This Public Transit Agency has a $450 Million Plan to Adopt Contactless Payments

The Metro Transit Authority (MTA) of New York City has actively used the MetroCard for payment purposes. But it is poised to replace this payment system with a new contactless payment system. This revelation came forth from the minutes of a capital program oversight committee meeting, as reported by Business Insider. The new contactless payment system may even extend beyond MTA to other New York transit agencies as well.

Contactless payments are expected to be launched for the buses first, then subways. Vending machines would be setup for the same by 2022. The cost of replacing the old MetroCard based system has been estimated at around $450 million. More information on the contactless payment system will be revealed publicly within the next two months. There are no insights as to which particular technology will be used for the payment system, but it can be expected that it would certainly involve a mobile phone along with a dedicated app.

As revealed by the minutes of the meeting, once the contactless payment system is setup, commuters can pay fares by tapping a contactless bankcard, smartphone or a smart card against a terminal. This MTA project has been opened for bidding to companies till mid of 2016. Considering the regained popularity of NFC based payments in US, thanks to Apple Pay, it is likely that NFC may play a major role in the new payment system. But this is indeed a lengthy project and no one can speculate as to which technology will catch on in the upcoming years.

As for the MTA, they can take a hint from the Transport for London (TfL) which itself replaced the use of Oyster smartcards for contactless payment cards. Nearly 50% of London’s population already has contactless debit or credit cards which can conduct transactions under £20 without the need for PIN number or signature. Contactless payments have been in use in London buses since December 2012. Cash payments were abolished in July 2012 which saved TfL £20m-£30m annually. There are currently about 70,000 contactless payments being made on buses in a day.


Ray has keen interest in the area of devices, OS and wireless technologies. He is a Mobile Technology enthusiast and believes that Mobility is going to completely change the way we do Payments and Commerce. He wishes to share this belief with the world by providing such content through LetsTalkPayments. Ray has done his engineering as well as MBA.

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