‘Tap-and-ride’: How public transportation is making room for contactless payments

Like other industries, public transportation is becoming more dependent on contactless pay. The mobile ticketing market size is predicted to go from $350 million in 2018 to $1.7 billion in 2025. In the US, 80% of the cities with plans to implement mobile payment methods in public transportation are doing so for the first time.

The public transportation industry is undergoing digital transformation at lightning speed, said Tokhir Abdukadyrov, director of O-City, an automated fare collection solution that operates in 130 cities globally. The pandemic has made people more nervous around crowds and less trustful of public transportation. Implementing contactless forms of payment could be the only way to make passengers feel comfortable again.

“Beyond the various lockdowns around the world, which have greatly reduced traffic and thus had a significant impact on revenue, passengers have further restrained their movement due to a lack of trust in public transport, with passengers wanting to avoid crowds and any kind of touch point when it comes to ticketing and hopping on a train or metro, all in line with hygiene concerns,” said Abdukadyrov. “For these reasons, many public transport operators and ministries of transport around the world have come to realize that contactless payments are no longer just nice to have but are actually vital to their industry.”

And just like restaurants are turning to QR codes to become more contactless, public transportation is turning to open loop payments to become more contactless.

This content is available exclusively to Tearsheet Outlier members.

Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account