Insight: Apple Pay Launch of Virtual Closed-Loop Virtual Clipper Card Follows Emerging Trend

Although the trend for transit agencies to support open-loop fare payments, including with Apple Pay, Google Pay and other Pays wallets, has continued unabated–even accelerated–during the pandemic, another trend is taking shape: That of agencies adding virtual versions of their closed-loop fare cards into the Pays wallets. 

The latest example is support for Apple Pay by the Metropolitan Transportation Commission, or MTC, for its closed-loop Clipper card–accepted by 24 bus, train and other transit operators serving the San Francisco Bay Area. Google added Clipper in May to Google Pay, as part of its major initiative to enable users to pay for transit rides from its trip-planning app Maps, in collaboration with Google Pay. Other closed-loop cards will follow in this program.

The launch of virtual Clipper with Apple Pay and Google Pay had been expected. Since last September, Apple has added support for virtual closed-loop cards in Washington, D.C., Los Angeles, Chicago and now San Francisco, all with links to local transit apps developed by automated fare collection vendor Cubic Transportation Systems. Users can load and top up the cards directly in Apple Pay or through the local apps. All of the U.S. implementations of closed loop cards, with the exception of Chicago’s Ventra card, support Apple’s Express Transit mode, which enables users to avoid authenticating themselves with Face or Touch ID or with passcodes. But Apple Pay users can use Express Pay if they pay fares with open-loop cards in Chicago, the only city of the four which also supports open-loop fare payments. 

In addition, in Sydney, Transport for New South Wales launched trials for a digital version of its Opal closed-loop card in December with Apple Pay and Samsung Pay. Such other cities as Moscow with its Troika card and Dubai with its digital nol card also plan launches of closed-loop cards for Apple Pay. Dubai in December launched nol for Huawei smartphones, and, in addition to Apple Pay, Dubai’s Roads and Transport Authority, or RTA, says it plans to enable a virtual nol card with Samsung Pay. 

Google has also launched a digital version of the TAP card in LA in recent months. Its plans to enable payments in Maps via Google Pay for the Clipper card, allows users to buy and load the card in a transaction that is done in Google Pay but begins in Maps. Besides other closed-loop cards, Google’s Maps-Google Pay link-up will also enable QR code-based mobile ticketing through software-as-a-service ticketing providers, mainly for smaller transit agencies.

Agencies are keen to offer contactless payments services, especially in the wake of the Covid-19 pandemic, with customers perceiving these payments means are less risky for spreading the virus than paper tickets and cash. And even if they are planning to accept contactless EMV credit and debit cards and bank card credentials loaded into Pays wallets, most agencies plan to keep their closed-loop cards for customers who don’t have bank cards or don’t want to pay fares with them. These agencies often want to offer digital versions of their closed-loop cards, as well, to customers. 

In addition, some transit agencies or fare-collection schemes have no definite plans to support open-loop payments. That includes those in Hong Kong–which launched its virtual closed-loop Octopus card on Apple Pay last June after delays. It also includes those in Washington, D.C., Los Angeles and San Francisco. These agencies might someday support open loop.  

MTC, which oversees transportation planning in the nine-county SF Bay Area–an area the includes the headquarters of both Apple and Google–let a nearly $500 million contract in late 2018 to Cubic to build the next-generation Clipper system. While the system will be ready to also accept open loop, MTC has said that is not a priority. 

With the latest launch of Clipper on Apple Pay and, soon, Google Pay, users can load their existing Clipper cards or create a new card, though if they load their existing cards, they cannot continue to use the physical card, which is disabled. 

To add value, users either can use a credit or debit card they have loaded in the Apple Wallet, or they can load a “one-time” credit or debit card to their Clipper app. They can also buy transit passes in the Clipper app. If users want to add value with cash, they have to use ticketing machines in certain transit stations.