If I had to pick which fare collection innovation has had the most significant impact on customer experience over the last decade, it would be a close call between the ability to tap my credit card or pay with my mobile phone. However, as someone who frequently forgets my wallet but always has my phone, mobile wallets take the win. Mobile payments, mobile ticketing, mobile wallets, digital wallets, and digital smartcards are just a handful of the terms used to describe the experience of paying your transit fare using your phone. Often, these terms are used interchangeably – but do they mean the same thing? Not always. While the payment experience for the rider can be similar, the technology powering that experience can be very different.
Mobile Ticketing
Mobile Payments and Mobile Ticketing
Mobile payments and mobile ticketing are two broad terms used as catch-alls to describe any experience where a transit rider uses their mobile phone as their fare payment token or ticket. Although these terms commonly describe an open payment experience using mobile payment credentials like Apple Pay or Google Pay, they can also describe app-based payment using barcodes and QR codes.
Mobile tickets can be an effective way for transit agencies to give riders a mobile payment experience without needing an open-loop implementation or a complete hardware replacement. Visually inspected on-screen animated tickets provide greater security and reduced fraud opportunities than cash collection or manually issued paper tickets. Mobile tickets also offer an easier way for passengers to pre-purchase their ticket, reducing the dwell times associated with on-board purchasing and the need for costly roadside vending equipment.
For agencies wishing to have electronic inspection and validation without transitioning to an NFC or open payment system, mobile barcode scanning is also an option. Riders still enjoy a mobile payment experience while avoiding issues surrounding ink smudging and creased or crumpled paper barcodes. Electronic verification also enables agencies to reduce boarding and validation times and enhance data collection to drive new insights into passenger origins and destinations to empower service improvements.
However, as anyone who has used a self-service checkout knows, barcodes are not without issues. Scanning a barcode can take a certain level of precision. When your potatoes don’t scan in the grocery store, it’s low stakes, but when you fumble your barcode in a high throughput environment, bottlenecks quickly occur. This precision is even more difficult for those with mobility challenges. Phone screen damage, brightness, back-lighting and glare in the surrounding environment can also impact the ease of barcode scanning. Although barcode scanners are readily available off-the-shelf, retrofitting them to existing fare collection equipment and maintaining them can be costly. Depending on your long-term goals, it may not always be the cheapest path to mobile payments.
Mobile Wallets and Digital Wallets
Mobile wallets and digital wallets are often used interchangeably (although mobile wallets are the more common of the two). A mobile wallet is an app such as your Apple Wallet or Google Wallet that contains your debit or credit information (or transit smartcard – but we'll get to that!). It lets you pay for goods or services by tapping your smartphone on a point-of-sale device. The popularity of mobile wallets has been increasing rapidly, and it's easy to see why – the freedom to leave home with nothing but a phone is a game changer.
Digital payments involving mobile wallets are predicted to be the fastest-growing payment method in the world. Although Asia Pacific is currently leading the way in adoption, the use of these apps for payment in North America is believed to have doubled between 2020 and 2025. With adoption stats like these, you can understand why open payments are one of the most requested features by riders and transit agencies alike. In customer experience research Cubic conducted throughout the United States, 56% of riders surveyed said they would take transit much more, or somewhat more often, if digital wallets were accepted on public transit. In Europe, 46% of survey respondents said it would increase their transit usage.
Digital Smartcard (a.k.a Travel Card)
Digital Wallets, Digital Smartcards and Virtual Transit Cards
When you think of digital wallets, you typically think of the experience described above – using your credit or debit card. However, agencies are investing in another creative solution for riders who want the mobile experience but want to retain the transit smartcard they know and love. Enter the Digital Smartcard. Commonly referred to as your virtual card or travel card, this digital version of your transit smartcard offers the same experience as using your mobile wallet – but with a few added benefits.
Using a virtual card is like having a ticket vending machine in your pocket. While fares are pay-as-you-go in many locations, virtual cards give you access to that city's full range of fare products. Unlike a credit card in your digital wallet, where you are only presented with your purchase history, your virtual card is a one-stop shop for all your transit account information. From within your mobile wallet, you can see your usage history, account balance, and passes held. You can also access convenient account management features such as auto-top-up and top-up reminders and add value instantly without needing to worry about when the balance will transfer from the app, website or vending machine onto your card. Before the digital smartcard, you often needed to download a separate app for each city you visited to help you manage that city's transit smartcard. Now, you can access each location's virtual card all in one place – your mobile wallet.
Virtual cards give you the option to ride without registering your card and creating an account. Nowadays, it sometimes feels like you need to create an account and hand over personal information for everything. Want to order some takeout? That will require your name, email, phone number, birthday, dog's name – the list goes on.
This works if you're a regular customer who wants to invest your time in building a relationship with that agency or business. Registering can give you ongoing benefits, such as products and communications personalized to your preferences. However, for infrequent travelers who are often forced to create an account to access their card, this process can feel tedious at best and like an invasion of privacy at worst.
The addition of virtual travel cards to your mobile wallet has created the foundation for other exciting innovations in the mobile ticketing space. ID verification capabilities to validate concession entitlements are just one of many capabilities on the horizon that will allow concession holders to enjoy the same seamless user experience as full-fare riders. Integrations with mapping platforms like Google are another. By allowing you to reload your balance directly from your trip planner when your balance is insufficient to cover your journey, features like this mean you will never get caught without the correct fare again.
Whether you choose to tap with a debit, credit or virtual card, it is beyond doubt that mobile payments are transforming the transit user experience. With so much functionality in this pocket-sized device, it's easy to see why your phone might be your best transit pass yet.
