Australia’s Transport for NSW Travelers Turn to Mobile Wallets Echoing the Global COVID-19 Trend

Transport for New South Wales, Australia’s largest transit agency, announced that as of August 2021, mobile wallets now account for over half of all contactless transit payments.

Traveller utilization of smartphones and wearables to pay their transit fares has seen a substantial increase, driven mainly by the COVID-19 pandemic, while transit authorities seek to update ticketing systems to reduce in-person contact and provide touch-free experiences. With Transport for New South Wales (NSW) having expanded its range of accepted payment methods to include NFC payments services, including Apple Pay, Google Pay, Samsung Pay, and Fitbit Pay—in addition to contactless EMV (Europay, Mastercard, and Visa) credit and debit cards—mobile wallets are now accounting for around 55% of all NSW contactless fare payments.

With rapid adoption of mobile ticketing and EMV acceptance in global transportation infrastructure, the convergence between payments and ticketing has seen a significant push in the wake of the pandemic. Aside from NSW in Australia, Port Authority in the U.S. launched their Ready2Ride app in August 2021 for travellers who wish to utilize mobile ticketing, while customers of Russia’s Sberbank can now use its mobile app’s ‘payments’ section to purchase a new Troika card or replenish an existing one by entering their Troika card number. Also, Littlepay has introduced Portugal's first contactless transit ticketing system in the city of Porto. 

Contactless payments from both from mobile wallets and contactless EMV payment cards have proliferated to the point where they now constitute the majority of all adult trips on Transport for New South Wales’ metro, bus, and rail transit system. Though, it is still worth noting that the closed-loop Opal card still retains the remaining share of the transport networks payments.

The growth in the use of mobile wallets for fare payments is significant given the strong penetration rate of contactless payment cards in Australia and that mobile wallets are, comparatively, a more recent offering than an EMV payment card. By comparison, the rate of near-field communication (NFC) mobile wallet usage for all contactless fare payments for TfL stood at around 21% in early 2020, just before the pandemic triggered mass shutdowns of transit networks. The pandemic has served to drive the use of contactless payment cards as well as NFC-enabled smartphone and wearable payment solutions. However, it is worth noting that, unlike Transport for NSW where the closed-loop Opal card still occupies around 70% of payments for adult trips, in London, contactless open-loop payments swept past the closed-loop Oyster card for pay-as-you-go travel in 2018.

Transport for New South Wales also intends to expand the use of contactless EMV along with its Opal card, by moving into a fully-fledged MaaS (Mobility as a Service) platform. Not only would this work for public transit, but will also incorporate private mobility and transport providers, including taxi, bike rent, and ride-hailing by leveraging the Opal Connect ABT (Account Based Ticketing) payments service. Indeed, the shift towards a MaaS solution is visible in many major cities. TA’s (Transit Authorities) can opt for a fare payments platform and pay for services on a PAYG (Pay as you Go)/subscription basis providing the benefit of being able to deploy the latest tap and ride innovations to their ridership base in a short time span with the opportunity to grow offerings as they become available. This enables passengers to use a stored value account, or contactless payment card, to tap across multiple operators with travellers billed with the lowest-possible fare post-journey. FPaaS (Fare Payments as a Service) /MaaS solutions provider Masabi has seen success with this model, with recent deployments in Ohio, Denver, Bilbao, Calgary, and Saskatoon, among others.

The global COVID-19 pandemic has brought about a drive toward the modernization of ticketing systems in a contact-free way. While ridership has seen a significant downturn in the number of travelers using the network due to the pandemic, EMV systems provide a number of advantages for end users. They also benefit transport operators, who can move away from the cost of issuing proprietary paper tickets and plastic passes for non-frequent travelers.

While, previously, the significant capital required to set up and integrate a contactless EMV system had put the solution out of reach for the majority of transport operators, the ongoing pandemic has framed the importance of minimizing hand -to -hand transactions and the ability to use a card already in possession of the end user in a contactless format, providing a safer way to conduct a payment transaction.

With contactless payments in all markets experiencing an upturn during COVID -19, approximately 150 large cities are looking to adopt EMV as another contactless payment method, which will sit alongside existing proprietary solutions, including cities in Ireland, the United Arab Emirates (UAE), India, and Russia. California is also looking to implement a state-wide open-loop EMV system. It is worth noting that many travelers will not return immediately to the transit network in a “post-COVID” environment as many will stay with a new mode of travel such as walking, biking, or car-sharing after returning to the office and that the impending chipset shortage will have severe effects across a number of market verticals, including smart card ticketing.