Ridango wins public procurement to develop public transport ticketing system for Vilnius, Lithuania
LIT Transit parent company, Ridango, has signed a contract with Vilnius public transport authority SI…
On 27 May 2020, LIT Transit hosted a webinar Go contactless: Keep your drivers and passengers safe. Urša Hribernik, Head of Mobility at LIT Transit, took the audience on a contactless ticketing journey with industry experts who shared their experience and views from India, the UK and Dubai:
- Nilaya Varma, Co-Founder of Primus Partners India – a mobility consultancy in India, Nilaya has personally worked with clients in more than 30 countries.
- Mike Burden, Director of Burden Consulting Ltd – a consultancy specialized in automatic fare collection and road user charging, working on projects worldwide.
- Melvin Andrews Joseph, Strategic Solutions Director, Merchant Sales & Acquiring at Visa – with 13 years of experience in payments across Central Europe Middle East and Africa.
The panel identified some of the many essential elements that make a successful path to contactless ticketing. Together they offered an excellent overview of the contactless ticketing landscape and took a crystal ball view into what the future could hold as we emerge from COVID-19 and beyond.
One of the biggest takeaways from the discussion: COVID-19 is undoubtedly accelerating the momentum behind contactless ticketing, and everyone agreed, this will continue.
We explore some of the key themes here. Hear the full discussion now available to watch here.
The biggest driver for contactless ticketing: Customer experience
The benefits of contactless ticketing are far-reaching. From improving the customer experience to driving revenues and reducing operational costs, as well as protecting drivers and passengers by removing the payment interaction.
But ultimately transit authorities want to increase ridership and so you need to offer a good customer experience. According to Melvin:
“One way to do this is to offer as many payment options as possible. Pretty much every agency I have spoken to – whether traditional long-established or new entities starting up – is adopting contactless for customer centric reasons”.
Mike adds:
“It is the convenience for people to use something they already have or is easy for them to get, like a bank card or mobile phone. It is so simple for people to tap in and tap out. If you arrive in a new city you can just hop on and travel, if you are local you can make use of fare capping and other discounts without having to get a prepaid card”.
Contactless is not without its technical and usability challenges
While contactless is convenient and simplifies ticketing for customers, it is not without its challenges when it comes to usability (and implementation, covered later).
“We had to match the transaction speed of closed loop cards. Authorizing payment on a Visa card can take anywhere between 8-14 seconds, which isn’t fast enough for commuters and public transport where throughput is a priority. And so, we came up with multiple frameworks aimed at reducing the time to less than half a second to process,” explains Melvin.
Agencies also need to be prepared to manage multiple payment methods to ensure public transport remains open and available to everyone. As Mike states:
“We have talked about removing cash from the system, however, in a lot of places there are still people that want to use cash. On the flip side, not everyone has a bank card, and so there needs to be alternatives. You cannot create barriers and so you must balance out the options”.
The world is transitioning, multiple technologies co-exist
The world is very much in the transitioning phase and different few collection technologies co-exist within cities. According to Mike:
“I am seeing lots of technology appear, I don’t believe there will be one solution that dominates. We won’t have one solution in a city, there will be lots of options available”.
Nilaya shared the 6 levels of technology in India right now, which is probably typical the world over:
- Level 0 – Fare Box Collection
- Level 1 – Pre-printed Ticket
- Level 2 – Electronic Ticketing
- Level 3 – Smart Card Ticketing (Closed Loop)
- Level 4 – Smart Card Ticketing (Semi Closed Loop)
- Level 5 – Smart Cart Ticketing (Open Loop)
“We have fare box collection in place at the same time as we are moving to open loop systems as well, in the same region across multiple operators. In the last few years, we have seen a significant push towards level 5 open loop systems – there is clear progression across the country to go contactless,” adds Nilaya.
Open loop ticketing can include EMV contactless card or mobile payment using digital wallets such as ApplePay and GooglePay. We are also seeing ticketing systems adapted to mobile fare collection based on QR or bar codes.
Momentum was already strong
“Public ticketing may seem like a trivial issue, but it is more important than most of us realize. While the physical transport service itself looks mostly the same, ticketing has evolved to match the pace of technological advancements,” comments Nilaya.
Since its first acceptance in public transport in 2010 in Malaysia, Visa has seen rapid engagement, with contactless ticketing going live in 60 cities in 2019 alone.
“With more than 180 cities live by 2020 and over 300 cities in the pipeline, there is evidence that deployment is escalating,” comments Melvin.
Governments around the world are pushing digitization and working on getting contactless payment into the hands of the people, and the learning curve is very low – you just tap and go!
…and expected to accelerate
In India, the direction was already there, and COVID-19 will move things forward even faster.
“Funnily enough, most people would know that Indian’s love their cash and I have never seen them avoiding cash until now. I think that is going to continue,” says Nilaya.
Shifting to contactless payment was a direct response to the World Health Organization’s guidance, and payment networks globally have stepped up. Even cash heavy countries have seen contactless payments grow, such as Germany who has experienced a jump from 35% to 50%. Visa has seen a massive increase in all segments globally with surveys confirming that this will continue post-COVID-19. In the UAE and KSA alone, contactless payments make up 60% and 85%, respectively, of all digital payment transactions. (Source: Visa Data)
Implementation can be complex, but there is a roadmap
According to Mike, implementing contactless EMV networks comes with a fair degree of complexity:
“It is more than just a technology project, involving an ecosystem of stakeholders through a complex program of change. Also, you can’t take a solution from one city and just drop it into another, there are too many differences in the local environment in terms of structure, policies, standards, regulations and so on”.
There is no one size fits all, which makes contactless projects challenging but interesting from a delivery point of view. The Visa Ready for Transit program aims to solve this with a certified ecosystem that speeds up the time to market. It offers certification to technology partners and vendors, so transit owners can quickly partner with a trusted solution provider.
“I have seen some implementations be as quick as 6 weeks and others as long as 2 years. Visa has designed a program lifecycle that maps out a roadmap for each stage to ease the implementation process, from creating your vision through to post-launch,” adds Melvin.
Final Thoughts
Transport authorities need to understand what the future of travel is going to look like. People are not going to get over the fear of this virus anytime soon and social distancing and minimizing contact is going to be the new norm. With regards to contactless payments across the globe, COVID-19 will be driving a completely new set of payment trends that public transport providers will need to be ready to enable, fast.
This was an excellent discussion and we thank our industry experts – Nilaya, Mike and Melvin – for their valuable insight, and our audience for joining the webinar. Hear the full discussion now available to watch here.
If you would like to know how we can help you on your journey to contactless payments please get in contact, would are always happy to share our experience with you.
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