UK Government Seeks to Bring London-Style Contactless Fare Payments System to Other Regions

Steve Hatton

The UK government’s plan to equip 700 rail stations over the next three years to accept contactless open-loop payments is a major initiative, as it seeks to replicate the success of London’s contactless pay-as-you go fare payments system elsewhere in the country–a goal that has proved elusive in the past.

The UK Department for Transport announced late last week that it plans to spend £360 million (US$482 million) on the rollout, which among other things, would install contactless EMV readers at hundreds of Network Rail stations, mainly in the North of England and the Midlands. The readers would accept bank cards and open-loop credentials on NFC devices. The aim is to help “level up” these areas with a London-style contactless PAYG system. The regions that would get the new system include such major cities as Manchester, Liverpool and Birmingham.

Around 400 of the 700 stations designated to get contactless payments are in the North. Improving payments and ticketing in this region and the Midlands is only part of the government’s plan to “overhaul” the rail network. The move to contactless will be part of other changes in an Integrated Rail Plan, which will be published soon.

The ambitious payments plan would set up a pay-as-you-go contactless service with fare capping across the 700 Network Rail stations. The plan would focus on commuter train fares, at least to begin with. But the Department for Transport also said there would be “greater integration with local bus and tram networks.”

“I think the aim is definitely to have that for cities like Liverpool, Manchester, all these big cities,” a Department for Transport spokesman told Mobility Payments. “The aim is to try and get the North of England to have a similar transport network to London’s, and to have it integrated and multimodal.”

Fare capping has been key to the success of Transport for London’s contactless service, which the agency rolled out in 2014. It enables customers to use London’s various transport modes, plus some Network Rail stations in London fare zones and receive the best overall price for daily and weekly travel.

Transport for London directly manages most of the transport services covered by the caps, including the Underground, city buses, trams, Overground (suburban rail) and TfL Rail.

It’s unclear when the plan for multimodal PAYG contactless payment outside of London will include fare payments on buses in the regions covered. Unlike bus services in London, which are franchised–giving transport officials more control over routes, schedules, fares and integration with other transport services­–most bus services outside of London are privatized and largely market-driven.

An effort begun three years ago by transit agency Transport for the North to build a London-style multimodal contactless fare-payments system, dubbed ABBOT, later collapsed, noted Tim Jefferson, senior consultant for The Human Chain/FirstPartner.

“This failed due to major private bus operators blocking the project on commercial grounds,” he told Mobility Payments. “But their position may change with the franchising of bus operations in major cities, such as Manchester and Liverpool, happening in the next few years.”

Manchester says it plans to phase in bus franchising starting in 2023. Other cities could follow.

At present, the big five private bus companies, Arriva, First Bus, Go-Ahead, National Express and Stagecoach, have their own contactless payments services. But none are integrated in terms of fare capping with each other or with other transport modes offered in cities outside of London, such as Manchester’s Metrolink trams.

There were other reasons that the Transport for the North smart ticketing plan didn’t go forward, said Jefferson, such as the argument that the case for fully interoperable multimodal ticketing has not been proved outside of London and not for intercity travel.

“But the mood post-Covid is different in the UK and especially in government, which will have to fund this,” he said. That includes plans to create a new body, Great British Railways, to replace Network Rail, which will own all stations. And there will be a new contracting model for rail services, as well.

“This is the first stage of a national rollout of a new ticketing infrastructure,” he said. “The exact structure of that has yet to be fully defined, but this PAYG contactless on rail for 700 stations nationwide is a major change away from paper and local smart card solutions currently used.”

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