The past few years have seen an explosion in public transport fare payment technology. Most visibly, smartphones are offering options that did not exist before. The earliest smartcards, such as Hong Kong’s Octopus and Seoul’s Upass, date from the 1990s, and this technology has recently become more widespread, with features that were not available 15 years ago. Services are increasingly integrated through online payment and via links between smartcards and credit cards.
It took several years for the previous generation of advances in smartcard technology to catch on. If the early adopters had not included former British colony Hong Kong, it is likely that London would have taken longer to develop its Oyster card.
Today technology is advancing in many cities, but this tends to take place in isolation with cities apparently reluctant to adopt common systems. The features detailed below are all useful, and in most cases can work together, but an innovator in one aspect can be a laggard in adopting another. Each feature alone helps to make the process of fare payment more seamless, but taken together the different features can simplify and enhance the experience of paying for public transport.
In London the Oyster card does not require passengers to decide in advance whether to buy a day pass or pay for each trip separately, as the software automatically calculates the fare based on what is favourable to the passenger. This works on the basis of a daily cap applied retroactively rather than a daily pass purchased in advance. There is also a weekly cap, but no monthly cap. In contrast, Paris plans to implement a monthly cap in two to three years. In Paris there is currently no cap — in fact, its Navigo smartcard can only load passes, not stored value for pay-as-you-go trave
Multiple ways to pay
A more involved question is how to integrate smartcards with other forms of payment. The Hong Kong Octopus card and Japanese smartcards such as JR East’s Suica are licensed for use as electronic money. They can be used to pay at vending machines, shops, lockers and taxis. This began in the late 1990s and early 2000s, when credit card penetration in Hong Kong and Japan was far from 100%. The transaction fees are lower than for credit cards: 1% for Octopus, compared with about 2% for US credit cards. As the market share of public transport in Tokyo and Hong Kong is very large, nearly the entire population owns a smartcard.
Some cities prefer to do things the other way round: use credit and debit cards as contactless travel smartcards, with the usual fees. London, Chicago and Salt Lake City offer this option, and Paris is planning to introduce it after 2020. However, transitioning to full credit card or smartphone use in lieu of a smartcard is difficult, as not all passengers own either. This is true in the USA in particular. In 2015 only about half of public transport users in Los Angeles owned a smartphone, and a sizable minority owned no phone at all. New York found this out the hard way in its long-term plans to implement a fare collection system based on credit cards, and Chicago and Salt Lake City both have traditional smartcards in addition to credit card payment options.
Open payment using credit cards has the advantage of easier integration, as there is no need for a new card in every city. In Japan public transport services are run by regional private companies, and each company or local consortium has its own card; integration is achieved with bilateral agreements. However, even with a smartcard, nationwide integration is possible, as shown by the Netherlands with its OV-chipkaar
Horses for courses
Implementation of these technologies depends on other choices that each city or region makes about its transport fares. SMS payment is easier to implement on metros with flat fares or only a few zones, such as in Helsinki, Praha or Stockholm. Passengers can send by SMS a simple code for flat fares; distance-based fares might require passengers to send a more complex SMS, making mistakes more likely.
Anonymous smartcards typically have strict limits on how much money they can store. Suica is limited to ¥20 000, for example. This makes it harder to implement a monthly cap in areas where monthly passes are expensive, such as London.
Most cities can still implement all or nearly all of the above features, subject to some questions. The big decision is whether to use credit cards as a form of open payment, or to use an internal card but then license it as anonymous electronic money for small purchase