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Modernizing Global Transit Payments Systems End To End

Riding public transportation in a foreign city is always something of an adventure, especially if one can’t speak or read the local language. Such was the experience of Visa Senior Vice President of Global Seller Products Jason Blackhurst in trying to take public transportation during an overseas trip, ironically enough, to meet with a local transit administrator. As he told Karen Webster in a recent conversation, he couldn’t figure out the ticketing system and because he didn’t speak or read Arabic, he could really inquire about it.

“I could not figure out the ticketing system, because I didn’t understand the language and I literally had to take a cab to get there, and I am the person representing global travel for Visa,” Blackhurst said.

On the upside, he did have a good story to tell when he eventually got to his meeting and a clear way to illustrate one of the key advantages of digitizing public transportation — the experience for the consumer is easily navigable because it’s the same whether they’re getting on a train in London, Rio De Janeiro, Bangkok or Moscow. Or as of about two weeks ago, a bus in Monterey, California — as the city became the first transit agency in California to offer bus riders a contactless payment option.

An exciting experience, Blackhurst noted, because the addition of contactless payments to the busing system is one of the rare project opportunities to actually create a win for everyone involved in a public transportation ride: the driver is no longer delayed by passengers counting out exact change such that their route is always running behind, the consumer is no longer forced to carry a paper ticket with an unknown balance on them at any given moment and the municipality sees its transportation getting greater use by the public, particularly by tourists using the system during off-peak hours. Even the planet gets a win as public transport bus systems upgrade to contactless payments — as buses are no longer idling for 15 minutes per stop as riders count out their change, they aren’t dumping nearly as much CO2 into the atmosphere. Shaving a few minutes off per stop, he notes, actually constitutes a massive carbon deletion from the atmosphere.

Having worked in payments for a long time, he said most projects involve a sacrifice of some kind such that someone has to give something up. This is the rare opportunity, he said, where that isn’t the case and they get to work on something “where it’s good for the consumer, it’s good for the operator, it’s good for the network and it’s good for the environment.”

And, he noted, good for the advancement of the payment ecosystem as a whole.

Rewriting Consumer Habits 

The benefits of digitizing transportation payments, Blackhurst said, tend to ripple outward from the direct benefits of the upgrade. The upgrade to contactless, he noted, pulls cash of the system which in turn pulls crime out of the system, something Visa has seen direct evidence of in Brazil where contactless public transport has gone into effect in Rio and San Paulo and drivers are no longer targets because they are no longer carrying large reserves of cash on them, and people at bus stops are no longer being robbed for their bus fare. Handicapped riders, he said, see their experience improve as well as they are no longer fumbling for cash to ride, and are able to tap and go far more easily.

And, as has been observed from the start, digitizing payments in a use case like transportation tends to motivate consumers toward ancillary digital purchases on their way — for coffee, breakfast or a magazine to read as they ride. It’s not so much as a matter of training consumers to digital, he said, so much as it is about “about getting people to understand how contactless works,” and transit plays a key part in that education.

“When somebody uses contactless for transit they tend to start adopting contactless more in their everyday life,” he said. “And so we see a natural run-on where they might’ve used cash for coffee or something like that and they actually start using their card because they’re already familiar with the convenience of it and the way it works.”

711 Projects (And Counting)

The pandemic may have slowed down public transportation, but it did very little to dim the enthusiasm of transport operators around the world from Moscow to Rome, Rio and Monterey, of upgrading their transport infrastructure. If anything it pushed it ahead more aggressively as enthusiasm rose for contactless payments and what they can enable.

It is more than just an easier way to pay, Blackhurst said. Visa has built something called fair capping into the system for operators to make it more accessible to lower-income riders. The most efficient way to purchase transport tickets, he noted, is to buy a monthly pass at a discount — something outside the price range of low-income riders, who are then forced to pay more because they pay daily. Fair capping, Blackhurst explained, is an option Visa has opened for transport operators that allows them “to basically allow a person their pay as they go and then once they pay for a certain number of rides, offer up rides that  are free for the month,” or whatever other price break they want to put into place.

Because, he said, the end goal of improving payments in transportation isn’t actually about the payments themselves, for the operators, it is about finding a way to leverage digital technology to upgrade the entire riding experience for all parties involved, providers and riders. To date Visa has 469 transportation projects live and running, and 711 in the pipeline in development, waiting to be deployed. Some of those projects are brand new, he said, while others are expansion projects that will see contactless movement from trains and subways into bus systems as well. And Monterey, he said, is just one of what will be many announcements in weeks and months to come as more transportation systems of all sizes around the world are looking to modernize using payments as a cornerstone, and Visa rushes in to aid their efforts.

“We’re operating as a network of networks,” he said, “and that’s really a big driver for us where we can enable the transit network by leveraging the network that we’ve already built and spent time, money and effort on.”

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