The future of payments in public transport

Should we go contactless?

The highly contagious coronavirus has put the world on high alert when it comes to touching high contact public surfaces. Recent studies have concluded that the current coronavirus (SARS-CoV-2) can persist on inanimate surfaces like metal, glass or plastic for up to 3 days depending on the conditions.

In many cases, contact is avoidable. But there are instances where it is not. We still need to pay for things for example. The question is:

Are traditional payment systems cut out for a contagious pandemic?

When it comes to paying for public transport services, some of us are still using cash which is notoriously covered in germs that can lead to the spread of disease. We use keypads and touchscreens on ATMs, POS terminals and ticket vending machines. We hand over payment cards to cashiers and drivers. All proven to carry even more types of bacteria than cash.

No matter how you choose to pay, we may make half a dozen payments on a typical day. Payment terminals can be touched by hundreds of people in quick succession. Cash can change hands every couple of days. That is millions of transactions and millions of opportunities to spread coronavirus.

This concern led to a massive surge in Google search interest relative to all other topics worldwide, hitting the highest possible increase of 100 in the middle of March.

Source: Google Trends


It has also seen countries take money ‘laundering’ to a whole new level, others have removed banknotes from circulation or have quarantined banknotes. The World Health Organization (WHO) responded to this, as well as the widely cited article ‘Banknotes may be spreading the new coronavirus’, with:

“We know that money changes hands frequently and can pick up all sorts of bacteria and viruses. We would advise people to wash their hands after handling banknotes and avoid touching their face. When possible, it would also be advisable to use contactless payments to reduce the risk of transmission.” 

At the same time, a study reported a 26.6 percent increase in consumers indicating that contactless is now a crucial feature when choosing a credit card. The UK also reported a 50 percent reduction in the use of cash due to COVID-19.

So, what is the future of payments in our societies? How can we minimize the risk of exposure to both parties during a transaction? How do we protect drivers and passengers in the age of coronavirus and beyond?

Digital payments. Contactless payments. The future is ‘wave and pay’ or ‘tap and go’.


Transit agencies and the shift to contactless payments

The message from the WHO is loud and clear: Wash your hands regularly and avoid touching your face, particularly after touching high contact surfaces in public places. Which also includes cash and other physical payment methods.

But what if this isn’t possible because you don’t have handwashing facilities in your workplace? What if an adequate supply of hand sanitizer is not readily available for the entire workforce? Unfortunately, this is the case for many bus drivers around the world.

With growing concern over the safety of drivers, the authorities face pressure to ban cash handling by bus drivers. Some agencies have gone as far as suspending fares to negate cash handling or fare enforcement because there aren’t any card validators at the rear doors where passengers are boarding.

The other message from the WHO: When possible, it would also be advisable to use contactless payments to reduce the risk of transmission. Not wanting to take any chances, most people seem to be following this advice. We are seeing a growing number of retailers and services making the shift to digital payments and contactless payment limits increase.

With no obvious end to the outbreak insight, do we need to face a reality that has been showing its face since well before 2020? Do we need to go cash free? Cashless payments were already expected to grow at a 10.5% CAGR from 2019 to 2024, this is now expected to tick-up worldwide as contactless payment boom.


The benefits of cashless transit services

During the current pandemic, there are obvious benefits of going cashless. If you remove cash handling and minimize any personal contact, you can reduce the risk of spreading the disease. But if you consider the bigger picture, there are many other benefits.


Source: Visa Cashless Cities Report


There are significant cost savings associated with going digital. Research has found that transit authorities spend 3.5 times more on the physical collection of fares versus digital fares (14.5 cents a physical dollar versus 4.2 cents a digital dollar). This stems from various sources, including significantly reduced travel from collecting and depositing cash, shorter reconciliation times, reduced costs from accounting errors and lower risks of cash related crime.

Offering a fast and frictionless payment experience offers a compelling passenger experience, considerable operational efficiencies and higher productivity of resources.

  1. Fast and easy payment for passengers eliminates the need to queue for a paper ticket or to ‘top-up’ smart tickets.
  2. The ability to board the bus quickly removes the need to interact with the driver, improves both driver and passenger safety and reduces dwell and run times.
  3. Position validators to allow passengers to board the bus and pay digitally using the rear door (where available) supporting social distancing and faster boarding.
  4. You can improve on-time performance and schedule adherence – the number one factor behind passenger satisfaction.
  5. Digital payments also help you make public transit more attractive and convenient for younger generations whilst increasing the sustainability of your city.

In fact, 45 percent of passengers would feel more positively towards public transport operators if contactless was introduced.

While there are many benefits to implementing a digital payment system, there are obvious costs such as equipping acceptance locations with terminals and other infrastructure, and the back-end system to track and manage payments. Luckily, we live in a time where these solutions are easier and therefore more cost efficient to implement than ever before.


Contactless payment solutions from LIT Transit

Contactless payments make it easier for passengers to board services, removes any unnecessary interaction and secures fare payment for the entire journey.

LIT Ticket offers a complete and powerful platform that puts you in control of ticketing, fare collection and revenue management for different modes of transport such as bus, rail, ferry and tram. The system is completely open, allowing you to offer a wide range of account based ticketing and payment options to your citizens.

Account based ticketing gives transport providers the opportunity to move to an ‘open loop’ system and away from issuing paper tickets and handling cash.


Final thoughts…

This article by Forbes explores how physical cash will give rise to digital money. It concludes by stating that “we’re already starting to see an evolutionary change in how money is transferred in China, and current events may be accelerating the digital transformation globally toward cashless payments.”

We would like to end on this thought from the same article: “It is also interesting to note that in Chinese, ‘crisis’ is expressed as 危機, which is a combination of two words: 危 (danger) and 機 (opportunity). The current danger is clear, and this could be an opportunity for all nations to drive more hygienic and efficient methods of payments going forward.”

What do you think? Find out how we can help your transit agency to join the contactless ticketing revolution, please contact us.

Posted 5th May 2020 By