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Open Payment, the Future of Public Transport

Or how Open Payment will simplify the user experience ?

You may not have heard of it yet, but Open Payment is already part of Londoners’ lives since 2014. So what is Open Payment?

Open Payment

Open Payment is a concept that is part of a package called Account Based Ticketing. It refers to a way of using public transportation and traveling without a ticket. Access to these services is no longer anchored in a subscription card or a ticket purchased at a kiosk. Instead, users can use their payment card, phone, connected watch or any other connected objects via contactless technology (NFC) to access these services.

This service, which is not that new, has many advantages:

  • In France, the amount payable in contactless has increased from 30€ to 50€ to reinforce barrier gestures. This evolution has accelerated the growth of contactless payments by 128% from June to September 2020 (vs. 74% in 2019)(source : L’observatoire CB). Thus, we can see the adoption of this method of using payment cards. Open Payment is a continuation of this use, allowing users to approach their payment means to directly access public transport.
  • In continuity with what we said in the previous argument, the use of the payment card makes the existence of subway tickets useless. If there is no longer a need for tickets, there is no longer a need to buy one or reload one’s card at a terminal: this is a considerable time saving for users.
  • Another problem that is being erased is the subscriptions to transportation services. When the pandemic began, many people who paid a subscription could no longer take advantage of it because no one could get out. Of course, refunds were made, but these had to be requested by the users. With Open Payment, the price is adapted to your use of public transportation. Thanks to your payment method, you are identified and billed according to whether you have a pass, the number of trips made, the distances traveled and other factors, thus guaranteeing the best price. This can also help to avoid many administrative procedures, both for users and for public transport services.
  • As you have already noticed, from time to time, the ticketing machines break down and the counters are quickly overwhelmed to get a ticket. This requires maintenance and human resources, and money, to ensure that the service can continue to operate. With Open Payment, ticketing machines are no longer needed and the counters are no longer overwhelmed. The only maintenance needed is that of the gates to access public transport. This saves time for users, but more importantly, it saves money for transportation services.

There are other benefits such as reducing opportunity fraud or improving the image of transportation services offering innovative tools. Other benefits will emerge as new uses for Open Payment emerge.

How does it work ?

How does Open Payment work? This is a legitimate question that many consumers are entitled to ask themselves. Currently, without going into too much detail, the information, such as the journey and the duration for example, is contained in a ticket or a subscription card. It is a closed system, which cannot be used outside the network for which it is intended.

With Open Payment, the user brings his means of payment close to the gate, generating a token. This token contains the user’s information and is sent to a back-office server. These informations can be the location of the transport access, date, time, etc…

Each time the user uses his payment method to pass through a gate, a new token is generated and sent to the server. At the end of the day, the collected data is analyzed and a personalized tariff is set up.

What is the status of Open Payment?

As you have seen, Open Payment is an innovative service with many advantages and dedicated to changing consumer habits. This service has already been implemented in London since 2014. Many cities have followed suit, notably in Dijon, France, where Open Payment was implemented in March 2018. In 3 months, 170,000 “contactless” journeys have been made for a population of approximately 155,000 inhabitants.

Open Payment has taken root in many countries such as the United States, Japan and Brazil where the inhabitants of Rio de Janeiro no longer need to buy metro tickets. According to a Masabi survey carried out in 2019, 24% of professionals working in transport agencies said they were researching Open Payment. Another 24% is planning to deploy this service.

Open Payment, whether for public transport or other services, has a bright future ahead of it. This innovative service will undoubtedly improve the payment experience for consumers.

This is a subject to follow and that will evolve in the coming months. This subject is part of an important challenge: simplifying the payment process for consumers. It is essential to accompany users and offer them new and innovative payment methods, while ensuring that those who offer these methods have the means to secure and monitor their revenues.

As mentioned in the article, Open Payment is set to develop beyond use for public transport services, and these are opportunities to keep an eye on. By doing so, Market Pay is keeping abreast of developments and will be able to propose innovative solutions.

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