Article Highlights

Key Takeaway:

Despite the growing demand for contactless payments, Paul Toole, acting minister for regional transport and roads for New South Wales, said in a statement Thursday that there was “still demand” for the closed-loop Opal card. He said the government is “aiming to create more digital products,” including trialing a digital Opal card.

Key Data:

Since the first contactless fare payments trial in Sydney in 2017, customers have tapped for a total of 30 million rides with contactless across trains, buses, light rail and ferries. Use of contactless averages 1.5 million contactless transactions per week.

Organizations Mentioned:

Transport for New South Wales, Transport for London

(This premium article was originally published in January 2020. © Mobility Payments and Forthwrite Media.)

Transport officials in Australia have released figures on use of contactless payments in Sydney and New South Wales, showing that customers tap their contactless credit and debit cards and NFC devices for an average of 1.5 million transactions per week, accounting for a relatively small but respectable number of transactions.

Still, around 90% of fare payments continue to be conducted with Sydney’s closed-loop Opal card, and the New South Wales government appears to have no intention of replacing Opal with open-loop contactless. 

Despite the growing demand for contactless payments, Paul Toole, acting minister for regional transport and roads for New South Wales, said in a statement Thursday that there was “still demand” for the closed-loop Opal card. He said the government is “aiming to create more digital products,” including trialing a digital Opal card.  

That would likely put Opal on NFC phones and wearables. Since Opal uses Mifare DESFire, that could include both Apple Pay and Google Pay, among other Pays wallets. Toole said that a trial of the digital Opal card would launch sometime this year.

He indicated that transit officials are increasingly interested in enabling fare payments from smartphones and wearables.  

“We know digital wallets are becoming more common, so being able to pay a fare with a mobile phone or smartwatch is just another added convenience for commuters,” Toole said in a statement. 

Despite the continued support for Opal, contactless open-loop payments is likely to continue to grow, given that Australia is one of the top countries for contactless payments at retail, with Visa reporting for the past few years that contactless makes up more than 90% of card transactions in the country. 

Transport for New South Wales, the transit authority covering Sydney and the surrounding state, began trialing contactless on its Manly Ferry in July 2017, before launching a full rollout on the state’s most-used transit mode, its subway and train network, in November 2018. The authority followed with the other modes, including putting contactless EMV terminals on buses and hooking them up to the open-loop fare collection system in September 2019. 

Transport for New South Wales last year also took the step of giving users of contactless payments the same daily, weekly and Sunday capping of fares and other discounts as they get using adult Opal cards. That is important because it eliminated the incentive for most customers to continue to use Opal. Riders likely still must have a special Opal card in order to get senior, student and other concessionary discounts. 

Transport for London in the UK, which has the premier implementation of contactless fare payments globally, found that offering the same benefits for contactless bank cards as were offered with its closed-loop transit cards helped contactless overtake the popular closed-loop Oyster card for pay-as-you-go transactions. 

Since the first contactless fare payments trial in Sydney in 2017, customers have tapped for a total of 30 million rides with contactless across trains, buses, light rail and ferries, the government said, adding that the use of contactless averages 1.5 million contactless transactions per week. 

Based on Transport for New South Wales ridership figures for December 2019 across all transport modes that accept contactless payments, that 1.5 million contactless fare transactions per week works out to a little more than 10% of total rides per week.

U.S.-based systems integrator Cubic Transportation Systems implemented the Opal system, which launched in late 2012, and also implemented the open-loop contactless rollout–bolting open-loop contactless acceptance onto the Opal terminals and network.  

It means that New South Wales does not have a full account-based ticketing system like Cubic is providing for Brisbane and the neighboring state of Queensland. Full account-based ticketing offers more flexibility including enabling transit agencies to offer different types of fare media, more flexible fare policies and giving the agencies an easier path toward integrating their transit service with Mobility-as-a-Service platforms. 

With its rollout of open-loop payments, Transport for New South Wales became one of the latest major transit agencies to support the service. It followed Transport for London, which launched open-loop acceptance in late 2012; the Chicago Transit Authority in 2013; and, more recently, agencies in Milan; Vancouver; Singapore; Guangzhou; Rio de Janeiro; and New York City. 

© Mobility Payments and Forthwrite Media. Mobility Payments content is for individual use and cannot be copied or distributed without the express permission of the publisher