As pandemic-related restrictions continue lifting in many regions, PTOs are working hard to bring riders back onto public transport systems. But not everyone feels comfortable about joining long queues, handling cash, or touching ticket machines. That's why the easy, safe, secure ways to pay offered by digital payment systems — both closed and open loop — can play an important role in growing ridership.
In addition to card payments, options may include seamless non-physical ticketing, or the ability to pay securely inside and outside the transit network. Apart from removing the need to use cash or ticket machines, these digital payment options help to shorten queues and cut boarding times, which is another way to enhance the passenger experience.
As in other areas of our lives, many of us now expect choice about how we pay for public transport, as well as a flawless payment experience. It's why both closed-loop and open-loop solutions are gaining momentum alongside traditional paper ticketing systems.
Many open-loop systems originally designed around EMV contactless payments have evolved to allow tap-to-ride with digital wallets — and, by extension, smartphones, and smart wearables. The convenience of simply tapping to ride with the same bank card or smart device we use to make other routine purchases simplifies the experience and so helps make it more appealing. And for many riders, removing the need to join a queue or use a ticket machine can help to overcome lingering health and safety concerns.
In parallel, closed-loop systems are adding more everyday ecommerce capabilities so that riders can:
Top up their travel cards using digital payments
Buy app-based tickets which use a variety of fare media including QR codes
Set up recurring billing within account-based ticketing programmes.
To keep pace with payment evolution, PTOs need to make payment acceptance simple. Ideally, a PTO will have a single, secure connection to an open, flexible payment platform built for the future that can route transactions directly to the schemes, and send payment capture files straight to acquirers.
Such a platform-based approach allows a PTO to expand its operational reach and adapt to any type of payment it wants to accept — using that single connection to interact with the ever-growing community of transit-compliant acquirers. The benefits include:
No requirement for individual connections to each acquirer
A reduction in payment infrastructure investment
An open foundation to accept payments from riders using any card scheme, currency or payment type.
Of course, as payment evolves and PTOs open up to more payment types, they may also open themselves up to more risk. The surge in friendly fraud, card testing using low-value top-ups, and account takeover for annual passes means that — for closed-loop systems in particular — end-to-end security must be enabled to safeguard potential revenue streams, as well as riders.
This is underpinned by PCI DSS compliance and ultimately calls for greater insight and better protection. With the right rules in place when deploying fraud management tools and services, PTOs may see annual savings as well as a reduction in chargeback rates — while shielding customer data, reducing reject rates, and increasing the amount of fraud identified.
For open-loop solutions, evolution spearheaded by Cybersource allows tokenization of the 16-digit card number as a passenger taps to ride. This makes payment seamless and secure and helps facilitate PCI DSS compliance for PTOs as they don't need to store sensitive payment card data. Beyond these great security and compliance benefits, tokenization also opens the door to a world of potential innovation in terms of passenger loyalty programmes.
Working with partners who understand the challenges of mass transit ticketing and payment acceptance can help ensure a successful deployment that meets riders' expectations and enables the next generation of urban mobility payments - helping to protect the PTO's reputation and revenues.
Fernando currently leads global transit and travel solutions at Cybersource, driving industry strategies and go-to-market activities. He has 25+ years’ experience in global technology organizations leading various regions, business units and vertical segments and serving a wide range of industries including banks, fintechs, government, travel, retail, digital, telco and others. He is a consultative board member at NGO organizations and holds BS in Electronic Engineering and MBA from University of Sao Paulo with extensions in Cambridge (UK), Lyon (France) and China.
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