UK Transit Agency Plans London-Style Multimodal Contactless System with Fare Capping

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Transit officials serving the UK’s second largest city, Birmingham, and the surrounding West Midlands region are moving forward with a London-style multimodal fare-capping system for contactless credit and debit payments, working with the major bus operator in the region, National Express, and other commercial bus operators.

The fare-capping system and related development will also cover the one-line West Midlands Metro tram, which unlike buses in the region, is not yet equipped to accept contactless payments. The £18 million (US$21.1 million) project will take an estimated two years to complete. The funding comes from the national government’s Department for Transport.

Local transit authority Transport for West Midlands is overseeing the project, which will give customers an open-loop option for multimodal payments and fare capping alongside its closed-loop Swift card. Swift, the most-used closed-loop fare payments service outside of Transport for London’s Oyster card, has its own fare-capping offer. Overall, Swift is tapped for around 60 million trips per year and has a quarter million regular users.

More recently, riders in the region can also get capping of fares on a daily, three-day and weekly basis with contactless bank cards on National Express buses but not when combined with other operators, including other bus services.

National Express, one of the UK’s largest commercial bus operators, provides more than 90% of public bus services in the West Midlands, said a spokesman for the West Midlands Combined Authority, which includes Transport for West Midlands. He added that other big privately held bus companies serve the region, either starting or ending their routes in the West Midlands.

Plans call for expanding fare capping to additional modes of transport  and to other geographies, including to the East Midlands and beyond, the spokesman told Mobility Payments.

“This system can be scaled up and even go national, which is where our government and the Department of Transport come in,” he said. “And the bus operators are doing this. Many of them, although they run services in the West Midlands, they are national operators.”

The initial geographical expansion would likely be to the East Midlands, including to the city of Nottingham, which launched contactless fare capping on buses and trams in the spring. Nottingham City Transport used a £2.7 million grant from the Department for Transport for the project, which was implemented by Germany-based INIT.

Coordinating agency Midlands Connect two years ago called for government funding for a “Tap and Cap” service throughout the Midlands that “would integrate payments for rail, bus and tram journeys” for what the agency said at the time would cap fares on a daily and weekly basis.

But the West Midlands Combined Authority spokesman said officials haven’t yet determined the fare-capping options they will offer in the West Midlands. They could include capping of fares after three days, which accommodates riders on shortened commute schedules caused by the pandemic. The daily, three-day and weekly options are already available with account-based Swift Go closed-loop cards, along with contactless payments on National Express buses.

Fare capping throughout the Midlands would mean riders in such cities in the West Midlands as Birmingham, Coventry and Wolverhampton would be able to tap to pay on the various modes of transport with bank cards and NFC phones and would benefit from the same fare-capping scheme if they go to Nottingham and eventually other cities in East Midlands. The West and East Midlands regions have a combined population of around 10 million.

While Midlands transit officials hope to add rail stations to the fare- capping system, it’s unclear when the rail stations will get contactless payments. The Department for Transport announced last November a plan to equip 700 Network Rail stations over the following three years, mainly in the North of England and the Midlands, to accept pay-as-you-go contactless open-loop payments.

The regions that would get the new system include such major cities as Birmingham, Manchester and Liverpool. But a range of issues, including restructuring of the national rail system, along with strikes and a driver shortage, are believed to have caused delays to the contactless rollout.

An earlier effort begun around four years ago by another transit authority in England, Transport for the North, to introduce multimodal contactless ticketing with fare capping failed in part because major private bus companies balked at going along with the concept.

At present, the big five private bus companies, Arriva, FirstGroup, 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.

That could change with the new multimodal pay-as-you-go initiatives and more franchising of bus operations in the UK.

The West Midlands Combined Authority spokesman said bike rentals could also be part of the multimodal contactless payments and fare-capping offer.

He said most of the £18 million funding for the West Midlands project  will go for software, a back-office system and other non-hardware costs, since buses that serve the region are already equipped with contactless validators. (National Express says it has a fleet of 1,600 buses serving the West Midlands.) The West Midlands Metro, which is owned by Transport for West Midlands, would have to be equipped with validators.

“There’s some infrastructure investment in there, but most of it is the development of the systems and the software,” the spokesman said.  “Then the ongoing costs will be met by the operators, obviously funded through ticket sales.

“We’re doing a sort of start-up investment and then the other stuff flows from that. Some of the operators already have card-reading systems. They’re just not joined up, and they’re not able to share the data.”

Transport for London’s contactless open-loop payments system has shown how attractive multimodal fare capping can be. The authority has offered both daily and weekly fare capping with contactless credit and debit payments for years and this is credited in large part for driving use of contactless, which now accounts for more than 60% of trips. Much of the growth in contactless has come at the expense of season tickets.

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