Andy Farmer
Consultancy Partner
Cash is no longer king when it comes to consumers paying for transport. Passengers across the board prefer to use the many contactless or account-based payment solutions on offer.


According to the latest Worldpay Consumer Behaviour and Payment report, today’s consumers now carry very little cash on them, with 75% preferring to make contactless payments with their credit or debit card, and 30% preferring to use their smartphone instead.


Many transport companies are responding to this trend and are adopting cash-replacement systems with the aim of creating frictionless ticket sales and providing consumers with a better customer experience.


Since Transport for London (TfL) introduced contactless payments across its entire network in 2014 it has improved the speed and ease of transactions, as well as reduced queues at the barriers, and enhanced its customer experience considerably.  


In addition, TfL, which processes around £4.5bn in transactions per year, has created a new operating model that has driven business efficiencies such as reducing annual ticketing costs (down from 14.25% of total revenue in 2005 to 9% today) and saving £24m in cash-handling fees too.



Cash-replacement systems are swiftly being introduced by transport providers around the globe. In Sweden, it’s not been possible to buy a ticket on the Stockholm metro with cash for several years. In fact, according to Sweden’s central bank the Riksbank, cash transactions barely made up 2% of the value of all payments made in the entire country last year.



In November 2016, India’s Prime Minister Narendra Modi removed 86% of India’s cash from circulation, and cash-replacement systems became big winners overnight. Paytm, which has gone on to become India’s largest mobile payment service, added 20m users in just five weeks after the unexpected announcement.


Since then, Paytm has teamed up with Indian Railways’ IRCTC and launched an online travel ticketing system. By Mid-2017, eight months in, it was processing more than one million ticket purchases per month, a figure that is expected to triple this year as user adoption rates grow.



Elsewhere in Asia, Singapore’s Land Transport Authority (LTA) has been trialling an account-based ticketing system to mobile wallets, such as Apple Pay, Android Pay and Samsung Pay. Currently, more than 100,000 commuters have signed up for the Mastercard pilot, which averages over 60,000 daily transactions. It has been such a success that since September 2017 the scheme has been available to Visa users too. The LTA estimates that the implementation of smarter ticketing systems will save the city/state S$20 million ($15 million) a year which would otherwise have been spent on maintaining cash-based systems.


United States

Many US cities are also rolling out mobile ticketing solutions. The New York Waterway, Toronto Transit Commission, Capital Metro (Austin), and King County Metro (Seattle) are just some that have adopted Bluetooth and NFC ticketing solutions being powered by Bytemark.


In other states, The Orange County Transportation Authority has teamed up with Moovel to deploy a multi-modal platform, which was rolled out across its entire fleet of buses during the second half of 2017.


Eastern Europe

Contactless ticketing machines have been introduced onboard trains and buses in Estonia. The company behind the move is mobile ticketing provider Ridango, which has also introduced its systems in the Nordics, Lithuania and Greenland.


Ridango has also created a dedicated app that provides passengers real-time information about schedules. Since its introduction, the traveller’s satisfaction has reportedly increased and cash sales have been reduced.



Here in the UK, many transport companies are trialling new cashless payment systems on their networks in the hope of improving the customer experience and driving efficiency. Guildford’s Safeguard Buses is just one to pilot a contactless ticket called MultiPass, pioneered by TEDIPAY. Using beacon technology, it automatically works out the best transit fare for the customer who touches their bank card in and out of the system.


London’s Oyster card turns 15

Last month Cubic, the company that introduced the Oyster card to London, celebrated its 15th anniversary. Although revolutionary at the time and hailed as the pace-setter in contactless payments, the company is looking to replace its current technology and is thinking of new ways to make ticketing easier. Reported in the FT, Cubic is said to be investigating how to integrate public and private transport management so the customer only pays once, a system that is known as Mobility as a service (MaaS).


Whim App

MaaS is a day to day reality in Finland since the roll-out of Whim, an app created by local company Maas Global, in Helsinki in late 2016. Whim brings together public transport, taxis, city bikes and car-sharing services. You can pay as you go, subscribe for €49 a month for unlimited public transport and city bikes, or pay €499 a month, which includes unlimited taxi rides of up to 5km and car-sharing.


Public-Private transport deal

Uber has ventured into a similar deal with Masabi, the global leader in mobile ticketing. Very soon Uber customers in London and New York will be able to book and use Masabi customers’ transit tickets within the app, allowing for seamless transfers from ride-sharing to public transit services for convenient multi-modal journeys. The two companies are said to be working together to roll out the integration program to new cities in the coming year.


ORM's view

The customer demand for mobile and contactless payments is plain to see, driven by their need for flexibility and convenience. However, it still remains largely an urban phenomenon. Here, metro boundaries allow organisations to package up multimodal travel services more easily and as a result of better infrastructure, they can track traveller activity.


Unfortunately, in the UK at least, cash still remains king for travel outside cities, meaning travel companies often don’t know who their customers are and can’t create a personalised journey experience for a single mode of transport, let alone multiple modes. The ability to instantly recognise travellers as they get on or off any mode of transport and match this information to a customer account will be the key to giving travellers the personalised service they crave across a national network. One single payment for the end-to-end journey will always be the ultimate goal for the customer; attributing revenue between different travel providers still remains the greatest challenge.