Pay as you go: a good 2016 for payments in the transport industry?

Row of black cabs

It’s building up to be an interesting year for payments within the transport industry. PayPal is working with TfL to roll out mandatory contactless and card payments in London’s Black Cabs, and The UK Cards Association has published its framework for contactless travel.

 

Black Cabs to go contactless

Starting with the more definite example of what sort of year payments in transport is in for, Transport for London has selected PayPal’s all-in-one payment processor, PayPal Here, to be one of several payment providers for Black Cabs. This means that from October 2016, London taxis will be able to accept payment via Apple Pay, contactless and the old-fashioned way of Chip-and-PIN.paypalhere

To kick-start card payments in Black Cabs, PayPal is running taxi advertising with Ubiquitous, the taxi’s advertising company. As the picture below shows, some Black Cabs will advertise the payment technology, as well as have the campaign presented on the bottom of the tip seats inside the cab.

Rob Harper, director of Mobile Commerce, PayPal UK commented, “There are more than 22,500 Black Cabs in London, offering a first class service throughout the capital. However, more people expect to be able to pay by card when they grab a cab, and are frustrated to find that many taxis don’t take cards.”

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“In 2016 we will see London’s Black Cabs catch up with the rest of the world by offering card and contactless payment as standard,” said Andrew Barnett, managing director of Ubiquitous.

 

But it’s not just cabs that will go contactless

Following on closely behind London taxis are not only other modes of transport, but other cities in the UK also. The UK Cards Association has published a new framework that “enables transport operators across the country to implement contactless payments on local pay-as-you-go journeys and provides a consistent experience for travellers”. It was unveiled on Tuesday at a parliamentary reception.

The organisation has said that rail operators have provided an additional tranche of funding for a joint project between the card and rail industry exploring how contactless cards and devices could be associated with long-distance train tickets or season tickets, so passengers no longer have to print out tickets.

The new framework explores how contactless cards can be used to pay for pay-as-you-go journeys including bus journeys, single trips, combined travel, similar to the system currently in  place in London – ones which is proving to be highly successful.

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“Payment cards play a key role in our lives and we believe this work contributes to making public transport more convenient for millions of passengers. Our collaborative project with the transport industry aims to transform the way customers pay for their travel and supports the Government’s objectives,” said Melanie Johnson, chair of The UK Cards Association.

“This framework sets out how contactless payments can be used to support any journey, whether a single bus ride or a cross-country trip,” she added.

The Transport Minister, Andrew Jones, described smart-ticketing as a “revolution” that is helping build a “modern, affordable transport network that provides better journeys for everyone”.

 

Tap-and-pay will be king

It may have become evident that in these two examples of payment adoption, contactless is the big game. Whilst the acceptance of Chip-and-PIN debit/credit cards is crucial, especially since it is still the most popular non-cash method, it is clear from the emphasis everybody has placed on NFC technology that tap-and-go payments are everyone’s endgame. This is important because it essentially cements the technology’s position as the most popular way of paying – not instantly, but like cement, it won’t take long to settle.

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Within contactless, cards will obviously be the biggest beneficiary but the integration of PayPal Here into Black Cabs will do wonders for mobile payments also. One of the most important reasons for Apple Pay‘s low levels of adoption in London was that people had no idea where they could and couldn’t pay using the tech. By opening up the service to what are essentially another 22,500 payment points, it acts as another incentive for people to switch over from older payment methods to mobile.

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