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Skift Take

London’s contact-less payments system is already embraced by many international travelers who want to quickly get where they’re going. It doesn’t make sense for travelers to buy a card they may only need a few times and tapping credit cards and Apple Pay on card readers solves this problem.

— Dan Peltier

London’s transportation network launched contact-less credit card payments and Apple Pay during the past 18 months and they’ve since accounted for 350 million trips–many of them international travelers using the system.

Travelers and locals riding the London tube, for example, bought Oyster cards at vending machines when that card first rolled out in 2003 but that step has been eliminated for travelers with credit cards containing chips or Apple Pay. With the contact-less system, travelers riding the tube can take out a credit card or their iPhone, tap it against a contact-less card reader and enter the station without waiting in line to buy a ticket. Travelers use contact-less cards and Apple Pay the same way as the Oyster card but the process is faster as they don’t need to buy a card they may use only once.

Credit and bank cards from more than 80 countries have been used on Transport for London’s contact-less payment system since its introduction, said Shashi Verma, Transport for London’s director of customer experience, the agency overseeing London’s public transportation. More than 17 million international travelers visited London in 2014 and used the city’s extensive transportation network of the tube, trams and busses — one of the world’s busiest — and want an experience that mirrors how they pay for other aspects of their trips, Verma said.

“Speed was critical to us…when you walk into a coffee shop when you’re abroad you expect your [credit and bank card] to work there,” Verma told Skift. “That is exactly the experience that we’re now offering. You can arrive with your card or smartphone from anywhere in the world and there’s no need for you to buy a ticket, no need for you to get an Oyster card.”

Nearly 25,000 new cards are used on the network every day with contact-less payments accounting for 27 percent of all pay-as you-go tube rides and rail services, according to Transport for London data. Between 30 and 40 percent of rides paid for using cards or Apple Pay are for one-time trips and reflect common travel behaviors. About 7,000 new mobile devices use the system every week and since July 2015 more than 3.2 million rides have been made using mobile devices. All Oyster card vending machines have instructions for how travelers can use the contact-less payment system.

“Many international travelers are here just for the day and they need a mechanism to travel around the city just for the day and a lot of our ticket sales are dominated by people who are just in London for the day,” said Verma.

Verma said his agency is in active discussions to sell its contact-less payments technology to rapid transit agencies in five other global cities and in early stage talks with about 40 others.

“Contact-less bank cards are very prevalent in the U.K. and the vast majority of contact-less transactions are coming from cards, not from phones,” said Verma. “Apple Pay and other mobile payments are still relatively small in comparison…but [both contact-less bank cards and Apple Pay] are showing strong growth. Right now mobile payments are growing slightly faster than the contact-less cards.”

“To be clear, we’re agnostic about what form of payment people use. We’ve opened up the [Transport for London system] to all forms of payment and provided that they comply with payment industry standards we will accept them…Even as early as 2006 we had already started the search for the system that would replace the Oyster Card system at some future date. We knew we would have to produce something new because we invented the Oyster card which at the time was a first for mass transit systems.”

Tags: apple pay, london

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