end 2019. The Bangkok Mass Rapid Transit Authority of Thailand, the agency developer and operator of the urban mass transit rail system, is yet to decide whether it will develop the ticketing system or Krungthai Bank will undertake the task.

Currently, commuters carry multiple cards to pay the fares on different modes of transportation. The common ticketing system will be launched in two phases, called 2.0 and 4.0 (see figure).

The Bangkok Mass Transit Authority, the operator of city buses, will not be a part of the open ticketing system because of the current dispute over the electronic ticketing system installed on the buses.

New Zealand

New Zealand currently operates 16 different ticketing systems, all of which are expensive to run. The introduction of bank cards and mobile ticketing under the integrated ticketing initiative, led by Project NEXT, aims to integrate the public transport network in the country.

A nationwide transport ticketing programme is expected to be rolled out in New Zealand in 2021. Bank cards and mobile ticketing were initially planned to be introduced on Wellington’s transport system (railways followed by buses and ferries) by 2021, but will now eventually be launched across the entire transport network in the country by 2021. The only regions that will not be covered under the new system will be Gisborne and Marlborough.

India

NCMC is planned to be deployed for fare payment across all modes of transport in India. Transit authorities in cities such as Mumbai, Kolkata and Delhi have invited bids for the deployment of NCMC on their transit networks. Some Indian cities currently deploy RuPay-based NCMC. NCMC is an open model and in the future it will be possible to use Visa, Mastercard, American Express, UnionPay, Discover, etc. on transit systems if these systems decide to implement NCMC.

Visa also has plans to enter India’s transit payment market. In May 2019, Visa launched a specification to support India’s NCMC. The NCMC has been designed as an “open loop card” that can be used to make retail and transit payments.

Visa NCMC cards will have a contactless feature providing a card balance for offline usage at all major transit venues. The card payment process has been designed to increase cost-efficiency and to reduce friction for transit payments.

Domestic payment providers

The increasing adoption of domestic payment providers (RuPay) is seen in some countries like India, but this trend is not yet seen in other countries. For instance, in September 2018, Australia-based EFTPOS announced the acceleration of its services in transit. The lack of EFTPOS integration in NSW exists despite the fact that banks (like ANZ, Suncorp and CUA) are extending support to the domestic network. As of July 2019, virtualised scheme cards in digital wallets (Apple Pay and Google Pay) were integrated; however, EFTPOS is yet to be included in this integrated system.

Global integration still a distant dream

The ultimate aim of deploying open payments in transit is to make fare payments faster and easier. However, in countries in the Asia-Pacific region, integration is yet to be achieved. For instance, commuters with foreign-issued bank cards may be charged administrative and overseas transaction fees while paying fares on the Singapore LTA network.

No other country has announced plans for the global integration of open payment systems so far.

Challenges in wider acceptance of open payments

The deployment of open payment systems faces several challenges, both from developers and passengers. Some of these are:

  • Clash between different cards: The open-payment method faces a challenge when the commuter holds multiple cards together. Several cards kept or stored or held together may clash with each other when they are placed near the card reader.
  • Passenger reluctance or resistance: Passengers are reluctant to pay fares using bank cards because of security concerns. For instance, in Bangkok, the current bus e-ticketing system failed due to the physical limitations of buses and passenger behaviour. About 30-40 per cent of commuters are used to paying cash and hence are unwilling to accept any new method of fare payment.
  • Lack of standardisation: The majority of the public transit systems in the Asia Pacific region are closed loop and deploy different technologies. Standardisation is important for the successful implementation of open-loop payment systems.
  •  Small banked population: Commuters who do not have bank accounts are excluded from adopting bank cards to pay fares. They account for a large proportion of the population. Hence, transit agencies can tap only a small market.

The way forward

Commuters find public transportation an unattractive option because of the inconvenience of charging prepaid cards and the hassle of standing in long queues. To address this issue, government and transit authorities are making efforts to ensure wider acceptance of open payment modes. For instance, as taps from payment cards linked to smartphones increased, Transport for NSW revealed that it has extended weekly and daily fare caps to payments made by bank cards, mobile payments and wearables. This was a part of the agency’s attempt to promote fare payments through open payment methods and to issue fewer travel cards.

With better planning and standardisation, open payments in the future can replace the different travel cards deployed by several agencies. However, this transition is expected to take some time and will require serious efforts by transit agencies and authorities as well as cooperation from commuters.