UK Bus Company to Accept Open-Loop Payment from Cards and NFC Phones

FirstGroup, which bills itself as the largest bus and rail operator in the United Kingdom, is following Transport for London's lead in planning to accept bank cards, as well as NFC phones, directly to pay fares.

The company said it is rolling out technology that will enable passengers to tap their contactless credit or debit cards or similar applications on NFC phones throughout its bus operations in England starting in late 2012.

It is reportedly equipping about 5,000 buses to accept the contactless payment, including in such major cities as Manchester, Leeds and Southampton. All told, FirstGroup has about 8,000 buses and carries 2.5 million passengers a day in more than 40 towns and cities in the United Kingdom.

The company said it is investing £27 million (US$43.8 million) in the new ticketing system. The buses will also be able to accept smart cards complying with the UK ITSO fare-collection standard. ITSO functionality will be introduced in the fall, about a year before the buses will take contactless bank cards and applications on NFC phones.

London transit authority Transport for London plans to equip more than 8,000 buses to accept contactless credit and debit cards earlier in 2012, in time for next summer’s Olympic Games. It will follow that by accepting open-loop payment on the London Underground, planned to launch before the end of 2012.

The open-loop transit payment is expected to offer a big boost to the United Kingdom’s contactless-payment rollout. At present, about 60,000 contactless point-of-sale terminals accept contactless bank cards, though few are large retail chains. There will be an estimated 25 million contactless credit and debit cards on issue nationwide by the end of 2011, according to forecasts. The United Kingdom has the largest rollout of contactless bank payment in Europe.

Transit authorities in such other cities as New York, Chicago, Philadelphia, Washington, D.C., and Toronto are also gearing up to accept open-loop payment.

Giles Fearnley, managing director of FirstGroup’s UK bus division, said in a statement that the new system would simplify bus travel and introduce a maximum daily fare.

“The public transport industry will increasingly rely on new technology, such as contactless bank cards and mobile phones to both retain and attract customers,” he said. 

With contactless bank cards, the back-end system calculates the fares and bills users for the proper amount or deducts it from their bank accounts. With prepaid transit cards, such as Transport for London’s Oyster scheme and ITSO, readers calculate the fares and deduct the proper amounts from cards.

The FirstGroup open-loop ticketing system will accept contactless credit and debit bank cards and similar applications on NFC phones, but not prepaid bank applications, at least not at first. That is also the case for Transport for London, since streamlined authorization is not ready for prepaid bank applications.

The first NFC rollouts in the United Kingdom, however, will be using bank-issued prepaid applications, including Quick Tap from Orange UK and Barclaycard, which has already launched. Telco Telefónica (O2) UK is planning to launch NFC before the end of 2011, featuring its own prepaid payment application. The transit terminals will not be able to accept fare payment from these applications.

HEADLINE NEWS

Deutsche Telekom Payments Chief Departs; Telco to Revamp Struggling Wallet, Including Planned Support for HCE

NFC Times Exclusive – Deutsche Telekom has appointed a new head of payments and plans to support host-card emulation among other technologies as it seeks to revamp its struggling NFC mobile wallet, NFC Times has learned.

People on the Move: Sequent Software CEO Steps Down; Interim CEO Appointed

NFC Times Exclusive – Sequent Software, a supplier of mobile wallets, TSM and host-card emulation products, has appointed an interim CEO, replacing Robb Duffield, who stepped down earlier this month after having served as CEO for the Silicon Valley-based vendor for just under three years.

GSMA, Telcos Consider Common Platform to Support Tokenization on SIMs

NFC Times Exclusive – Mobile operators are considering shopping for technology to launch a common platform to request tokenized payment cards from such providers as MasterCard Worldwide and Visa and to load the tokens onto their NFC SIM cards, NFC Times has learned.

Visa and MasterCard Change Strategy on Tokenization Fees; Observers See Gambit to Lock in Market

NFC Times Exclusive Insight – Visa maintains that its offer to waive tokenization fees for the long term is designed to simplify the connections between thousands of card issuers and such wallet providers as Google and, perhaps later, Apple, thus driving widespread rollouts of mobile-payments services.

Vodafone’s Proxy-Card Service Likely to Face Difficult Market

NFC Times Exclusive – Vodafone Group’s proxy-card NFC mobile-payments offer, which is designed to enable subscribers to add their credit and debit cards to their Vodafone Wallets as funding accounts linked to a Vodafone prepaid card stored on the SIM, has yet to be launched by any major Vodafone branch operator in Europe.

Canadian Telcos Refuse to Give up On SIM-Based NFC, Though Many Challenges Lie Ahead

NFC Times Exclusive Insight – The head of the Canadian telco joint venture Suretap Wallet told NFC Times that this week’s launch of the telco’s new wallet service was not prompted by the expected expansion of Apple Pay into Canada later this year.

At Least Some U.S. POS Terminals to be Ready to Support Apple Wallet Rewards

NFC Times Exclusive – Major point-of sale-terminal vendors say that their most recently deployed terminals and perhaps others will be ready to accept loyalty cards from Apple’s Wallet when the nonpayment application launches with iOS 9 this fall.

CASE STUDY: Asia-Pac’s First HCE Launch–Higher Transaction Value, Though User Numbers Remain Small

Jun 23 2015

UPDATED: NFC Times Exclusive – Australian credit union CUA has seen a 16% increase in value of transactions for mobile payments since the launch of its host-card emulation mobile-payments app last summer, though user numbers have remained small 11 months after one of the first HCE commercial launches globally.

Vendors Say Mobile Payments at Vending Machines on the Rise

NFC Times Exclusive Insight – Suppliers of cashless payment for vending machines predict the rollout of Apple Pay, along with planned introduction of Android Pay, will continue to reduce the use of cash at U.S. vending machines and will also lead to higher transaction amounts, though did not release actual figures.

Taiwan Banking Joint Venture to Request Tenders for HCE and Tokenization Platform

NFC Times Exclusive Insight – Taiwan’s banking joint venture, Taiwan Mobile Payment Co., has disclosed that it will issue a request for tenders for a host-card emulation and tokenization platform, with plans calling for the technology to be made available to Taiwanese banks for mobile-payments launches by the end of the year.

Apple, Transport for London Face Potential Problems Enabling Apple Pay for Fare Collection

NFC Times Exclusive – Both Apple and Transport for London are trumpeting the coming use of Apple Pay to pay fares on various modes of mass transit in London, including the fast-paced London Underground. But they face a couple of problems.

Apple Announces Addition of Nonpayments Applications, First International Expansion for Apple Pay

Jun 11 2015

NFC Times Exclusive Insight – Apple today announced major new updates to Apple Pay, including the addition of store credit, debit and loyalty cards in the U.S., expansion of the mobile-payments service to its first overseas market, the UK, and a renaming of the wallet app itself from Passbook to Wallet.