Dutch National Rail Operator to Launch Open-Loop Payments as Part of Nationwide Rollout in Netherlands

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Nederlandse Spoorwegen, or NS, the Dutch national railway and by far the largest transit operator in the country, yesterday announced it will launch open-loop payments next Tuesday. While open loop will only apply to single ticket sales–a reported 10% of NS’s total trips–the launch is a major milestone for the Netherlands’ nationwide EMV payments project.

Bas van Weele, program director for the project, confirmed that the open-loop portion of the rollout is still on track to be completed by the end of the first quarter, enabling customers to tap their debit and credit cards and card credentials in NFC wallets to pay for single full fares on bus, tram, train and metro networks throughout the country.

He also said the complete withdrawal of the nearly 20-year old national closed-loop OV-chip card would happen by the end of 2024. That deadline had been earlier pushed back by a year. Dutch transit agencies will issue a new closed-loop card based on white-label EMV technology starting in the third quarter of 2023, van Weele told Mobility Payments.

The country’s nationwide rollout, called OVpay, includes the replacement or upgrade of around 60,000 transit terminals and multiple back offices supporting a complex check-in, check-out system across numerous public transit operators and regions. Work began on the account-based ticketing system roughly eight years ago, at a cost of at least €100 million (US$108.7 million) for capital expenses–though some estimates put the cost much higher. NS reportedly has accounted for around one-third of the total investment for OVpay.

The project has experienced delays, but Tuesday’s planned launch by NS provides a major piece of the rollout. The national rail operator, which effectively acts as a commuter service provider, is deploying thousands of readers at gates, on platform poles and for handheld devices for inspectors. The government-controlled company operates more than 400 stations. NS held a pilot of the technology for 3,000 riders in recent months.

“This is a decisive and massive step toward full national coverage for OVpay in public transport in the Netherlands,” van Weele, who also serves as director of external affairs for transit operator Arriva in the Netherlands, told Mobility Payments. Train lines operated in certain parts of the country by Arriva and Qbuzz, another public transit company, will begin accepting open-loop payments, as well, on Tuesday.

As Mobility Payments reported last month, major transit operator GVB, launched open-loop payments (in late November) on its metro, buses and trams serving Amsterdam. Rotterdam bus, tram and metro operator RET also plans to launch OVpay soon. Some smaller transit operations have been live for months.

NS is one of the few national rail or commuter rail operators to accept open-loop payments anywhere. One issue for these types of agencies is that ticket prices are usually much higher than for local bus or metro service. For example, a one-way single ticket on NS between Amsterdam and Rotterdam costs €17.90 (US$19.46) at peak hours. The higher amounts create more fraud risks for agencies.

Still, OVpay developers are not putting extraordinary security measures in place for NS as compared with the current closed loop card that the rail operator accepts, according to van Weele. The “Revenue protection will be similar to the (rest of the) OV-chip card system,” he said in short written comments. “Gates at a large number of stations and inspectors will check your valid check in during your trip.” (The OV-chip card uses insecure Mifare Classic technology, but the payment-scheme operator Translink has other security measures in place.)

And despite the fact open-loop payments is only available for single trips for NS and other Dutch transit operators, van Weele contends that OVpay’s “open-loop payments options will include discount products and is not meant for just occasional riders.”

He said that later in 2023, a number of the Dutch operators are planning to introduce fare capping, first daily capping, followed by more “complicated versions,” though he didn’t elaborate.

And Van Weele told Mobility Payments earlier this month that transit riders in the Netherlands could begin receiving concessionary discounts while using their contactless open-loop cards and wallet credentials later this year. 

But a spokeswoman for NS, when asked if the rail operator would eventually support day passes, monthly season tickets, student and other discounts with open loop, (which are now supported by the closed-loop OV-chip card), pointed to the planned closed-loop card based on white-label EMV technology.

This new card, called OV-pas, will be available in physical and virtual form, the latter for mobile wallets, she noted. “This card will support discounts like now with the OV-chip card.”

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