Article Highlights

Key Takeaway:

While some transit agencies are holding back from launching similar open-loop payments services–put off by relatively high upfront costs, generally slower transaction times and a few other issues, transit officials in New York City and Manchester, UK, have been touting the results of their open-loop launches in 2019.

Key Data:

The MTA said in an announcement Nov. 12 (2019) that it had reached the 3-million-tap milestone just six weeks after it had surpassed 2 million contactless journeys. That was a week faster than it had taken to go from 1 million taps to 2 million and four weeks faster than it took to hit the first 1 million taps.

Organizations Mentioned:

• Metropolitan Transportation Authority
• Transport for London
• Transport for Greater Manchester

(This premium article was originally published in November 2019. © Mobility Payments and Forthwrite Media.)

Two transit agencies, one large and one small, that began accepting contactless bank cards and NFC wallets to pay fares in recent months are reporting that use of the new payments services is accelerating among their customers.

While some transit agencies are holding back from launching similar open-loop payments services–put off by relatively high upfront costs, generally slower transaction times and a few other issues, transit officials in New York City and Manchester, UK, have been touting the results of their open-loop launches this year. The services enable riders to tap to pay with contactless EMV credit and debit cards branded by Visa, Mastercard and, in the case of New York, American Express. 

New York’s Metropolitan Transportation Authority, or MTA, recently announced it had topped 3 million taps for its OMNY open-loop fare payments service despite a limited number of subway stations and buses equipped with activated terminals that can accept the contactless EMV bank cards and NFC wallets. 

The MTA said in an announcement Nov. 12 (2019) that it had reached the 3-million-tap milestone just six weeks after it had surpassed 2 million contactless journeys. That was a week faster than it had taken to go from 1 million taps to 2 million and four weeks faster than it took to hit the first 1 million taps

The OMNY system, since it launched May 31 (2019), has only been available on New York City Subway stations, between Grand Central-42nd Street and Atlantic Avenue-Barclays Center, on three subway lines; in addition to all MTA buses on Staten Island, the smallest of the city’s five boroughs. 

Starting next month, the MTA will expand the system to several more subway stations and lines and by the end of 2020, it will cover all 472 subway stations and MTA bus routes. 

Meanwhile, a much smaller transit authority in the UK, Transport for Greater Manchester, announced Wednesday that it had hit the 1-million-transaction mark last weekend, four months after launching acceptance of contactless EMV for its Metrolink tram service. That compares with 170,000 contactless trips after the first month of service. If that rate of use had remained steady, Transport for Greater Manchester would have recorded fewer than 700,000 contactless taps by this point instead of 1 million. 

Those 170,000 contactless rides worked out to around 5% of total rides that the 93-stop, 100-kilometer Metrolink network sees during an average four-week period. With the new figure, Metrolink is seeing 250,000 contactless journeys per month, or around 7.4% of total monthly rides on Metrolink.

Nearly 20% of the contactless transactions on the Manchester trams are believed to be with NFC smartphones and wearable devices linked to NFC wallets, with the other 80%-plus using contactless EMV cards.  

A spokesman for Transport for Greater Manchester told NFC Times in September that of the 170,000 rides paid for with contactless between July 15 and Aug. 11, 82.2% were from contactless EMV cards, 17.4% from NFC smartphones and 0.4% from NFC smartwatches. The NFC phones and watches are linked to wallets from the major Pays services, such as Apple Pay, Google Pay and such wearables only services as Fitbit Pay and Garmin Pay. A spokesperson for the authority could not be reached to offer an update, but the percentage of contactless transactions from devices connected to NFC wallets is believed to be about the same after four months.  

As Mobility Payments’ sister publication NFC Times reported in October 2019 , the largest contactless EMV fare collection service launched so far globally–by Transport for London–is reporting a growing percentage of contactless transactions from NFC wallets, at around 20%. But it’s important to keep that number in perspective.  

Contactless payments have indeed taken off in London, accounting for 52% of all pay-as-you-go fare payments on the London Underground during the 2018-19 fiscal year, with closed-loop Oyster cards making up the rest. Contactless payments are at or near the 50% for pay-as-you-go fares on buses. Buses and the Underground are the two largest transit modes supervised by Transport for London. 

But pay as you go itself makes up only around 60% of total payments on the Underground and much less on buses, with the rest mainly coming from Oyster season tickets, Oyster Freedom Pass and day tickets. 

It means that contactless EMV payments made up 32.2% of total fare payments on the Underground and just under 17% of total fare payment transactions on buses during the last fiscal year. And so mobile contactless amounted to just 6% of total payments on the Underground and even less on buses and other modes of transit.  

But while not all transit agencies are ready to move to open-loop fare collection and may never be ready, as figures in New York and Manchester show, a growing share of riders see value in the increased convenience that tapping their bank cards and mobile wallets provides. 

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