Many people travel to explore new places, people and experiences – but likely not to navigate for ways to purchase transit tickets at foreign destinations, often in languages they vaguely understand. Getting around at a destination can be safe, fast and convenient with an open and interoperable payment system that accepts payments from credit, debit and prepaid contactless cards, as well as mobile devices from all around the world.
With its long history in public transport, London is a good case study of how this can be achieved.
London system for reference
London was among the first international metropolises to roll out city-wide contactless payments for cards and mobile devices. Transport for London implemented open, interoperable payments on London buses, and underground and rail services in 2012 and 2014 respectively.
Jeremy Itzcovitz, Business Analysis Manager at Transport for London, said it was a timely decision to introduce contactless payments in a city like London.
“Our traditional ticketing system had two main problems. First, stations were usually packed with people buying tickets. Second, for every pound of revenue we collected, we spent 40 pence in that pound collecting that revenue. Cost of revenue collection was something we needed to look out.”
Since introducing contactless payments, Transport for London saw more than 1.7 billion journeys made through contactless cards and mobile devices across the capital, serving on average 17 million journeys a week. Passengers from over 120 countries and places have used contactless payment, of which 17,882 passengers used contactless cards issued in Hong Kong.
At the recent “Payments in Motion: Transforming Transport in Hong Kong and Macau” forum hosted by Visa, a team of experts discussed the use of a contactless fare payment system to tackle urban mobility challenge. Among the speakers were representatives from Transport for London, Hong Kong government, and other industry leaders.
Other than London, New York, Toronto, Sydney and Milan have successfully implemented open contactless payments system for mass transit, providing seamless, standardized friction-free commuting with contactless payments. With Singapore slated to implement open payments in public transport, Hong Kong remains one of the last global cities still using a closed fare payment system.
HK ripe for transport payments overhaul
Caroline Ada, Visa Country Manager, Hong Kong and Macau, says: “Hong Kong is ripe for a major overhaul in payments, particularly in transport. Contactless payments are widely used in Hong Kong with two in five face-to-face Visa transactions being contactless. The city also has the highest penetration of Visa contactless payments made via mobile wallets in Asia Pacific. We believe an open payment ecosystem with multiple solutions for customers to choose is the best way forward for an international financial hub like Hong Kong, as has been shown in other leading global cities.”
The success of any transit payment option is predicated on tapping into existing consumer expectation and familiarity. In a recent Visa market research, convenience and ease of use were identified as the top criteria most people (87 percent) look for when choosing to use electronic payments.
Legislative Council member Charles Mok has said that Hong Kong should step up efforts to achieve smart mobility. “In the last couple years, you do see that in retail, they really provide different options on payments. Why can’t the same practice be adopted in transit?” the lawmaker wondered.
“The government announced a smart city blueprint back in July last year, I always think that when we talked about smart city, smart mobility should be on top of the agenda,” added Mok.
There are various views on what kind of payment method in an open ecosystem can serve Hong Kong commuters best.
Is it QR code payment, which has served some quarters well, particularly in certain retail segments, the right method? Or will Hong Kong fare better with contactless payments given the high adoption rate in the city?
As major cities like London, New York and Singapore migrate to open-loop contactless payment, perhaps Hong Kong commuters will be given more than one option to pay in the near future.
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