From contactless to contact-free when journeying through life
Open loop payments, data analysis and AI will transform public transport into sustainable transport
Nearly 10 years ago, the world’s biggest multilateral development banks pledged over 175 billion dollars to fund sustainable transportation systems over the next 10 years. Ten years later, today, ‘sustainable’ stands for much more than a cleaner and safer transport system targeting congestion, reduction of exhaust fumes and cutting down on the economic loss of hours lost in transport.
As Covid hit global society over a year ago, transportation volumes did not climb as suggested before but dropped, in some places to dramatically low levels. Sustainable transport has thus gained another edge: it has to be agile and flexible, actually nearly elastic in terms of supply and demand. Better planning means less congestion and less carbon emissions, but there is more to gain.
Artificial technology analysing transport data held by systems and travellers are helping companies to come to grips with optimal supply of transportation versus requirements and a cost-efficient situation. Also, the ultimate reason why the use of public transport and private transport has become hard to predict is simply due to the fact that people have to be ultimately flexible in working out on a daily basis whether they have to travel, can travel and if so, how. This call on flexibility together with an increasing uncertainty about life in general, has led to travellers looking for control. Control over when to travel but also on how to pay for it. Working out the most cost-effective and time-effective route is very important, but also the standard renewal of travel passes has come under pressure.
Choice was always important, and ease of use often took precedence over control, but this has changed and in fact, people can have both. Where many closed loop systems, those based on specific purpose smart cards are still a very reliable and easy system but in general they merely focus on the commute and need top-ups or are linked to a direct debit style renewal. In many countries these costs represent a significant part of monthly expenses and so flexibility when demand changes, is key.
Open loop systems (account-based ticketing systems) have some major advantages. First of all, travellers can choose to pay by whatever type they feel comfortable, their bank debit card of choice, credit card of choice or contactless payments like Apple Pay. Moreover, account-based systems can offer a better personalised travel experience based on data analysis: best route, best price, discounts, loyalty, additional services and link those to the payment type most frequently used, allowing banks to move in on the action.
Tap to Pay is a great example of an on demand contactless payment option in transport respecting social distancing and contact-free precautions when in transit. Earlier this month Landbank of the Philippines joined an initiative that will allow commuters around the country to tap and pay as they move from buses to jeepneys (minibuses) around the country.
More technologies will play in the hands of today’s societal change. Tokenization in account-based ticketing means getting excellent service and experience without exposing the individual’s personal details. Imagine blockchain in public transport by sharing rides being paid for by crypto. When and where banks are willing to accept that their customer relationship, with the traveller/consumer and transport companies alike, is no longer directly linked to payment types, new doors open. Banks are (still) in a great position to be the spider in the web of value generating eco-systems. Places where people meet, connect and do more than the one thing that brought them together.
Banks can use and leverage their place on the table when investing in new transport infrastructures to go beyond safety and green into full circle sustainability. By adopting open loop systems banks can offer visible value to their clients but also be a key driver in more relevant data analytics towards a greener, safer future, saving money for all jumping on a next train, bus or car.
Let’s hope we can do so safely soon.