This month, the global transit payments world descended upon London to talk about the future of how we pay for transit at Transport Ticketing Global. Hundreds of agencies, vendors, and regulators from 65 countries met up to show off the latest tech and plan the next big thing. Ruth Miller, our Director of Product Partnerships was in the mix and here are a few of her takeaways.

Why does it matter how we pay for transit?

Depending on your age and location, you might remember paying for transit with tokens. You might still pay with cash on board. Cash and tokens were the only transit payment options for decades, until new technologies emerged and transit agencies figured out they could:

• Reduce costs. Every train and bus system literally had to mint their own currency!
• Reduce boarding times and delays by making interactions with the driver quicker.
• Offer more complex fare products that deliver greater value and incentivize repeat use, including daily/monthly passes and fare-capping.
• Collect useful information about how people travel, by knowing where and when they tap on and off.

Why is it so hard to pay for transit?

In the 22 years since the Oyster smartcard launched in London, it’s been a rapid evolution from cash to paper to plastic. From swiping magnetic stripes to tapping NFC readers, to now contactless bank cards, agencies are hungry to adopt new technologies and standards… as long as they can fit the specific needs of transit agencies and riders.

• New capital funds are precious, and transit agencies are reasonably risk-averse. If the best new technology changes every few years, but contracts last several years, how can they keep up? And are the current bank processing fees going to hold up?
• In with the new, but not quite out with the old? How do we eventually phase out old systems that people use and love? Accepting cash on board is a thorny topic, which is expensive to manage, but many point to as an equity requirement. Others point out that no one wants to be unbanked, and that broader financial inclusion is the real solution.
• When you swipe your card to pay for coffee at a shop, the register is enjoying a stable connection to the cell network or WiFi. Buses move, often encountering connectivity issues moving through canyon-like urban centers.
• Transit payments have become much more complicated than simple one-way cash fares. New systems must preserve existing discount policies for seniors, youth, people with disabilities, employers, students,and others. 

What is the future of paying for transit?

Much of the excitement is about moving from smartcards (agency-branded cards like SEPTA Key, CharlieCards, MetroCard) to “open loop” (the credit or debit card that’s already in your wallet). These require less capital investment from transit agencies, who now don’t have to run a separate closed bank network. But they can have substantial processing fees. Also, many agencies are concerned about preserving discounts for seniors, youth, etc. (called “concessions” in industry-speak) and their employer pass programs.

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The finer details are still being debated, which makes a gathering like Transport Ticketing so exciting.

• Australian-based LittlePay supports fare capping, and now, Google Wallet shows their riders’ progress towards each cap. Agencies like fare capping because it encourages repeat ridership, but policies are only as effective as they are legible. LittlePay and Google won a commendation award for this work.

• Taiwanese Foongtone was there showing off an incredible array of powered NFC fare media – vibrating hamsters, tiny musical school uniforms, and (my favorite) a tiny light-up Sailor Moon-inspired wand. Moon prism transit power!
• US-based Conduent demonstrated several slick new integrated mobile features. I scanned a QR code on their kiosk to pay with PayPal from my phone. I was also able to receive the proof of payment on my phone via WhatsApp. 

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I was also fortunate to join a roundtable hosted by non-profit MobilityData on the future roadmap for transit payments. Currently, it’s the vendors largely driving what features will be developed next, based on their abilities and interpretation of the open market. With so many transit agencies around the world, all of them strapped for funds and capacity, most simply aren’t organized enough to dictate terms or even really agree on priorities. 

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What role is Jawnt playing in transit payments?

There’s general consensus that the future is bright for open loop in the United States, particularly if it’s possible to preserve discounts/concessions and employer discounts. The California Integrated Travel Project (Cal-ITP) has been launching concession discounts on open loop across several smaller agencies in California, proving the technical feasibility. Jawnt is following this work closely and will have exciting updates to post later this year.

Jawnt is also uniquely positioned, as a commuter benefit administrator in the transit payments space, to facilitate temporary eligibility between employers and transit payments systems. 

That’s all we can post for now. Watch this space!

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