Contactless Payments of Fares Gets Slow Start in Miami, According to Figures

_{(This premium article was originally published Jan. 9, 2020, in Mobility Payments’ sister publication NFC Times.)}

Take-up of open-loop contactless payment of fares in Miami-Dade County, Fla., has been slow so far, more than four months after transit officials launched the service on their small light rail network, according to figures provided to NFC Times.   

Officials with the Miami-Dade Department of Transportation and Public Works, or DTPW, who late last month expanded the acceptance of contactless EMV credit and debit cards and NFC wallets to the county’s much larger bus network, are no doubt hoping that the faster rollout of contactless cards by U.S. banks expected this year, among other things, will help boost usage of contactless payments by transit customers.  

The apparent lackluster interest among customers in tapping their bank cards and NFC wallets for rides stands in contrast with the much faster take-up that UK transit officials in Manchester saw after launching contactless payments on their own light rail network last summer. Unlike in the U.S., in the UK, nearly all bank cards sport a contactless interface and contactless payments account for at least 50% of all card payments in stores. 

The Miami-Dade Department of Transportation and Public Works, or DTPW, which is the 15^th largest transit system in the U.S., launched contactless payments last Aug. 21 for its Metrorail light-rail service, one of the latest of a small but growing number transit agencies supporting open-loop payments of fares. 

A DTPW spokeswoman told Mobility Payments‘ sister publication NFC Times this week that since the agency began accepting the contactless EMV credit and debit cards and card credentials in such NFC wallets as Apple Pay, Google Pay, Samsung Pay and Fitbit Pay in August, it had handled only a total of around 23,700 transactions. That is less than one-half of 1% of total transactions on Miami-Dade’s two-line Metrorail service for roughly the first four months of the contactless service. 

The DTPW didn’t immediately respond to a follow-up question on whether the agency had expected the low initial take-up. Major banks only began rolling out contactless EMV credit and debit cards in significant numbers last year. Visa, the largest card network in the U.S., estimated that around one in nine of Visa-branded cards would be contactless by the end of 2019. That is expected to grow to around one in three cards by the end of this year. Besides the low contactless bank card penetration in 2019, consumers haven’t taken to using NFC wallets, such as Apple Pay in large numbers, at least not yet.  

Faster Take-Up in Manchester
By comparison, contactless payments of fares for another light rail service, the Metrolink tram in Manchester, UK, which launched around the same time as the contactless service in Miami, saw a much faster ramp-up. As of August 2019, figures released by transit authority Transport for Greater Manchester showed that during the first month of the open-loop payments service, riders tapped their credit and debit cards or NFC devices to pay for around 5% of total trips. 

In London, Transport for London was the first major transit authority globally to roll out open-loop fare collection, starting in late 2012, then expanding it broadly across light and heavy rail in 2014. Today, contactless fares paid for with open-loop cards and card credentials on NFC devices make up at least half of all pay-as-you-go transactions in London. When all trips, including season tickets, are included, contactless payments account for around one-third of all London Underground journeys. 

Besides the fact that major U.S. banks are accelerating their issuance of contactless-enabled credit and debit cards, transit officials in Miami-Dade County are also betting that the added convenience of tapping bank cards or NFC devices to pay fares will encourage more riders to use the service. Open-loop payments allow transit riders in South Florida to avoid the need to reload the closed-loop EASY Card purse to pay fares.  

Officials no doubt also hope availability of contactless payments will help to further put the brakes on falling ridership of mass transit in Miami-Dade. Figures last year showed that bus ridership dipped below 50 million for the full year ending last September, 3.5% lower than for the same period in 2018. And Metrorail ridership dropped to just under 18.5 million for the year ending in September, 3.4% less than the previous year. While the rate of decrease in ridership last year was smaller than during the previous four years, ridership still is falling in the county. 

The DTPW also recently introduced fare capping with contactless payments on trains and buses, charging a maximum fare of $5.65, or after three rides on the Metrorail train service. That’s the same price riders would get if they bought a one-day pass, which they could tap with agency’s closed-loop contactless EASY Card or its EASY Pay app on Android and iOS handsets. With the app, riders display the ticket or scan a QR code to ride.  

The open-loop fare collection service was bolted onto the EASY Card system as part of a $33 million contract that the Miami-Dade transit agency awarded to U.S.-based integrator Cubic Transportation Systems. The contract also included upgrades to the fare terminals and back office. Cubic also built bolt-on or hybrid systems for transit authorities in London, Chicago and Sydney to enable open-loop payments under much larger contracts. 

Plans to Support Closed-Loop Cards with NFC
The Miami-Dade Department of Transportation and Public Works spokeswoman said that the agency plans to also support the closed-loop card in NFC wallets. “Cubic is working with us to create a virtual card solution that can be used by riders,” she told NFC Times, adding that the project was still in its early stages and the agency doesn’t have a scheduled launch date yet. 

In October, Cubic announced a deal with Google that would help enable closed-loop transit cards to be loaded into the Google Pay wallet in Android phones, alongside open-loop credit and debit cards.  

Among the agencies planning to support the service are those serving Google’s home base in Silicon Valley and the San Francisco Bay Area. 

The closed-loop mobile payments service is an alternative or an option to EMV bank cards loaded into NFC wallets. Google has already enabled closed-loop transit payments for a handful of mostly mid-tier and smaller cities, including in Melbourne, Australia; Birmingham and the West Midlands, in the UK; Portland, Ore., and Las Vegas in the U.S.; as well as with Suica cards that can be used to pay fares in Tokyo and the rest of Japan. None of these projects involve Cubic, the largest fare collection systems integrator globally.  

© 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.