Public Transport and Contactless Payments

While the use of digital payments has been rising steadily for many years, it was the arrival of COVID-19 that gave them turbo boost. According to the World Bank, more than four in ten adults in low and middle-income economies, excluding China, found themselves making payments using a card, phone or the internet for the first time as coronavirus hit¹.

This trend has affected every aspect of life - including public transport, an economic and social lifeline for many. According to Visa's second annual Future of Urban Mobility Survey², in the UAE, nearly a third of adults now use public transit as their primary form of urban transportation, with more than half using it to get to work and for leisure activities. The figures are similar for Saudi Arabia and Qatar.

And, like so many businesses, transport operators have been swiftly introducing digital payments to draw in more passengers and improve the overall experience, while keeping customers as safe as possible from infection.

New Transit Systems Launched

In the second quarter of this year alone, Visa and its transit partners rolled out 50 new projects worldwide, from Thailand and Japan to Mexico and beyond. A pilot in Izmir in Turkey, for example, has enabled passengers to pay with contactless domestic and foreign credit cards, debit cards and prepaid cards for the first time.
More than half of adults in the UAE, Saudi Arabia and Qatar, meanwhile, are already using contactless pay as you go with an existing debit or credit card or mobile device - and virtually all say they now expect contactless to be offered as a payment option.

This is a trend that Visa expects to see accelerating, with the survey finding that customers saw big advantages to the technology. In the UAE and Qatar, saving time was seen as the biggest plus point for contactless, with Saudi Arabians most attracted by the fact that it reduces contact with surfaces and other people, and thus the chance of Covid infection.

Other benefits cited by passengers include convenience, the fact that there's no need to carry cash, ease of use and ease of record keeping. Virtually nobody felt there were no advantages to contactless - just one per cent in Saudi Arabia, two per cent in Qatar and none at all in the UAE. And this move to contactless is opening up new payment options for customers. There's a trend, for example, towards fare-capping, which sets a limit on the amount a passenger ever has to pay in total for a day, week or a month.

This means customers not only get away without having to tie up their cash on a monthly pass, but can board faster and more easily too. And it's popular - two thirds of passengers in Qatar say they’d use public transport more often if fare-capping were an option, along with more than three quarters in Saudi Arabia and the UAE.

Sustainability Concerns

And this matters. As the climate crisis bites, there's a pressing need to increase the use of public transit around the world. During the COP26 climate conference in Glasgow last November, a global coalition of mayors, transport unions, workers and authorities warned that limiting climate change to a 1.5C temperature rise would require a doubling of public transport journeys in cities by 2030³.

The issue is a major concern for passengers too. Globally, 88 per cent of people in our survey said sustainability was a factor in how often they use public transit - and in the UAE, half said it was their main reason for using public transport.

"With all these factors playing their part, it's clear that the last two years’ rapid growth in public transit is set to continue and even accelerate, particularly in the CEMEA region. Visa's placed itself right at the heart of this ecosystem, providing passengers with the only credential needed to make their journeys, saving them time and effort", explains George Denisenko, Vice President, Head of Product Management, CEMEA, Visa.

And as transit passengers become accustomed to digital payments, there are benefits for others as well. The 'halo effect' sees them using the same Visa credentials for other purchases too - transporting merchants, acquirers and issuers, as well as card users themselves, into a more convenient and efficient future.