Imagine you’re traveling abroad. You want to get to another side of the city using its metro system, but it’s easier said then done — the ticket machine has strange knobs and buttons, and they might be in a different language. All the while, as you struggle to navigate the device and select the appropriate travel mode, locals might be waiting behind you, frustrated as the train they need to catch goes by.
You think to yourself: I wish this was easier. And soon, it will be.
In the near future, riders around the world will be able to access transit systems with just a tap of their smartphones, which can be linked directly to bank accounts for convenient payment. A few cities, like Chicago and London, already have such technology in place, but it’s not yet widespread. That will change soon, according to officials at several transportation companies that focus on mobile ticketing.
“I think it’s closer than a lot of people think. Optimists would say you could have it up and running within 24 months, pessimists would say it might take 48 months,” David deKozan, a vice president of business development at Cubic Transportation Systems, a company that develops public transportation payment systems, told Fortune Monday at the American Public Transportation Association expo in Atlanta.
“This expo happens every three years. Three years from now, that’s going to be the primary focus of the show,” said Conor Kelly, sales director at Passport Inc, a company that develops mobile payment software. “And not talking about it in terms of brainstorming, it’ll be physically here. People will be demoing it left and right.”
Others, like James Gooch, head of marketing at mobile ticketing company Masabi, say the product is already here. His company on Monday introduced a new service for its JustRide app that allows customers to pay for rides using pre-stored funds from a cloud-based account, hence eliminating the need to buy tickets in advance — whether it’s from a metro station counter or another smartphone app.
“Until today, you couldn’t just board the vehicle that you wanted to take,” Gooch said. “You had to wait in line at a ticket office or vending machine. Or you had to download an app. This [new feature] really makes that process seamless of going to a city and just boarding public transportation.”
Masabi’s platform, which the company says operates on more than 30 transit agencies around the world, is compatible with digital wallets, or electronic devices capable of making electronic transactions. Apple Pay, Android Pay and Samsung Pay are common examples that facilitate payments between smartphones and a payment reader without making physical contact using technology called near-field communication (NFC). Transit officials and companies anticipate that NFC, along with Bluetooth and QR Code technology, will make physical tickets, tokens and even smart cards purchased from a vending machine obsolete. And this will have benefits for not only travelers in a foreign land, but everyday riders looking to improve the efficiency of their commute.
“Some agencies are trying move away from smart cards. They’re trying to phase them away because they have no data and it’s very antiquated in that sense,” said Kelly. “It’s a plastic card where you load a balance, you have to find a ticket vending machine to go add more value to it, and it’s cumbersome for the customer. It’s annoying for them.”
The switch from smart cards to smartphones could also has benefits for transit agencies. A research paper from a payments industry specialist at the Federal Reserve Bank of Boston notes that New York’s MTA prints about a 160 million MetroCards a year at an average cost of about $9.5 million annually. And a single ticket machine to print said cards costs an additional $50,000 give or take, not to mention additional maintenance and repair fees.
The benefits of smartphone payments for transit are clear, but there are still challenges ahead. “It will happen. It just takes time, and that’s not so much a function of technology, it’s a function of the nature of transit,”deKozan said. “Government bodies that have long procurement cycles.” But, deKozan says, “It will happen,” and when it does, it’ll make the world a lot easier to navigate.
