Bringing payments and transport together in harmony

Transit systems have come a long way since the days when only cash could be utilised on bus and trains. Today, there are a range of payment options available to travellers, including paper, magnetic tickets and cards, smartcards, mobile tickets, open loop cars and Mobility as a Service (MAAS). By Venceslas Cartier, Global Head of Transportation & Smart Mobility at Ingenico Enterprise Retail

And as there’s a wealth of benefits to utilising public transport, from environmental responsibility, to convenience and the ability to work while travelling, there are plenty of reasons for public transport to be the most popular form of transport in populated areas and cities. Here, I’ll explain the current trends affecting the transport sector, as well as how payments can optimise transportation for both operators and consumers alike.

Payments should be the orchestrator to grow the transportation and MAAS ecosystem. This is because first, payments will be able to coordinate the industry, being the link between different solution providers. Second, because payments providers can manage the coordination between local government, public and private transport services. And third, because it connects different relevant players from within the payments industry

The impact of the COVID-19 pandemic

Clearly, COVID-19 has had a dramatic effect on public transport. Research suggests that public transit ridership is down 70% across the globe since the onset of the virus, longer distance travel has seen reductions of up to 90%, and payment by cash has seen a 60% drop. 

In reality, the effects of the pandemic are unlikely to go away anytime soon. So, within the context of the pandemic, transportation needs to reinvent itself and adapt its processes to suit the shift in commuter habits that we’ve already seen and will continue to see in the future. 

More than 70% of consumers and travellers say they are likely to avoid the use of cash over the next six months. As a result, there is a clear desire to move quickly towards clean payments acceptance methods. With this in mind, more than 40 countries have raised their contactless payment threshold, further helping consumers to avoid contact with frequently touched pin pads. 

Other trends impacting transport

For travellers, the speed and convenience of payments are always paramount. However, with these must come safety and data privacy alongside it. Consumers want to pay quickly, and get from A to B as seamlessly as possible, but they also want to know that their personal information is secure. 

Hence, this is exactly why a payments partner is essential to adapt and provide travellers with the assurances they need. By partnering with a payments provider, operators can ensure they are able to manage and secure personal data, such as bank card information, while implementing other security features such as P2P encryption, PCI certification and tokenisation. 

There have been different approaches to payments in transportation that have become more prevalent since the late 90’s. For example, paper, magnetic cards and tickets have been adopted in 378 cities worldwide, and contactless smartcards in 381. However, the recent move to mobile and online ticketing is the most promising method so far, having seen significant growth in the last few years. 

The method has been adopted in 238 cities worldwide in just the last few years. As well as this, open loop cards/EMV has been adopted in 132 cities. And MAAS, the most recent introduction, is now up and running in 40 cities, though it will take time to completely implement this method of payment across the world. 

How payments can optimise transportation 

PSPs bring key benefits to operators by being part of the transportation open payment and mass ecosystem, ensuring they meet objectives in 3 key areas. 

1. Economically, by optimising investment in eco-structure and fostering financial transactions and therefore improving the wealth of the city.

2. Environmentally, by reducing the use of personal cars and alleviating pollution and congestion. 

3. Societally, making urban mobility more inclusive in terms of improving access to all areas and for all socioeconomic classes. 

Payments should be the orchestrator to grow the transportation and MAAS ecosystem. This is because first, payments will be able to coordinate the industry, being the link between different solution providers. Second, because payments providers can manage the coordination between local government, public and private transport services. And third, because it connects different relevant players from within the payments industry. 

Such expertise and technological solutions makes payments easy again for transport operators. It is achieved by providing a range of options so that the customer can choose which one is right for them, leveraging the capabilities of the mobility services’ infrastructure (contactless, mobile wallets, P2P, closed-loop, QR code, blockchain). It also offers local authorities the freedom to issue prepaid, post-paid and pay-as-you-go fare policies. 

As well as this, it promotes inclusion and sustainable urban development with a range of options. For example, the unbanked people are not excluded (via a prepaid virtual card, or by linking a mobility account to a prepaid account), and environmental impact per kilometre can be reduced along with use of vehicles with lower emissions per person per kilometre. 

To collect and manage payments, PSPs can provide payment liability to merchants thanks to mobility rules, allow aggregation of all due amounts from all mobility service providers, and collect payments in one single transaction from users while dispatching revenue between mobility service providers. 

Time for operators to act

So, as public transport is still a necessity for many consumers despite the COVID-19 pandemic, there is no reason why mobility service providers cannot make their journey as attractive as possible with the right payment solutions in place. 

The time to act is now. The payments technologies available are gaining popularity with travel providers across the world, and continuing to be improved all the time. Mobility service providers can ensure they are providing a competitive payments service that consumers are familiar and comfortable with. 

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