Contactless Payment System Along With Associated Contract Restructuring Found To Reduce Cost of Fare Collection From 15 Percent of Revenue to Nine Percent of Revenue.

International Agency Report on the Cost Saving Benefits of Contactless Fare Payment.

Date Posted

Commissioner’s Report – February 2016

Summary Information

Contactless fare payment refers to the use of Radio Frequency Identification (RFID) or Near Field Communication (NFC) technology to allow for payment of fares without having to make physical contact with a fare reader. Typical contactless systems allow for patrons to use a variety of RFID or NFC enabled devices such as smartwatches, cell phones, or reloaded fare cards.

Transport for London (TfL), that transit authority that runs the public transport system in London, United Kingdom was one of the first transit systems to launch a contactless payment system. TfL rolled out its contactless payment card system in 2014. The contactless payment system was designed to accept credit and debit cards that have the appropriate contactless technology in them, along with other fare payment medium. In a 2016 Commissioners report, TfL reported rapid and substantial uptake of the contactless payment system by travelers. TfL estimated that the contactless fare payment system, along with contract restructuring enabled by the contactless payment system, have reduce the cost of fare collection from 15 percent of revenue to nine percent of revenue. With further upgrades TfL estimates this could fall as low as six percent of revenue.

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