Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.
Data for today’s episode is provided by Mercator Advisory Group’s Report: Commuters Win with the Evolution in Transit Payments
Breaking Down the Evolution of Transit Payments:
- Cash, pre-purchased tokens, and cards with magstripes are starting to fade from use for transit payments.
- Tappable, reusable transit cards with near-field communication (NFC) capabilities are becoming more common.
- Mobile apps that work within a specific transit system or a closed community of acceptance point have been the next evolution of transit payment form factors.
- The fare is paid by opening the transit app or holding the phone near the collection point, allowing the fare collection system to capture payment credentials or scan a QR code.
- A 2020 Mercator Advisory Group survey found that 25% of respondents have purchased prepaid transit fares.
- Around 20% of the nation’s transit systems are now capable of accepting open-loop payments.
- $16 billion in fare payments were collected in the U.S. in 2018, compared to $11.9 billion in 2008.
Paying for transportation runs the gamut from cash and checks to modern, contactless mobile apps that let riders pre-plan and pre-pay for trips. Financial institutions have an opportunity to support the millions of riders in the U.S. that use mass transit and other forms of transportation that constitute billions of payment transactions annually. The new mobile-based transit payment apps are not only digitizing cash and check payments at the fare box, but extending to mobile payments for other purchases along the journey.