A majority of public transport operators pay 10-15% of their revenue in collecting fees from passengers in the form of tickets, reports McKinsey. That’s where mobile payments can help public transport companies recover this lost income. On the other hand, it provides customers fuss-free access to public transport.
A mobile payment is when commuters use their smartphone to purchase/use one or more of the following services:
– Mobile ticketing
– Proximity services
– Authentication and access control
There are different mobile payment models prevalent in the industry that includes options such as:
– Pay as you go (PAYG)
– Fixed tickets
The transportation industry is the testing ground for new payment systems. Here’s how mobile payments have helped improve the bottom line of transport companies and the experience of commuters.
According to Mobile Payments Daily, in London alone, commuters undertake 17 million trips per week using contactless payments. Commuters spend a lot of time to reload fare cards or to buy individual tickets. The biggest advantage of using mobile payment systems is that it cuts the amount of time commuters spend waiting in lines to perform these mundane tasks. Mobile payment options allow users to simply tap and go directly on the bus or metro gateline. Each mobile transaction takes only milliseconds saving significant time that users would otherwise spend on physically swiping cards.
Reduces cost and revenue leakages
Transport for London (TfL), a local government body responsible for the transport system in Greater London, England reduced the cost of collecting fares from 14 percent to nine percent.
This significantly improved TfL’s operational efficiency. The commuters only had to use an app to buy tickets from a specific departure to specific destination (or ending station).
What’s driving the mobile payment revolution in transport industry?
The launch of mobile payment and digital wallet services (Apple Pay, Google Pay and Samsung Pay) have helped drive the adoption of mobile payment systems across the transport industry in several countries. Companies in the industry have already adopted this new technology with two models (Apple Pay in London as a pay-as-you-go model in which the mobile acts as a wallet while the second model is the use of smartphone to authenticate and purchase tickets online as in case of Ruter in Norway).
It’s not a matter of if; it’s a matter of when
Universal adoption of mobile payment in transport sectors can be best summed up in one sentence, “it is not a matter of if; it’s a matter of when”. However, to make your transition to a ‘mobile payments’, you need to select the right talent. Pri-Num has helped several customers in ‘digital transaction enablement’.
We’ve helped transporters to become lean and offer their customers the ability to buy tickets via smartphone, pay for parking, and enabled authentication and access control.
Our solutions have helped several industry players like BPS Sberbank, Fido Bank, VTB Georgia, and TBC Bank to implement massive shift in the way people pay for mobility services.
Topics: contactless payments, Digital transaction enablement, Mobile payment