[Dave Birch] An e-letter arrives from forum friend Shasi Verma, Director of Customer Experience at Transport for London (TfL) and an all-round jolly nice chap. He says…

I am writing to let you know that we are introducing contactless payment tomorrow (i.e., today,Ed.); this will initially be available on any of London’s 8,500 buses.

[From TFL – Service Changes]

Hurrah! This has been long awaited by many in the contactless community, because the relationship between wallet or phone or card and mass transit is well-understood to be central to nudging consumer behaviour. There are a great many people (millions) in London who have a contactless bank card but have no idea what it is or how to use it. Hopefully, they will see other people using bank cards on yellow buttons on public transport and be encouraged to try it for themselves. (At Consult Hyperion, we use the pub for the same purpose, acting selflessly in the long-term interests of key clients.)

London commuters will be able to start paying some bus fares with the swipe of their bank cards this week when transport authorities begin rolling out one of the world’s most advanced “contactless” payment systems.

[From London buses in bank card swipe trial – FT.com]

Well, not “swipe” exactly. In fact, not “swipe” at all. But yes, the buses have been fitted with the new “open loop” payment terminals. This means that that customers will no longer have to buy an Oyster card for travel but can simply use their shiny new contactless bank cards. When I was chatting to someone about this yesterday, their first question was “why bother – Oyster works fine” and indeed it does, but…

TfL reckon that their overall ticketing system costs them about 14p per £1 collected in fares. Some of this is ripe for reinvention. Product sales alone account for almost a third of costs, and this could easily be halved: monthly and yearly season tickets won’t go away for a long time, and since they are efficient products to sell, there’s no reason to stop them, but most of the ad hoc non-commuter trips could be shifted to open products.

[From Slick transit]

It’s cost a lot of money to upgrade TfL’s infrastructure and all of the readers at something like 20,000+ gates, but it will save them money in the long term. And what’s more, foreign visitors with contactless bank cards will be able to jump straight on a bus without having to get into gigantic queues at Paddington or Victoria to buy and load Oyster cards. And never ones to take corporate PR as as substitute for reality, on your behalf we ventured into the freezing London morning to check it out.

Amex on Bus

Hurrah again! A live, working, contactless EMV bus transaction captured for posterity. The readers already work with psychic paper, of course, so contactless bank cards are old technology really (!) but we’re still very excited about this because it is a project that Consult Hyperion has been involved in from the very beginning, when we were selected by TfL as their consultants for this project. If you’re interested to learn more about the project, you can listen to two of the key guys on the project (Shashi and Will Judge, who was then head of Future Ticketing) discussing it in one of our Tomorrow’s Transactions podcasts from last year. As well as helping with the analysis and specification of the new system, Consult Hyperion also developed the prototype contactless terminal for TfL to experiment with (we’re a little different from other consultancies because we have a full-time, in-house development team that builds prototypes and proofs-of-concept for clients.

In addition to upgrading thousands of readers around the system, TfL have developed a sophisticated back-office system to manage the mixture of closed-loop and open-loop payments and are now offering that system to other transport operators in the UK. We ran a seminar on this with TfL last year, by the way. This means that in time, ticketing may earn some money for TfL as well as reducing its costs.

The second question I was asked, and I won’t shy away from it here, was “great, I’ll be able to use my phone to jump on the bus”. Unfortunately, for reasons that are too technical (and too boring) to go into here, the only NFC/card handset combo on sale in the UK today, the Orange Galaxy S3 QuickTap, doesn’t work with the TfL bus readers. So if you want to amaze your friends (or are too lazy to get out a wallet) and jump on a double-decker using a flick of your smartphone, your better off getting yourself a Barclaycard PayTag and sticking it on the back. Here is an exciting photograph of such an installation, taken in London this crisp winter morn.

Sticker on Bus1

To make the simple tap-and-go work for millions of consumers taking millions of bus rides, reliably and securely, is very complicated. To hide all of the complexity from consumers and make the tap work in a few hundred milliseconds was a tall order. But they’ve done it, so well done TfL.

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


  1. Since not every TfL customer will have (or want to use) a contactless card, Oyster will have to stay, in one form or another. Is such a dual system cost-effective?

    Also, I couldn’t find the word “ITSO” in the article (or is it best to leave that fire fuel alone for now?)…

  2. Dear Dave,

    I would appreciate if you add some details about back-office system, collection of transaction data, transaction processing (aut., clear. and sett.), specialities if exist like aggregated model of transaction processing. Thank you

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