Transit fare projects enable more commerce as cities open up

Transit fare projects enable more commerce as cities open up

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What appears to be a relatively small upgrade to a single train in Toronto is actually the first major step toward transit’s open multimodal future, and how payment innovation can act as both a catalyst and beneficiary.

Toronto’s Up Express train earlier added support for Apple Pay in March, opening up the mobile payment experience to a wide range of travelers. Up Express moves people between Pearson Airport, Union Station and Toronto’s downtown, so the train’s riders will almost certainly be making payments during their trips. The connection between merchant, consumer and transit is part of an effort underway in hundreds of cities globally to help mass transit recover, and boost digital commerce at the same time.

“Contactless is here to stay and it’s becoming standard for face to face engagement, and that’s spilling over to transit,” said Josh Martiesan, senior director of transit in North America for Visa. Martiesan and David deKozen, vice president of business development for North America West at Cubic Transportation Systems, discussed transit and digital payment adoption at PaymentsSource’s CardForum: Contactless event this week.

Toronto’s not alone. New York’s OMNY project, another contactless transit payment initiative, recently reported record usage; the MTA now plans a more robust mobile app to support payments.

Signage for the Metrolinx UP Express airport train is displayed outside Union Station in the financial district of Toronto.


The recently passed $1.9 trillion coronavirus bill sets aside $30 billion for mass transit, the largest government investment in transit in U.S. history. New York’s profile and the government infusion, which could be enhanced by a separate infrastructure bill in the U.S. later this year, adds momentum to transit upgrades that will likely include a greater embrace of open ticketing and payment systems.

Before the pandemic, card brands and mobile wallets were working with mass transit to increase consumer adoption of mobile payments, believing transit to be a habit-forming payment that’s transferable to other transaction types.

Adding mobile wallets and contactless payment cards fosters a single experience for multiple payment types across buses, trains and other transit modes.

“We’re embracing contactless in various forms,” said deKozen, calling the trend “bring your own media,” which replaces the longstanding practice of transit systems issuing payment cards that could be used only on the transit system.

By paying with their own phones or contactless cards, consumers can board transit systems in much the same way they pay for items in stores, or order food from a take-out app. The immediate challenge is to make people comfortable with being in trains or buses again without fearing contagion — and contactless payments helps for transit just as much as it does in stores. The long-term goal is to make transit transactions as seamless as any other digital engagement, according to deKozen.

“We want people to use what they already have in their pocket to use transit systems,” said deKozen.

Cubic has deployed ticketing and payment technology in hundreds of cities, including New York, Chicago, Sydney, and Vancouver, often in partnership with Visa. The card brand, through its Visa Ready for Transit service and other initiatives, has projects underway in more than 500 cities.

“The goal is to improve door to door journeys,” Martiesan said. “It’s become paramount that people pay for transit the same way they pay outside of transit systems.”

The challenges include bringing both commuters and casual travelers back to transit systems, and doing so when changes in work habits will likely mean less reliance on twice daily rush hours to provide most of the transit systems’ revenue.

Both Cubic and Visa are enabling connections between transit and ancillary services that traditionally were positioned as rivals to mass transit, such as ride sharing apps and scooter or bike rentals. Open transit payments easily connect the commuting app to ride shares or to other third parties such as Movit, a commute planning app and Cubic partner.

“There’s redefinition of where transit starts and stops,” deKozen said. “We have long talked about trains, buses and ferries. It’s time to expand that to transit on demand, bikes and ride-sharing as part of the overall equation.”

For more content like this, register for the next event in our Card Forum series, Card Forum: Security & Fraud, taking place July 14.

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