As you are reading this, you might be sitting on the train, waiting for your bus or riding in the back of a taxi to the airport. Regardless of your exact location, you are most probably in a city. Indeed, cities are growing at an unprecedented rate. By 2050, more than 70% of the population are expected to live in urban areas. Already today, 80% of global GDP is generated in cities (source: United Nations and The World Bank).
What does that mean for you and me? Chances are that as you move around, you will struggle with more traffic congestion because of old infrastructures, queues to get tickets before boarding over-crowded trains or buses and therefore increased chances to miss your trip or arrive at your destination on time.
Today, cash, paper tickets and transit cards no longer deliver the simplicity, speed and convenience users have come to expect in other parts of their increasingly connected and digital lives.
At Mastercard, we have recognized these challenges and are addressing some of them proactively. Today, we are at the Smart City Expo in Barcelona, where we will showcase how we are making urban life more inclusive by tapping into the superpower of collaboration. And while we are in Spain, you might be aware that a number of buses in Madrid and Santander are already contactless – an important step in improving the quality of life of their residents.
Across Europe, we have already implemented live transit solutions in about half of our European countries. More precisely, 22 countries across Europe already have one or more solutions live and there are many more to come. In practice, that means that you will be able to use your contactless card or digital device to access your train, bus or even to share a car.
In Dubrovnik, Croatia, for instance, Avant2Go car sharing system started in November and will be deployed in seven locations in Croatia’s leading tourist destination. All vehicles will be electric and will be booked, unlocked and paid for via smartphone app. In Kragujevac, Serbia, 50 000 people are using public transport and paying with contactless every day. Since this is a university city, such a solution is particularly useful for the 15 000 students that live and study there as they rely heavily on public transport to move around.
The benefits of so called “open loop” transit payments where you can pay with your contactless card or your mobile are obvious and of interest beyond the student population.
Cities like London, Adana or Kyiv have already demonstrated the success of such transit solutions. In London, each day, more than 50% of Pay as You Go journeys across the city are now taken with a contactless bank card. Paymentsense has calculated that a billion contactless journeys will be made in London in 2019 and expects that number to jump to 1.55 billion by 2025. In Kyiv, over 88 million rides have been paid contactless at the turnstiles since Mastercard contactless technology was launched in Kyiv metro in 2015. In Adana, contactless payments tripled in 1,5 years after their first introduction on public transport vehicles.
Citizens clearly see the value of solutions that get rid of the need to wait in line at the ticket booth, the annoyance of holding up the bus while getting change or the risk of losing money that is simply forgotten on unused tickets.
It is not just citizens who benefit from these solutions. Cities do too. By unlocking payment options that riders already carry in their pockets, we help cities of all sizes reduce the cost of fare collection and improve the travel experience for residents and visitors alike.
Italy comes to mind as another example where all those advantages have been recognized.
In Rome, for instance, contactless technology was enabled in September 2019 at the 350 turnstiles in the 73 stations of the underground network. In Milan, where contactless payments were integrated in the underground network last year, 20% of rides have been purchased using contactless in the first 12 months. Other Italian cities, such as Turin, Grosseto, Florence and the province of Siena have also implemented contactless payment in local transit.
There is clear momentum for these solutions as their benefits are universally recognised. In Russia, for instance, we have implemented transit solutions across the country on the underground and overground transport networks ever since the first project with Aeroexpress railroads was launched in 2011. Since the beginning of 2019, more than 10 new smart transit projects have been launched.
Europe has taken a leadership role to address mobility challenges in its cities and it has already come a long way. At Mastercard, we are helping cities and citizens develop local infrastructure projects and implement urban mobility solutions that make moving around simpler and faster.
Want to know more? Read our latest news on our City Possible partnership!