Public transport is ditching cash—but here’s why that’s ok

As bus systems experiment with eliminating onboard fareboxes, for example, operators will need to expand their fare vending networks—which include street-level vending machines as well as national chains like CVS and local businesses like check cashing centers. This is already happening in New York City, which has the largest public transit system in the country.

The city is transitioning from its paper-thin, magnetic-stripe MetroCards to OMNY, a contactless system that uses near-field communication. OMNY supports “open-loop payments”—a special card or app isn’t needed to get onboard. Instead, you can simply swipe your existing contactless credit or debit card or wave a digital-wallet-equipped device. OMNY also offers a “closed-loop” option in the form of a physical card that can be reloaded with cash.

In a statement, the city’s Metropolitan Transportation Authority said that it has “greatly expanded” its retail network since OMNY cards became available for purchase this past fall, citing nearly 1,000 partners selling and reloading them. It aims to quadruple that number once the system is fully activated. 

It’s easy to see the increased use of mobile payments as counter to the egalitarian ethos of public transit. But the technology can open up access to systems that would otherwise be difficult to navigate. “I struggle to think of a product that is more challenging to purchase when you come to a new city than public transportation,” says Joshua Schank, managing principal at InfraStrategies and a senior fellow at the UCLA Institute for Transportation Studies. 

Schank, who created the Office of Extraordinary Innovation at the Los Angeles County Metropolitan Transportation Authority in 2015 and headed it until this past January, sees the ultimate goal as payment integration between mobility systems—bike-shares, scooters, buses, trains—across cities as well as within them. But one way or another, contactless, open-loop payment will likely play the role that cash did in the early days of public transit: it will be accepted everywhere. 

Rachel del Valle is a freelance writer based in New York.

Source: MIT Technology Review

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