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March 2022

 

5 - 6 Minutes

Re-imagining City Transportation - How Payments Help to Enable a Brighter Future

Digital payment solutions have emerged as an important tool in making urban mobility more efficient, more sustainable, and more appealing to citizens and visitors alike.

City travellers love the ease and the speed of contactless ticketing. In many European countries, consumer preference for touchless digital payments has increased by 20%1. In the UK, for example, commuters cited the introduction of open-loop contactless payments as the single biggest improvement to their urban mobility experience2.

This helps explain why Visa is working with 100-plus European cities to embed integrated payments into their transport networks. Whether taking the metro, hiring a scooter, paying for tolls or charging an electric vehicle (EV), consumers want to use their everyday card to get the best fare across different modes of transport. And city authorities are also looking at digital payment solutions to support their ambitions for efficiency, sustainability and livability.

A case in point is Porto – a relatively small city with very big ambitions. With a population of 1.7 million, it’s not that big, yet it’s officially categorised as a global city3 and is a hotbed of innovation. The municipal authorities regard its public transport network and intermodal ticketing system, Andante, as a source of distinction and a driver of future development.

“Urban mobility is the key for the future – for the future of the Andante system and for the future of mobility,” said Transportes Intermodais do Porto (TIP) President Tiago Braga. “As well as contributing to the post-COVID economic recovery, it will help to improve the environmental sustainability of urban areas and help to achieve the goals of the Paris climate agreement.”

Digital technology as an enabler

Digital technology has played an important role in Porto’s transport success story. The big news from 2021 was the introduction of the city’s open-loop EMV contactless ticketing solution, enabling travellers to easily use their debit or credit card to access and travel on the Metro and buses. In July, a pilot was launched, covering the Metro line that supports the international airport, plus one of the busiest bus routes. The next phase is to take it city-wide and even Porto Metropolitan Area-wide. And the ultimate ambition is to replicate it in other Portuguese towns and cities, enabling people to roam among any of them, without needing to buy a physical ticket.

Reconciling the underlying complexity

“For the consumer, it’s a beautifully simple process. You simply tap to travel – just as you would in London, or New York, or Rio de Janeiro – using the same card or smartphone, and know you’ll get the best fare and the same carefree experience,” says Fernando Souza, Vice President of Transit and Travel Services from Cybersource, Visa’s digital payments management platform and payment gateway at the centre of the implementation.

“But behind the scenes, it can be a hugely complex undertaking – involving many different stakeholders, technologies, platforms and components that need to be integrated. So, we designed an implementation process that shielded the transit operator from this complexity and minimised the investments that the players needed to make.”

“Transport operators ought to be in the business of running trains and buses, providing the best ride experience instead of handling complex ticketing and payment technologies, and managing payment risks,” continues Fernando Souza. “By delegating those complexities to the payment sector, transport operators can focus on delivering a great experience to their travellers – giving them better, simpler, more sustainable ways to get around town, and more reasons to leave their cars at home.”

Significant uptake and surprising statistics

Just a few months in, Tiago Braga is pleased by the extent of the uptake. “Our priority was the routes most frequently used by tourists and, despite the pandemic, we see that tourists from many different countries are tapping their cards. But we have also seen strong uptake from local and domestic passengers. This convinces us that our own citizens also welcome the advantages of contactless and, as the rollout continues, will be willing to adopt it more widely and more frequently.”

Tiago Oom, Head of Acquiring at Unicre, one of the other core partners, is equally enthusiastic. “I sift through the performance data at least every two weeks. It’s incredibly exciting to see the exponential growth – strong domestic use is something we never expected at this early stage.”

This initial success bodes well, not just for the next phases of Porto’s implementation, but for the deployment of the system elsewhere. “I see this as a catalyst for the entire country,” continues Tiago Oom. “Every other municipality in Portugal will want the same benefits for their own citizens and the same efficiencies for their own transport systems. And the great thing is that the hard work has all been done. With the core skills and the systems now in place, this should be easy to replicate over and over again.”

Another dividend is the data that’s generated, enabling city authorities to monitor travelling habits, identify bottlenecks, make well-informed planning decisions, and work out how best to enhance sustainability.

A broader vision for sustainability

For Porto, the introduction of contactless ticketing is part of a much wider program of smart mobility initiatives encompassing, for example, the installation of EV charging stations, the evaluation of dockless bikes and scooters, and the continual enhancement of cycle lanes. Ultimately, it’s all about improving the efficiency, allure, and sustainability of the city.

Drawing on experience of implementations across the world, Richard Campion, Head of Acceptance for Visa in Europe said: “We think of it as ‘mobility as a service’, a seamless interconnection of different modes of travel, covering everything from cycling, to driving, to EV charging, to ride hailing, to car-pooling, to local trains and buses, to e-scooters.

“You can switch between each of them at any time or place, and payment is always embedded and automatic. You never even think about it. For each journey, you are equipped to make smart decisions that are better for you, better for your city, and better for the planet. From rail to road, Visa has driven forward innovative projects and partnerships designed to modernise our mass transit travel experiences, by making contactless and digital payments the norm rather than the exception. For commuters that means a touch free experience, at speed, with the cheapest fares. While for transport providers and cities, it delivers efficiencies that enable sustainable travel with maximum user satisfaction.”

Richard Campion concluded: “And, by making contactless part of people’s daily routines, a knock-on effect is a broader acceleration of digital payment volumes for merchants in surrounding areas and across all channels.”

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All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

1 VisaNet data, June 2020 – June 2021

2 Contactless payments are biggest improvement to public transport experience, say UK commuters, Visa, 5 July 2019, paragraph 1: https://www.visa.co.uk/about-visa/newsroom/press-releases.2897869.html

3 The Globalization and World Cities Research Network classifies Porto as a global city with a so-called Gamma+ rating: https://en.wikipedia.org/wiki/GlobalizationandWorld_CitiesResearchNetwork

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