Transit Operator in No. 2 Dutch City Launches Open Loop; Last Major Provider to Join Nationwide Service

Andrà Muller

RET, a bus, tram and metro operator serving the second-largest city in the Netherlands, Rotterdam, today announced it was beginning to accept open-loop payments. It’s the last major public transit company to join in the country’s nationwide open-loop service.

RET began accepting debit and credit cards and NFC wallet credentials on its five-line metro today. It plans to launch the service on trams and buses in the “near future,” an RET spokesman told Mobility Payments.

RET, short for Rotterdamse Elektrische Tram, has deployed more than 800 validators at gates for the metro, supplied by France-based Thales, according to the spokesman. RET has also equipped or is equipping trams and buses with a combined 1,700 new validators, provided by U.S.-based Conduent, using software from Dutch firm Sigmax.

The Netherlands is the first country of any size to roll out open loop  with transit agencies nationwide. Agencies in such countries as New Zealand and Ireland are planning to follow.

That Dutch rollout is not quite complete. There are a “few (other) spots to fill in coming weeks” with smaller agencies accepting debit and credit cards and wallet credentials, an organizer of the rollout, called OVpay, told Mobility Payments.

The RET launch in Rotterdam follows two larger public transit companies that have launched in recent months.

Nederlandse Spoorwegen, or NS, the Dutch national railway and by far the largest transit operator in the country, launched OVpay in late January of this year. And GVB, the tram, bus and metro operator serving the country’s largest city, Amsterdam, introduced open-loop payments in December 2022.

A total of nine public transit operators, along with Translink, which runs the aging national closed-loop card, OV-chipkaart (OV chip card) scheme, are coordinating the rollout of the new system. Besides NS, GVB and RET, the list of transit companies includes Transdev’s Connexxion, Arriva, HTM, EBS, Qbuzz and Keolis. The open-loop service began in 2021 with a pilot by Arriva.

The agencies have rolled out a combined 65,000 terminals nationwide that can accept EMV cards and credentials. The implementation– which features a number of vendors–including multiple back-office suppliers–has seen significant delays since work began roughly eight years ago. Some observers project completion in 2024 or later. Total capital costs will run at least €100 million (US$109 million).

As Mobility Payments earlier reported, Amsterdam’s GVB attributed the delays in the launch of its own open-loop service to the need to build a “stable ecosystem, where front and back offices combine (to) guarantee reliable handling of transactions.” This “turned out to be more complex than we anticipated,” a spokeswoman told Mobility Payments. “With the amount of transactions that GVB produces, we couldn’t afford any risks in issues.” The operator handled nearly one million trips per day before the pandemic.

It’s unclear why RET was the last major transit operator to launch open-loop service and why trams and buses did not launch at the same time as the metro. Conduent announced the contract to supply the 1,700 validators for buses and trams back in late October 2018.

Besides debit and credit cards and NFC wallet credentials, the terminals will accept the national closed-loop OV-chip card, as well as 2D barcodes from a mobile-ticketing app.

The terminals in the Netherlands also must accept a new closed-loop prepaid card based on EMV technology, to be issued by a mobile- and online-only neobank called bunq. This card will replace the Mifare-based OV-chip card. As Mobility Payments reported, some OVpay terminals might have problems supporting the new card.

‘Especially for Occasional Travelers’
The full OVpay rollout by the nine public transit companies includes enabling customers who tap debit cards and credentials to pay to receive age-related discounts and other concessions, as Mobility Payments reported last week.

Plans also call for open-loop debit to support popular general post-paid discounts, which will require debit cardholders to register with the system–just as they will to receive concessionary discounts. The customers will be billed later for the discounted fares.

The link between open loop cards or credentials and the discount eligibility will involve the customers’ bank accounts, so it might be limited to users with debit cards or credentials issued by Dutch banks. Debit is by far the most used type of electronic payments in the Netherlands.

OVpay project organizers plan to begin enabling these discounts with debit cards this year. The discounts will be applied on an account-based ticketing general back office.

Until this happens, however, open-loop payments in the Netherlands will likely be used only for full, single fares, which means that the payments method will not be targeted at regular riders, at least not at first.

A presentation March 29 by the OVpay coordinating group showed an open-loop penetration rate of just under 4% of all trips and 10% of all full-fare trips through mid-March 2023. Those are early adoption figures and they are growing. Still, the vast majority of the fares are paid for with the closed-loop OV chip card.

“(It’s) especially for occasional travelers, checking in and out with the debit card offers a solution,” Maurice Unck, managing director of RET, said in a statement today announcing the new open-loop service. “Tourists and visitors already have their means of payment in their pocket and can check in and out immediately, without any extra steps.”

The RET spokesman, when asked if the company believes open loop is mainly for occasional riders, appeared to agree, then added: “But (it’s) also for everybody else.”

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