What we’ve learned from deploying contactless transit payments in Europe

Transport for London blazed the trail for contactless EMV payments in transit. It was revolutionary when riders in England’s capital city no longer needed to pay for paper tickets or load an Oyster card to take the Tube or bus. Instead, they could tap a payment reader with their contactless bank card or mobile wallet and pay for transit in the same way as their morning coffee. It was simple to hop on and off different modes of transport to get from A to B. 

Following London’s example, tap-to-ride systems were rolled out in New York, Boston, Miami and Sydney, among other major cities. These flagship contactless deployments show how tap-to-pay can benefit transit agencies and their riders. By giving passengers a simple way to pay with the card or payment-enabled device they carry everywhere, they reduced the expense of cash handling and issuing closed loop smart cards. Simultaneously, they broke down a major barrier to public transit use—the complexity of transit ticketing and fare payments. 

However disruptive, these multi-million-dollar proprietary payment systems also presented a problem. For small and medium sized transit agencies and operators, they were too costly to build and would take countless months to be ready for action. Across the industry, many transit providers concluded that agencies had to be a big player to set their sights on contactless ticketing. 

We’ve spent five years busting that myth, working with more than 250 transit operators in Europe to bring tap-to-pay to any scale of operation, from 10-bus fleets, to city metros and national rollouts. Our cloud-based payment infrastructure, built from the ground up for transit and mobility offers agencies of all sizes a simple, fast, low-cost route to contactless payment. 

Many of our projects involve close collaboration with multiple stakeholders, including transit authorities, operators, technology partners, acquiring banks, payment gateways, card schemes and AFC providers. Breaking new ground in the industry, we’ve learned many valuable lessons, which have helped us to evolve not only our product, but also our delivery and support structure.  

As we begin our expansion into North America, where we are already processing payments for several contactless demos in California. We’d like to share the knowledge and experience we’ve gained through our work in Europe to benefit transit agencies in the U.S. and Canada.  

Top 10 lessons learned:

1. Contactless is for every city, town and agency: Contactless EMV has a valuable role to play in all sizes of cities and less urbanized areas, making public transit more equitable and accessible for residents, commuters and tourists. Apart from the appeal of touch-free payments and the convenience of paying with a bank card, riders are drawn to the technology’s promise of automatic best-value fares. Fare caps and discounts can be set up in the system’s back office to bring value to low-income riders and eligible rider groups who buy trips on an individual basis.  
2. From the start, a modular approach is key: The procurement process is vital to get right. There is greater potential for innovation and collaboration when requests for proposals are broken down into smaller, specialized components. This allows a wider variety of suppliers to respond and encourages the selection of best-in-class technology for each aspect of the solution. This approach also brings a long-term, competitive edge to the procurement that is good for the industry.  
3. Start small and iterate: It can be difficult to attempt to go from ground zero to launching a large-scale contactless deployment. An incremental plan, beginning with a contactless pilot to gather live data and reporting, creates a solid foundation upon which to build a successful full deployment. 
4. One size doesn’t fit all: From their riders’ profile to local social and economic factors, no transit operator is the same. It therefore makes sense to factor flexibility into the fare payment system. A modular EMV solution with no vendor lock-in provides a choice of ticketing technology and financial partners. An end-to-end solution can be configured to answer specific needs.
5. Clear communication is vital: While new behaviors take time to embed, among customer service teams, drivers and riders, well-crafted internal and external communications can help to quickly normalize the use of contactless payments. We’ve seen excellent examples of rider communications, with agencies talking to users before and during roll-out to address questions.  
6. Rome wasn’t sacked in a day: The elimination of cash in the transit system is underway, but it isn’t going to happen overnight. The process must be handled with care, in line with regulations and passenger expectations. Accepting open loop payments is the first step towards removing cash from vehicles and freeing agencies from dependence on expensive, closed-loop cards. Low-cost, EMV prepaid transit cards can plug the gap for under-banked and unbanked riders. 
7. Locked-in fare collection contracts are dead: While it can be great to only have one supplier to manage, the single vendor relationship can hold agencies back from embracing emerging ticketing technology and reducing costs. Transit operators and agencies benefit from securing agreements that support the growth of their solution throughout its lifetime, defining and adding new scope when needed. 
8. Partners become your flexible friends: Flexibility can be woven into the fabric of contactless transit ticketing systems in many ways, from their modular architecture to the contractual agreement transit operators have with their suppliers. Success is also supported and fast-tracked through the selection of complementary partners who are willing to work with each other and invest in continual improvement throughout the stages of integration, testing and deployment. 
9. Agility meets transit agencies’ changing needs: Choosing a contactless payment platform that’s built with modularity and agility at its core means feedback from customers helps to evolve the solution. Improvements and new functionality can be put into scope in response to transit agencies’ requests. Proprietary systems, by contrast, are highly specified and less adaptable to emerging requirements. 
10. Collaboration can achieve big things: The holy grail of seamless multi-operator, multi-modal travel is within reach. Until recently, the integration of independent contactless EMV systems, while maintaining PCI security compliance, was considered too complex. However, multi-operator schemes are being explored in the UK by government, operators and paytech innovators, and a concept may be trialed soon. This would support fare calculation and settlement for multi-operator journeys, while allowing operators to retain their own infrastructure and fare models.  

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Amin Shayan is CEO of Littlepay, which provides payment infrastructure for transit and mobility.