Contactless comes of age on the Tube.
As expected, the market ripples associated with Apple Pay have yet to die down. With the shipping of the new iPhone 6 and iPhone 6 Plus starting last Friday, it is not surprising that the hope is going to give way to practical usage and hype to practicality. And, while there are companies offering wallet solutions that are now climbing on the Apple Pay wagon, others are firing shots across Apple’s bows (so to speak) and addressing security issues surround user payment issues. Yes, PayPal, I’m talking about you.
Before we get to that, however, let’s talk about a project that has also been a long time coming, promised a change in the way we pay and finally had its public release last week. Congratulations to TfL for now accepting contactless on the Tube! However, this is not the end for the Oyster card. "This is not the end of Oyster, and it's not the end of cash, but it is a significant dent in the market for cash," Shashi Verma, director of customer experience at TfL told Finextra. Verma's vision is for the system to eventually cover the entire UK transport network, so that "across the UK...you won't ever need to buy a ticket again and you can travel everywhere you want just with your contactless card". There was plenty of support for the start of the new payment system from a variety of players in the contactless ecosystem. “By enabling contactless payments on the tube, TfL has taken something the majority of consumers do more than once a day and offered an alternative, easier and a cost effective way to do it. Incentivising customers with a daily and weekly price cap is a good idea, making the use of contactless payment methods more convenient for millions of people. This, combined with Apple’s NFC announcement last week, will add to the growing confidence in the technology, giving all merchants more of an impetus to roll out their own solutions and drive the use of mobile payments,” said Miles Quitmann, CCO, Proxama.
Other companies were also quick to highlight their support of contactless on London’s rail services. Most notably EE, with their Cash on Tap service, were keen to point out that their NFC system is now accepted on all Underground, tram, DLR, Overground and National Rail services that support Oyster cards. "The Transport for London network carries more than 30 million journeys around the capital every day, and contactless payments can help make these journeys easier and quicker for London's residents and businesses," said EE marketing chief Pippa Dunn. "This is why EE has continued to work so closely with TfL and MasterCard to bring the ease and efficiency of contactless mobile payments to London's Tube, tram, DLR, London Overground and National Rail services that accept Oyster."
And for those of you who use Waterloo station, Visa Europe have crafted an immersive 3D art installation there. The image enables passers-by to race to the London Underground gates where they can use their contactless card on the reader to pay directly for their journey. Contactless journeys – using credit, debit, charge or pre-paid cards or devices – will work in the same way as Oyster on TfL services, by touching in and out on the readers at the start and end of every journey. Visa Europe say that nearly 1 in 2 Londoners already have a contactless card. The availability of contactless journeys on all TfL services coincides with new figures released by Visa that show the use of contactless across the UK has continued to gain pace. In June 2014, the use of contactless cards to make payments increased month-on-month by 7%, reaching a total transaction value of £136.4 million. This also indicates a growth in contactless use of 207% since June 2013, with the transaction value increasing by 202%. “Tuesday 16th September marks a great day for Londoners,” says Nick Mackie, Head of Contactless at Visa Europe. “No longer will London transport users need to queue for a ticket, or to top up their Oyster card. Contactless journeys will offer a convenient, fast and cost effective way of paying for travel around the city. Contactless payment use has reached record highs in the past few months, as our latest stats show, and with TfL offering contactless across all its services this is only set to accelerate further.”
As we said, well done to Transport for London in bringing cashless, contactless transactions to the public transport travelling masses. I wonder when commuters will be able to use Apple Pay? (Oh, come on - we’re all thinking it…)
Actually, one company who was definitely NOT thinking that way last week was PayPal. The payment company has released an advert aimed at taking a little bit of the wind out of Apple’s mobile payment sails using the exact train of thought (another pun - I can’t help it!), that we had in this editorial a few weeks ago. This shot across the bows took the form of a new print ad that appeared in the New York Times, USA Today and San Francisco Chronicle last week. The advert ran with the headline, “ We the people want our money safer than our Selfies. PayPal protecting the people economy.” Anuj Nayar, senior director of global initiatives at PayPal, acknowledged the ad was referencing Apple and didn't exactly hold back his criticism for Apple's new payment platform. "What everyone has to go on is 10 minutes of a very consumer-focused presentation," Nayar told Mashable in an interview this week. "The devil is in those details. What happens when you have a problem, for instance?" He also dismissed Near Field Communication (NFC), the technology at the center of Apple Pay, as a "10-year-old technology that hasn't gained mass adoption." Nevertheless, he said if NFC catches on, PayPal will adapt to it.
Daniel Wolfe, Editor-in-Chief of PaymentsSource, wrote “It's a fair criticism, but it's one that makes PayPal look defensive. Apple Pay won't even launch until October, and at that point it will fall under as much scrutiny as Google Wallet and the Starbucks app did — and both of those were found to contain security flaws. Apple, already reeling from the iCloud scandal, may not need PayPal's help to erode consumer trust in its new payment system. If Apple Pay works as advertised, benefiting from the perceived security of Touch ID, it could finally win many consumers over to mobile payments. But it's up to consumers to decide whether to forgive Apple for iCloud's role in the celebrity photo leaks. If PayPal is the more trustworthy service, it should go without saying.”
It remains to be seen whether PayPal's more aggressive public statements pay off. eBay, PayPal's parent company, has seen its stock dip in recent days in part due to investor concern about Apple's impact on the payment service.
Either way, the positive news this week is that, once again, transit is driving the next stage of contactless payment forward. With the addition of mobile payment services also being used for the TfL transport network, perhaps it really will be only a matter of (little) time for mobile solutions to also catch a ride on this particular contactless train.
Until next week,
Steve Atkins
Contactless Intelligence
![]()
