Verma says the original Oyster system could count the number of journeys, but not the number of users. The Pay As You Go system can do that - 6.5 million people. Irregular users make up the majority of travellers, and the majority of Londoners.
“Unless you can provide Pay As You Go as the core of your smart system, the whole thing is a waste of time,” he says.
“We have two different systems in London. We have had Oyster since 2003… 100 million cards issued. I could give you many statistics, but everyone knows it is a roaring success. Since the end of 2012 we have had contactless payments on buses, and since September 2014 contactless has been extended to all our transport services.
“The bulk of transport journeys are made in an urban context where the fares are relatively small. The ticket has no meaning - we are not reserving a seat for you. All it shows is that you got in at Point A and got out at Point B, therefore there is a fare to be paid. Ticketing is actually an unnecessary process for that.
“As soon as you define the ticket as a micro payment problem, you look for the most efficient solution to that, not a solution to a ticket problem. That is why contactless payment was invented. We invented it.
“We gave it to the banking industry and they ran with it. Now, if you can pay for your transport with a product that is already in your pocket, it takes away the need for you to buy a ticket at all.
“In the 13 months that contactless has been operating on the Underground in London, it has been a runaway success - 23% of our Pay As You Go journeys are now being made on contactless. That is without any financial incentive - the fare is the same as Oyster. So almost a quarter of our customers have switched to contactless, because of the convenience.
“More than seven million cards have been used already. Seven million unique users on our system. We are seeing 22,000 new cards used every day. That is an astonishing number. And they come from 61 countries. So all this stuff about interoperability has been cleared out with a machete. Our system is already globally interoperable.
“Any transport system that goes down the same path and uses contactless payments can work the same way we do. You don’t need to go and buy a Starbucks card before you get a coffee. So why do you need to do that on public transport?”
Verma says TfL’s system can be adapted to any local transport system, although not to long-distance rail, which makes up a small percentage of all transport transactions.
ITSO strikes back
Verma makes ITSO sound like yesterday’s story, which is unfair. Look at the figures: Stagecoach alone has 240 million smart transactions a year on its ITSO system; Go-Ahead has 600,000 The Key cards in circulation; Merseytravel has 150,000 Walrus cards.
“It is well established on buses across the whole of the UK with the exception of Northern Ireland,” says ITSO General Manager Steve Wakeland. “The further you go away from London, the more deeply entrenched we are.”
The technology was adopted in piecemeal fashion across the country, with individual authorities and operators using it as the basis for their own brands. Few are interoperable, and all work only within specific geographical regions.
“It did grow out of individual silos,” acknowledges Wakeland. “But ITSO can be adapted. Everyone is looking for a one-size-fits-all solution. But there isn’t one. ITSO is the most adaptable solution. The underlying infrastructure is in place - we have cards, ticket machines and gates out there.
“And in some cases the same technology can be used across modes and from one city to another. I took a Nottingham City Card to Newcastle, loaded a Metro product onto it, and rode around.
“In ITSO-land we call it the Martini Principle. Remember the old advert? Any time, any place, anywhere. The original silos from which it grew are now overlapping more and more.”
But there is no doubt that the adoption of ITSO on the railway is slower than anyone had envisaged. On October 30, Shadow Transport Minister Jonathan Reynolds asked the Government when the ITSO-based South East Flexible Ticketing scheme (SEFT) would be delivered.
Rail Minister Claire Perry replied: “Smart ticketing was taken up after 2010. Five train operators have now signed up. A new central back office, providing critical infrastructure, underwent testing in August 2015. On current plans, the South East Flexible Ticketing programme will complete in 2018.”
So the Government-led IT system will have taken eight years to implement. That’s the same amount of time taken to move from GPRS phones to 4G, and longer than it has taken to introduce fibre optic broadband to most rural areas in England. By then, even ITSO itself will be moving to mobile phone use, and Transport for London considers the scheme obsolete now, in late 2015.
The Train Operators’ View
The most firmly established user of smart cards outside London is Southern Railway. Now that Southern is part of the giant Govia Thameslink Railway (GTR) franchise, The Key is being rolled out across all its routes.
Launched four years ago, progress has been slow but steady, with 50,000 journeys a week now bought on the card. Last year, TfL travelcards were added, so that season ticket holders can use The Key on the train, Tube and bus. A Pay As You Go version has been launched more recently.
“The Key will become the method of choice on our routes,” says Dave Walker, head of revenue and ticketing at Govia Thameslink Railway. “Three years from now we hope the vast majority of travellers in our area will have moved to contactless KeyGo.
“We are involved in the Government-led South East Flexible Ticketing programme. But The Key was launched before SEFT. We use an earlier back-office version, and SEFT is funding the extension of The Key onto Thameslink routes.
“It now covers almost every GTR station, and KeyGo is valid at 120 stations. Next year it will reach Cambridge, Peterborough and King’s Lynn. Your bank card is associated with your KeyGo card, so you can tap and go from (say) Gatwick to Brighton. It will work out the correct fare for you and charge you afterwards. This is particularly innovative – no one else has this.”
KeyGo is linked to Metrobus and Brighton & Hove buses. So it is possible to travel by train to Brighton, by bus to Eastbourne, and then join another train. Not many people do, but even so this is the closest non-metropolitan system to London’s contactless payments.
“Interoperability is important,” says Walker. “We would like to reach a point where our card will work on the South West Trains system and vice-versa. As it already works on the travelcard area, our cards are read by the machines at Waterloo… no problem.”
c2c is a more recent convert to smartcards that also work in the London travelcard area, using an evolution of the Southern model.
“We are part of the SEFT scheme,” explains spokesman Chris Atkinson. “We went live one year ago, and 20% of our season ticket holders are now using it.
“From February we will launch an automatic delay repay scheme on the smartcard, if your train is delayed by two minutes or more. You will get 3p per minute put back, up to 30 minutes. Above that you get 50% off the fare. The automatic credit gives you money off your next purchase. So for the following season it might mean £40 to £50 off. You will have tapped in and tapped out of each service, so we will have a record of how long every journey will have taken.
“We are also doing a trial with Barclaycard for payment bracelets called bPay. Each has a chip like a contactless card. It’s a wearable system, a bit like a Fitbit. We are sending 8,000 of them to customers in East London and Thurrock who are currently buying paper season tickets, or those who use Oyster Pay As You Go a lot. The contactless fare is cheaper, so they could save up to £80 a month over a paper ticket.”
It works like a digital wallet. Customers add funds from their existing Visa credit or debit card, and it can be set to top up automatically whenever the balance falls below a threshold. The full c2c route will have contactless payments from 2017.
South West Trains is a step behind, with the first passengers due to switch from cardboard to plastic in 2016. Staff already have smartcards, with 6,000 issued last summer for familiarisation and testing. The company says it identified some glitches, which are being fixed before it becomes available to half a million season ticket holders.
“That will come in parallel with a new website and booking engine,” says SWT Managing Director Tim Shoveller. “The bit of plastic in the customer’s hand is actually the final bit of the jigsaw. The rest all has to be in place first.
“We also have a programme on the Portsmouth line running trials to Waterloo, but at the moment the cards can’t be used further than that. We haven’t yet got agreement with TfL to sell season tickets through to the Underground. We can’t sell outside SWT. We were hoping to have that resolved a long time ago. The technology is there - it’s about agreeing the details.”
