Transport for London Prepares to Accept Contactless EMV Cards on Tube; Warms to Mobile NFC

Transport for London has launched a key user trial as it gears up to accept fares on the London Underground and its other modes of transport from contactless EMV credit and debit cards, and for the first time is beginning to sound more positive tones about possibly accepting payments from NFC phones.

The transit authority, which introduced open-loop card payment of fares to more than 8,000 buses in December of 2012, might be late again with its expansion to the next phase, which involves launching a sophisticated backend system to calculate fares from cards. It had planned to be ready by this summer after delaying the launch from the end of last year. But it now says it will be ready only later this year. 

The agency hopes to one day replace its large closed-loop Oyster scheme, which, while popular, is expensive to operate. Contactless readers that Transport for London is rolling out also will continue to accept Oyster. 

Meanwhile, director of customer experience, Shashi Verma said that “in principle,” the upgrade of Transport for London readers to accept contactless bank cards, supporting Visa payWave, MasterCard PayPass and American Express ExpressPay credit and debit cards would also mean they could accept these applications on mobile phones. 

While he didn't say that the authority would promote such payments, he had been more skeptical in the past that mobile NFC would be fast enough for payments at busy gates for the Underground, or Tube. The authority indicated there are ongoing tests of mobile-NFC payments, but did not elaborate.

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Graphics:

Chart: transaction times in tests of EMV cards that could be used for fare collection, Dec. 2012, Jan. 2014
Chart: Open-loop fare-collection projects, UK, USA 

Among Topics Covered:

  • Expansion of fare collection from contactless credit and debit EMV cards and, possibly, NFC applets on London Underground, light rail and national rail in and around the city.
  • Attitude of Transport for London officials to possibility of using NFC devices to pay fares appears to be warming, though further tests still needed
  • Tests showing relatively high transaction times for contactless EMV cards that could be used to pay fares on London buses
  • Consultant suggests host-card emulation is an option to increase transaction speeds for fare collection conducted on NFC phones
  • Second phase of open-loop fare collection project, including implementation of sophisticated back-end payment system
  • Prospects for launching second phase of open-loop project on time and for accepting payment of fares from NFC phones
  • Acceptance of prepaid cards and applications on NFC phones remains questionable

Sources quoted:

Shashi Verma, director of customer experience, Transport for London
Peter Lewis, external initiatives manager, Transport for London
John Elliott, head of public sector practice, Consult Hyperion 

Among companies and organizations mentioned:

Transport for London
Cubic Transportation Systems
Consult Hyperion
Visa
MasterCard Worldwide 

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