U.S. Bank takes a closer look at transit open tap-to-ride payments

Author: Ana Stanca

Demand Generation Leader, Enghouse Transportation

U.S. Bank believes the $1.2 trillion infrastructure Investment and Jobs Act signed into law last year will be a boon for contactless tap-to-pay transit payment systems.

In an article published in Government Technology last month, U.S. Bank says the massive infrastructure legislation includes language for the development of open loop fare payments via credit card reader, including contactless technology, for safety, sustainability and accessibility reasons.

Otherwise known as Eurocard, Visa, and MasterCard (EMV) payment systems, the tap-to-pay systems are replacing “outdated fare collection systems, prepaid rides, confusing kiosks, paper tickets, proprietary transit-specific apps, and handling cash. Open loop contactless transit solutions allow passengers — whether frequent commuters, locals, or visitors — to simply use their existing contactless credit card, debit card or mobile wallet to tap to pay for a ride in less than a second.”

U.S. Bank says that in addition to removing cumbersome payment transactions, tap-to-ride programs typically reduce costs for passengers and operators.

Transit riders want to see open-loop EMV contactless payment systems introduced to the U.S. market.

In Visa’s Future of Urban Mobility study, 88 percent of riders surveyed expect to pay with a tap on trains and buses. The report also states there are more than 700 U.S. transit projects underway that include the introduction of contactless tap-and-go payment methods.

U.S. Bank pointed to three reasons legacy closed loop payment systems are impeding the passenger experience and adding costs for operators:

Ticket kiosks – Self-service kiosks are often a chokepoint for transit agencies. Queues can build up, resulting in missed connections. Confusing interfaces, too many fare choices and language barriers often result in multiple attempts to purchase a ticket.
Prepaid tickets and proprietary transit apps – While frequent commuters often purchase transit plans and load electronic tickets onto a proprietary app on their smartphones, occasional riders and visitors often find themselves in a state of confusion.
Cash handling – Cash payments, whether via human or machine, are slow, inefficient, and open to fraud and theft. Additionally, they slow boarding time, which leads to longer transport times.

Speaking of innovation in public transportation, U.S. Department of Transportation Secretary Pete Buttigieg stated that the agency is “working very hard to make sure that ‘innovation’ isn’t just a buzzword that loses its meaning, but a means to an end.”

U.S. Bank says the benefits of open loop contactless payments include:

Fast and convenient – Passengers use their own preferred payment method to travel immediately, without having to understand the details of local fare structures or tickets, and without having to stop at a kiosk, buy a paper ticket, download an app, or preload a proprietary stored-value card.
Cost reduction – A fast and convenient payment alternative lessens the dependency on cash, boosting overall productivity. The technology behind tap-to-ride solutions allows a passenger’s daily trips to be bundled into one transaction, which eliminates multiple authorization fees for operators. Passenger fare caps and discounts can be automatically calculated and applied.
Secure and sustainable – Shifting from physical tickets and cash enhances security and reduces fraud. Transit operators benefit from the high security standards employed in EMV payment cards. Plus, reducing or eliminating paper tickets, cash handling and idle time at stops is good for the environment.

Enghouse Transportation is one of the leading software companies working to bring open loop contactless EMV payment systems to North America. The company, established with transit systems in the Netherlands and Central and Eastern Europe, is now expanding to the U.S. market. “Enghouse Transportation brings some clear advantages to the table,” said Toofan Otaredian, managing director. “We have the agility to host multiple fare plans and business rules associated with the various public transit agencies and operators, and our software solution can seamlessly integrate with other systems. In addition, we offer a short time-to-market to get open-loop up and running and our pricing is more than competitive against other solutions,” he added. To learn more, download our solution brochure: “Enghouse Transportation transit software: A proven solution at a competitive price”

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U.S. Bank takes a closer look at transit open tap-to-ride payments

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