The future of transport payments in a cashless world

By Pierre Veillon, mobility marketing & offer manager, merchant services at Worldline

In just three short years, the rise of remote working has transformed our lives and commuting habits as more people opt to work from home either partially or entirely.

But what impact has this behavioural shift had on how we pay for today’s transport and mobility needs? And is there sufficient payment flexibility available to meet travellers’ evolving requirements?

During the Covid pandemic, there was a significant decrease in transportation usage. However, since then, the levels of transportation have – largely –returned to what they were before the pandemic.

Nevertheless, there have been permanent changes in the habits of travellers. Previously, 60% of workers in the EU had never worked from home, but now 66% work remotely more than once per week.

Consequently, many travellers have shifted away from monthly or yearly urban mobility subscription plans and are opting for alternative mobility products. New mobility products, such as 10- or 20-trip/month subscriptions, have emerged after the pandemic to meet this changed demand.

Likewise, Open Payment, associated with weekly or monthly capping, represents an ideal payment method for commuters who travel a couple of days a week as opposed to an old-fashioned, inflexible season ticket. And with these new options, there are new payment challenges.

To support this transition, the surge in demand for eco-friendly mobility options and the rapid growth of e-commerce, transport operators urgently need to enhance public transportation, as it contributes significantly to their revenue.

The relentless push towards sustainable transport is inspiring people to minimise their carbon footprint when travelling. Consequently, cycling, carpooling, carsharing, and the use of e-bikes and e-scooters have become increasingly popular.

And there is a determined commitment across Europe to improve public transport through strategic planning and implementation.

With e-commerce projected to generate a substantial portion of urban transport revenue by 2027, urgent action is required to meet the evolving payment needs. This includes:

• Introducing more flexible mobility products and payment methods.
• Enhancing the integration of Mobility as a Service applications and marketplace payments.
• Fulfilling the growing demand for reliable e-commerce and card payments through omnichannel services.
• Providing scalable solutions to address the complexities of a fragmented banking system, both within Europe and beyond.

Elevating the passenger experience

Digital payment systems offer a superior customer experience by eliminating the need to queue for tickets or tokens. Fast and convenient payment processes enable commuters to swiftly board trains, buses, or subways, enhancing their overall journey.

Smart payment systems also provide easy-to-use top-up methods, allowing travellers to purchase tickets anytime, anywhere, including online and through smart devices.

The economics of payment Integration

To maximise the diverse range of payment options available, public transport systems must establish a fully integrated payment ecosystem. Such integration empowers passengers to use different payment methods interchangeably with ease.

By implementing an integrated payment system, transport authorities can optimise revenue streams with low transaction fees while simplifying the user journey.

This integration also promotes seamless transitions between modes of transport and enables payments at various transit points, thereby enhancing the efficiency of the entire transport network.

Mission critical solutions

To thrive in today's world, transport operators must prioritise customer-centric payment solutions. They should provide a variety of payment options that are readily available and easy to use, regardless of whether the customer is at an unattended terminal or interacting with a ticket inspector via a smart device.

Cost-effective solutions that cover the entire payment spectrum, including terminals, online gateways, omnichannel services, and commercial acquiring, are essential. These solutions must cater to both current and future needs, such as Alternative Payment Methods (APMs), biometric payments, and account-based payments.

Embracing an APM doesn't just simplify transactions—it opens a gateway to a treasure trove of data, insights, and analysis for transport operators. Digital payment systems diligently collect and store transaction data, offering a wealth of information to optimise and enhance public transport services.

This payment data unveils invaluable insights into peak times of use, popular routes, and fare usage trends. When combined with complementary mobility data, public transport and other mobility professionals can craft more efficient routes, schedules, and services that truly cater to their passengers’ needs, revolutionising the way we travel.

Dynamic currency conversion (DCC) is also a popular feature that enables customers to pay in their preferred currency. However, compliance with regulatory authorities and robust payment data security must be never compromised.

Protecting sensitive information and ensuring regulatory adherence are paramount in building trust and providing a secure payment experience.

The right partnerships are critical to mutual success

In transport and mobility, preparation and support drive sustained growth. Picture a pan-European acquiring platform with integrated quality processes and comprehensive reporting—an all-in-one solution for seamless operations.

Complexities in the sector require a robust payment provider covering online, ticket office, onboard transactions, and after-sales service.

Payment providers must actively support a diverse range of merchants, including rail, urban, and digital services providers, as well as ticketing integrators and transit authorities.

At the same time, transport operators should seek providers that offer end-to-end seamless journeys, from payment acceptance to commercial acquiring, and embrace a strong service partnership ethos.

Ultimately, success in mobility payments hinges on a partner who truly understands the unique needs of transport operators, combining expert technology with peace of mind, allowing operators to focus on their core capabilities.

As the payment experience often serves as the last and most memorable point of contact with a traveller, every effort should be made to ensure a positive and unforgettable encounter.