Another option might be to use Oyster cards in shops. It does seem odd to me that when I'm on an Underground platform and dying of thirst, the Coke machine doesn't take the one currency that every single person on the platform actually has: Oyster. In other regions, this is seen as being a natural development of widespread mass transit contactless systems. Taiwan is following Hong Kong and Singapore in allowing the transit e-purse to be extended out into retail.

The EasyCard, a contactless smartcard system for use on the Taipei MRT system, will soon become an electronic purse that can be used to purchase small-value items… The new payment system, which will allow up to NT$10,000 (US$312.50) to be stored in the card, will be put in place a year after the Legislative Yuan passed an amendment to the Act Governing the Issuance of Electronic Stored Value Cards that paved the way for the new payment vehicle.

[From Electronic purse expected to become operational in March – Taiwan News Online]

It's clear that, as we all know, transit is the vanguard for electronic money and therefore it provides a unique opportunity to drive cashlessness. But that doesn't necessarily mean that transport operators should get in to retail payments: the alternative path is to let retail payments systems operate in transport. This is the path that London has chosen, as noted above, and is true in many cities around the world. Transit operators see ticketing as not part of their core business, which is running public transport. If other people can provide the ticketing solution, then fine.

Toronto transit officials are not the only ones keen to get out of the business of collecting fares and phase out closed payment schemes. Their counterparts in London, New York, Chicago and some other cities are moving at varying speeds toward open-loop payment.

[From Canadian Transit Card Operator: Not So Fast to Open-Loop Payment | NFC Times – Near Field Communication and all contactless technology.]

There's another reason, though, why I think that this trend is gathering momentum. It costs money to stay in the security arms race: the ticketing systems (especially as they move into the world of mobile phones) need to be sure that the activities of fraudsters do not impact revenue. When the transport operator has to spend money on continually upgrading and enhancing systems for revenue protection purposes, that's money that could be better spent. It's not always about counterfeiters and criminals, by the way, sometimes it's just people gaming the system.

Determined token hoarders will have to buy their tokens one by one, at token vending machines, and that’s not the only step the Toronto transit bosses are taking to fight stockpiling. The Toronto Transit Commission (TTC) has now introduced adult paper tickets with an expiry date on them. “The TTC won this,” said Angela Leung, an Ontario College of Art and Design student who amassed over 100 tokens during the 2007 fare increase and had the same game plan for the new year.

[From Excalibur Web edition – Extinct bus tickets temporarily reappear to combat token hoarders]

If payment systems spend the money to develop fast, secure new payment mechanisms (using contactless cards, phones, stickers and who knows what else) then the transit operator doesn't have to. This will be the sort of thing that will be discussed at the excellent Transport Ticketing 2011 conference in London on 25-27th Janaury 2011. I thought this was an excellent event back in January 2010 and so I was very happy to be invited to chair the panel on mobile devices at next year's event.

These are personal opinions and should not be misunderstood as representing the opinions of
Consult Hyperion or any of its clients or suppliers

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