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September 2022

 

2 - 3 Minutes

Payment solutions for sustainable urban mobility

For a glimpse of the future of sustainable urban transport, visit Brussels.

The Belgian capital is almost two years into a decade-long transport plan aiming to underpin swathes of economic development and improve the living standards of its residents. The ‘Good Move’ plan seeks to cut traffic congestion dramatically while creating more room for pedestrians, cyclists and public transport. Roads are being redesigned to carve out “peaceful neighbourhoods, linked by intermodal structuring axes, and centred on efficient public transport and smoother traffic,” according to city authorities.1

These are big changes for a city in which the average driver spends 195 hours a year stuck in traffic.2  The plan will be underpinned by “integrated mobility solutions” offering choice to transit users. A single digital platform for all mobility services will enable travellers to transfer seamlessly between trains and buses, share bicycles or even charge e-scooters.
The success of Good Move will be watched closely by city leaders globally. At least 240 cities have set net-zero or carbon-neutral targets for 2050 or sooner, according to research led by Oxford University.3  Brussels’ plans to combine city planning with a digital strategy, seeking to remove friction from multi-modal journeys could boost the adoption of more sustainable methods of transport, and ultimately become the model that others follow.

“Sustainable mobility is an imperative for any urban centre seeking to reach its full potential,” says Glenn Maguire, Principal Asia Economist at Visa. “If cities are to be successful, transport models must be frictionless from a digital perspective. That includes utilising integrated payment methods that can act as the connective fascia between various forms of transit.”

Those connections are best maintained via apps, particularly those that combine various transport options, according to Maguire. Enabling users to pay for a service without being part of a given system, otherwise known as open-loop payments systems, are also likely to drive adoption, he says. Indeed, in Asia, so-called “super apps” are already emerging that provide all-in-one platforms for ride-hailing, food deliveries, or chatting with friends.

Sustainable mobility markets are expanding as the customer experience improves. The 13 leading mobility services will grow at a rate of almost 10% every year through to 2030, expanding the market to $660 billion across North America, Europe and Asia, according to research from the Oliver Wyman Forum and the Institute of Transportation Studies at the University of California, Berkeley.4

European cities are relatively densely populated and tend to have well developed
public transportation systems, making them particularly well-suited to so-called micro mobility services such as scooters and bicycles. The adoption of electric vehicles (EVs), however, has the most potential for growth due to a potent mix of rising consumer demand and incoming regulation. The European Union has proposed a ban on new fossil fuel car sales by 2035, for example.

Europe is now the leading and fastest-growing market for EV charging services, the Oliver Wyman, University of California research shows. Consumer EV sales surged 70% between 2020 and 2021. Meanwhile, the number of EVs on the road is forecast to increase 41% a year this decade. Charging service revenues are forecast to jump to $5.8 billion in 2030 from just $200 million in 2020.5

Indeed, EVs could become a victim of their own success without innovative methods to improve access to charging infrastructure. Eight in ten respondents to a British JustPark survey published in June said there were barriers in place stopping them from purchasing an EV. Six in ten said either the reliability of chargers or the frequency of local chargers was a problem, making it the most selected option ahead of the price point of EVs and range anxiety.

Visa and JustCharge, part of the JustPark group, have partnered to incentivise homeowners to offer their home chargers to purchasers of EVs. The partnership offers rewards spanning vouchers to those who list their EV chargers on the JustCharge network to discounts on the cost of EV charging bookings when payments are made with Visa. The aspiration is to make paying for EV charging as easy and natural as any other contactless purchase. Adding just 5% of households to its community would double the number of charging points in the UK, according to JustCharge data.6

The partnership underlines the importance of physical and digital infrastructure working in tandem to drive the adoption of sustainable transport. Belgium’s Good Move plan recognised the need to improve street design and traffic flow while placing great emphasis on providing a digital platform that integrated various services in a manner that “guides individual and collective choices”.7

Convenience will be key. Should the Brussels model prove successful, consumers will soon expect access to mobile apps with seamless payments, regardless of whether they opt for a single mode of transport or a fragmented journey across multiple modes run by different companies, according to Maguire.

“Municipal authorities and companies that strive to provide the most seamless experience stand to gain the most during the transition to sustainable transport,” he concludes. “The open nature of digital payments opens up new possibilities to connect services that consumers currently view as separate, allowing users to more easily make the most sustainable choice as they navigate our great cities.”

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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.

1Good Move: The Regional Mobility Plan 2020-2030, Brussels Mobility, https://mobilite-mobiliteit.brussels/en/good-move
2 Here’s everything you need to know about the mobility budget, Medium, Carolina Sanchez, 15 April 2020, https://medium.com/myskipr/heres-everything-you-need-to-know-about-the-mobility-budget-abaeabf004c1
3 Which cities are in the race to net zero?, Capital Monitor, Polly Bindman, 22 July 2022, https://capitalmonitor.ai/sdgs/sdg-11-sustainable-cities-and-communities/green-cities-race-net-zero/
4 Sustainable Mobility: There’s an App for That! Oliver Wyman Forum, https://www.oliverwymanforum.com/subscribe/sustainable-mobility--there-s-an-app-for-that-.html
5 Sustainable Mobility: There’s an App for That!, Oliver Wyman Forum, June 2022, https://www.oliverwymanforum.com/subscribe/sustainable-mobility--there-s-an-app-for-that-.html
6 ARE BRITS AT RISK OF PULLING THE PLUG ON EVs TOO SOON? RESEARCH REVEALS ALL, Visa, JustCharge Press Release
7 Good Move: The Regional Mobility Plan 2020-2030, Brussels Mobility, https://mobilite-mobiliteit.brussels/en/good-move

Case studies, comparisons, statistics, research and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa Inc. neither makes any warranty or representation as to the completeness or accuracy of the information within this document, nor assumes any liability or responsibility that may result from reliance on such information. The Information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.

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