Since 1829, commuters in London have been paying cash for public transportation. Currently there are less than 1% of the commuters who pay through cash for traveling in a Bus in London. Soon this 1% of commuters will stop paying in cash if the Transportation sector which is seeking consulting proposals to implement cashless payments through prepaid cards for commuters.
Introduction of Oyster Card in July 2003, a pay as you go card service has changed the way payments are made by the bus passengers. Oyster card has an inbuilt chip system and is based on RFID technology.
In London, commuters who chose to stay away from using any prepaid cards end up paying a premium amount for commuting. This has caused the commuters to adopt the prepaid cards culture and go cashless for commuting on London buses.
Leon Daniels, TfL’s managing director for surface transport stated that going cashless would save the company about £24 million.
In a similar move across Europe, Sweden is moving towards implementing cashless payments on its public transport network. Smart cards have been introduced elsewhere in England but going completely cashless may take some time. . In Northeast England passengers are paying for the bus service by downloading tickets on their mobile phones.
Go Ahead which is a leading bus operator in England has introduced a smartcard system known as The Key. This smartcard system is already used for over 3 Million journeys a month outside London. Stagecoach which is also a leading bus operator shared that 1/3rd of the journeys made on its buses are paid through a smart card.
LTP view: These are encouraging signs for transportation sector in Europe. Going cashless is saving them millions of pounds. By introducing loyalty based programs tied to smartcards and prepaid cards transportation providers will be able to lock in the commuters and increase their revenue share.