Why It’s Critical Public Transit Adopts Contactless Payments

Covid – 19 has compelled us to re-examine our personal lives as well as our business lives. . The last two years have seen fewer Americans on the roads, even as public transit systems played a vital role in transporting essential workers to the pandemic frontline.? The public transportation system is now doing it’s part to help sustain the mobility of our civilization during post-pandemic.

The very nature of socializing, human contact, and mobility has been altered due to Covid-19, and this has made a significant impact on the transportation industry. Today, towns & cities? across the country are easing restrictions. Communities are shuffling towards normalcy with restaurants and public areas opening and state governors tossing out mask mandates. The New York Governor celebrated the “momentous day” for a record 70% of adults vaccinated with at least one dose. All in all, Americans are looking forward to a prosperous summer this year. Amidst this hobble towards how things were, transportation agencies would need to swiftly build capabilities that ensure a safe commute while keeping efficiency and profitability in mind.?

Creating a contactless ecosystem

It’s been a rough ride for transit agencies. Ridership plummeted by 90%, customer confidence plunged to an all-time low, all this, in addition to increased costs in cleaning and safety procedures. The pandemic has jolted transit agencies, which until recently have dragged their feet toward digital transformation. Making the commute safe, quick, and reliable is the only way forward.?

We are seeing more and more agencies moving away from cash, paper tickets, closed-loop, and card-based transactions. The digital ticketing market is expected to grow to $1.7 billion in 2025, up from $350million in 2018. It is estimated that 80% of cities in the US plan to execute contactless payment methods in public transportation.?Transit agencies are also turning toward open-loop payments to create a contactless payment ecosystem. It makes things easy on the passenger and reduces human interactions.?

Public transit systems engage in literally millions of transactions each day. This necessitates that any payment system be reliable, accessible, and firmly secure. Digital ticketing offers this platform, to achieve seamless mobility in public transit. Commuters on a digital platform can transfer from a city bus to the subway or the railroad and later ride a taxi or take the train. All this on just one platform. Changes in operators and ticket charges are all integrated digitally, providing a simple, hassle-free, user experience.?

Contactless payments and Artificial Intelligence (AI)

Contactless payment systems such as e-ticketing, help public transport operators at multiple levels. First, amidst Covid, it minimizes human interactions, which helps alleviate fears and gain commuter confidence. Besides, passengers would also be keen on faster services provided by e-tickets, reducing waiting and boarding time.?

Further, real-time data can help us understand which routes have more passengers and at what time of the day. Covid realities would require agencies to let customers know when to travel, how many passengers are bound toward a destination, and what hours are best suited for a journey, relieving anxieties from people’s minds and gaining new and otherwise reluctant customers.

Companies can also grasp user preferences, and gain marketing data points. Subsequently, they can enhance their service offerings, extend service to other players such as local taxi operators, and expand total customer ridership.?

There has also been an upsurge in innovative tie-ups by public and private transportation companies to close the last-mile gap. Organizations are leveraging digital tools to provide accessible and safe travel, integrating multiple transportation providers and payment ecosystems. Partnerships with private sector companies such as Lyft, Uber, and Via, as well as local taxi vendors, are already underway in more than twenty-four cities across the country. Other services such as parking fees, loyalty cards, and congestion charges are some of the other channels for revenue to attract and retain customers. Partnering with other services with multiple applications connect the passengers with public transport systems more effectively.?

And there’s more for transit companies. Digital ticketing enhances operational efficiency and bottom line results. It helps inspecting agents with secure and fast validations.Unique numbers on the e-ticket help identify lost or stolen cards and officers can respond promptly. Thus, transit companies can reduce operational expenses from the present ticketing system, trim maintenance costs, and control cash flows.

?There has been an unprecedented increase in the number of transport companies across the world that have opted for contactless payment systems. Visa, for instance, which has in the past promoted contactless payment systems, now has more than 400 live projects, and 650 more to execute. Recently, the New York Metropolitan Transport Authority (MTA) migrated to a contactless system, the OMNY, while TFL, London completed its migration four years ago. Many transit companies temporarily suspended fare collections on buses in March 2020, including the NY MTA. They quickly pushed to deploy contactless payment systems, keeping the rider and drivers at a safe distance.?

For instance, the WRTA in Worcester, Massachusetts initiated mobile payment systems, having recognized the advantages of such a system. Accessibility, safety, and equity are seen as their hallmark features. In Sept 2020, “Caltrans’ California Integrated Travel Project, Monterey-Salinas Transit (MST) and Visa partnered to create seamless contactless payment systems when customer surveys revealed commuters would prefer a touchless system to the current ticketing process. The Metro Transit, St.Louis, Missouri was quick to adapt to the changing needs of customers in the pandemic. Metro Transit’s app implemented digital payment, offering passengers the option to plan their metro ride while providing real-time bus location data. Passengers can now plan, track and pay for their ride, all in one single app.

Apart from larger cities, we are witnessing this enthusiasm for contactless payment systems in new and emerging cities such as Mexico City as well.?

Besides, public transit companies around the country would continue to aim to actualize the “Complete Trip” as embodied in the USDOT Complete Trip, although with the new safety restrictions imposed by the pandemic. The goal, as stated in the USDOT is “to enable people to travel independently from one point to another, regardless of the number of connections, transfers, or modes of transportation”.?

Completing a trip without assistance proves to be a challenge for persons with disabilities, low-income groups, and those with age-related impediments. Restrictions in human interaction and social distance would pose even greater burdens on these demographic segments. AI, deep learning, and contactless payment ecosystems alleviate these strains. Covid – 19 has fast-tracked innovation in this respect. For instance, information on real-time seating availability including wheelchair space, automated wheelchair digital assistants, real-time information on passenger numbers would make the commute accessible and equitable.?

We will soon be seeing AI in digital assistants to improve customer experience. For instance, digital assistants would help in performing tasks like securing wheelchair after the passenger boards a bus or checking passenger temperature while boarding. AI is being used to optimize operational efficiency keeping social distancing a priority, conducting predictive analysis of passenger mobility and demand, as well as conducting preventive maintenance operations. Deep learning and AI-backed visual analytics would help in security management and preventative safety.?

This transition from legacy systems towards a digital platform isn’t always easy.

At HubSpire, we partnered with Cubic Transportation Systems for the unique challenges the Metropolitan Transport Authority (MTA) faced. Cubic Transportation Systems is a leading integrator of payment and information solutions and related services for intelligent travel applications in the transportation industry. The MTA boasts an annual ridership of over 2.56 billion, with over 2400 buses, 6400 subway cars, and 5700 buses.?

In my personal association with the MTA, I have overseen the launch of one of the largest New Fare Payment System initiatives, apart from their employee card access management systems and the MetroCard Vending Machine (MVM) Kiosk Implementation project. In my experience, the success in such large transformational change programs is to integrate the new technology with the least disruptions to the current business workflow.?

In partnership with Cubic, we’ve successfully launched the Mobile Inspection/Validation and Sales Devices for the MTA.? Our systems enable travelers to choose the smartest and easiest way to travel and pay for their journeys, while enabling transportation authorities and agencies to manage demand, across the entire transportation network in real-time.?

We’ve been able to explore new ideas, innovate and design the OVD and the OSVD systems. The OVD (Onboard Validation Device) developed for New York City Transit helps validate onboard tickets, while the unique OSVD (Onboard Sales and Validation Device) for Long Island Railroad (LIRR) and MetroNorth, aids sales and validation on all trains. The OSVD application reduces the dwell time of select bus services and improves the revenue/fare inspection & collection for the railroads.?

The MTA’s behemoth network required a frictionless user experience while reducing boarding delays. The OVD and OSVD systems help support the current business workflows while integrating cutting-edge technology and enhancing efficiency and profitability.?

The Path forward

The pandemic has weighed on transit companies to realize that contactless payment solutions are not just a pretty add-on to have, but a vital feature, here to stay. It offers accessibility, safety, security, and ease. Commuters enjoy the ease of planning the entire trip, choosing the best routes, and best options in mobility. The largest metro system in the world, the MTA, has shown the way forward with OMNY, the contactless payment system for New York City buses and subways. The contactless payment system is a definite win-win for commuters, operators, and public transport companies.??

Cities across the country are opening up, and public transit systems play a key role in economic recovery. Covid-19 has inadvertently provided the boost for contactless transit fares. Digital ticketing minimizes interactions, offers quicker access for passengers and provides better operational control and capacity management. Transit agencies need to quickly prioritize and apportion for technological innovation, such as contactless payments.

However, it comes at a cost. Decrease in ridership has dented bottom lines, while uncertainty looms as to when things will return to the way there were. The matter of budget support from state and federal governments also curtails deployment plans.?

Looking ahead, the future of public transit is a seamless one; one that is accessible, safe, and equitable. And a digital touchless ecosystem is the way forward. One could say, a tap and go, is definitely the way to go.?

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Thomas Abraham is associated with Hubspire as its CEO and engagement lead. In his 20+ years of experience in the public transportation sector, he has seen the shift in the public transit payment system from the token to the metro card, to the present day, contactless payment. His in-depth knowledge of the industry brings a strategic outlook while assessing the technology landscape in transportation companies and curating solutions to meet project scope and requirements.?