Enabling open-loop contactless payments in mass transit can help bring more riders on board with the ease and simplicity of tap to ride.
If you're anything like me, contactless payments are part of your everyday life. As well as tapping to pay with my EMV® credit or debit card, I can store my card details in a digital wallet so I can make contactless payments with my smartphone or smartwatch instead.
Tap to ride is a natural extension of that simplicity and convenience. When you don't have to buy a physical ticket each time you take the bus, train, tram, or metro, public transport becomes a more accessible and attractive choice.
Tap to ride in 500+ cities
More than 500 cities have implemented open-loop contactless tap-to-ride payment solutions in their transportation systems1. For visitors and occasional riders in particular, it removes a number of barriers to using public transport. If I can tap to ride when I travel to a new city, I'm much more likely to use public transport than hop in a cab because I don't have to queue to buy a ticket, obtain or top up the local transit operator's closed-loop card, or understand the fare structure. With the same card or digital wallet I use to pay for all sorts of other things, I can simply tap to ride to my destination.
Open loop benefits for transit operators
Open-loop systems can offer transit operators a positive return. Reducing the need to issue and manage proprietary cards or tickets can mean considerable cost savings—and less waste. On top of that, contactless payments can help lines and crowds at ticket machines and offices.
And implementing contactless payments at the regional or national level can boost ridership and tourism and make public transport an easy-to-use (and greener) alternative to private cars, taxis, and ride-hailing services.
At the other end of the scale, contactless tap-to-ride can also open up public transport in markets where simple systems make more sense. Instead of installing turnstiles, a transit operator can have riders tap a smartphone or tablet to pay as they board the bus or other form of transport.
Tokenization for security, compliance, efficiency—and more
In most cases when we tap to pay, it takes a few moments for the transaction to be authorized. That brief delay doesn't matter when you're buying groceries or paying for a meal, but those moments spent authorizing every contactless tap-to-ride transaction in real time would soon add up, causing long lines at turnstiles and frustrating riders.
Fortunately, innovation in token management services overcomes this issue, allowing passengers more seamless access while maintaining security and compliance. When I tap to ride, the service tokenizes my 16-digit EMV® card number in the moment so I can step straight onto the tram, train, or other form of transit. That token can then be transmitted, along with the transaction data, to PCI DSS-compliant storage for deferred authorization at the end of the day. This type of solution also reduces the PCI DSS compliance burden of the transit operator and its solution partners.
Tokenization also allows a transit operator to gain better insights about each passenger’s riding habits and recognize them whenever they travel. This opens the door to a world of innovation that can help meet passengers' expectations about choice, value, and ease of use. Tokenization in an open-loop system can, for example, enable sophisticated fare management, such as daily, weekly, or monthly fare caps that enable effortless cost savings for regular tap-to-ride users.
An open payment platform: a foundation for innovation
To support an ever-expanding range of payment options, a transit operator's ticketing and payment acceptance system can benefit from an open, modular payment platform—one that can securely handle mass transit transaction volumes and schemes, multiple payment channels, and distinct transit authorization needs.
Working with a payment partner who understands mass transit payment acceptance and provides access to tokenization and other services can help you build a foundation that will enable the next generation of urban mobility payments.
So, are you ready to get on board? Read our guide to discover how you can incorporate secure, cost-effective, and scalable solutions that simplify payment acceptance and help you keep pace with the evolving payments landscape—today and tomorrow.
1 "Tap to Ride – Whole Nation & Regional Contactless Payments for Urban Mobility," Visa, 2022.