In many parts of the world, the future of public transport has already become reality. Cities like London, Tokyo and New York are leading the way: Paper tickets and  also the proprietary travel passes of network operators are becoming a thing of the past.

All that passengers will need to carry in future is a credit card or a smartphone. Mass Transit Transaction is the name of the technology that enables passengers to move quickly through ticket barriers and manage payment on the fly, which has clear advantages not just for customers but travel  companies too.

Future driven

For more than 150 years, local and long-distance public transport has become an integral  part of the infrastructure of almost every country in the world. As early as 1863, the world’s first underground railway started operating in London. However, it took almost another 100 years until public transport experienced a significant upswing in the middle of the 20th century. 

Driven by industrialization and numerous technical innovations, increasingly sophisticated subways, trams and also buses create a vital network that connects all parts of  city centres with  urban areas on the outskirts. Cities such as London, New York, Beijing, Tokyo or Munich would collapse without subways and buses. More and more people depend on these safe, fast and reliable methods of transport. 

In order to ensure that the efficiency of the public transport system is maintained in future, many innovations  now  play out beyond the physical infrastructure , and relate to new styles of payment, in particular electronic ticketing. 

New York, London, Tokio

The metropolises of the world are setting standards: Anyone boarding a bus or train in London, New York or Tokyo can swipe their credit card or payment app on their mobile phone over a corresponding sensor in the station or on the bus.  Queuing in front of ticket  machines is no longer necessary, nor is fumbling for small change. Companies also benefit. They can deploy their staff more efficiently and guarantee their customers the best price without the need to update or amend ticket tariff lists. 

In the context of Electronic Ticketing and Mobile Ticketing, the term Mass Transit Transactions is often used. There are basically two different approaches to setting up the infrastructure for electronic ticketing.

What do Closed Loop and Open Loop mean?

Open Loop for maximum flexibility

In the Open Loop, conversely,  passengers simply use their credit or debit cards, their smartphones or other devices with payment functions, such as wearables. There is no need for them to  carry yet another card, which they might forget to take with them or lose. All they have to do is tap their card or device on the corresponding sensors. Thanks to Near Field Communication (NFC), this is done on the fly and there is no additional waiting time at ticket machines, which in rush hour can be very busy. 

Always the best price – without research

While passengers who use traditional payment methods have to research the cheapest tickets for themselves, the payment system of the Open Loop automates this process. The system captures the station from which the customer starts his journey the second he taps the card on the sensor. At the destination station, he taps the card again on the corresponding sensor and the system calculates the fare.

Pay-as-You-Go

The method behind this system is called Pay-as-You-Go. However, it allows you to go much further. If the customer travels several routes in one day and the total price of the individual tickets exceeds the price of the day ticket, he only pays the lower amount. During processing at the end of the day, the system automatically selects the best option. Similarly, passengers cannot exceed the payment amount of a monthly ticket for one month. This results in an unprecedented gain in convenience and time – not to mention the financial savings potential and the flexibility gained. In addition, special discounts can be granted as part of a loyalty programme, or during a special offer promotion.

It’s not only regular commuters who benefit. Occasional travelers need only to worry about carrying anything more than their usual credit or debit card to take advantage of the lowest price guarantee.

The advantages for customers and transport companies at a glance

Payments in Public Transport: the Podcast Episode

Together with Kostika Stralla, Senior Product Manager at Computop, Henning Brandt talks in this episode about the future of payments in public transport.