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EE & Vodafone will let you BONK on the TUBE – with Boris' blessing

Transport for London: You can pay, but don't touch

Internet Security Threat Report 2014

London Underground commuters will soon be able to pay for Tube journeys via contactless credit cards thanks to EE, Vodafone and Transport for London.

The pay-by-bonk system, currently undergoing trials, works by users charging a pre-payment wallet on their NFC-enabled phones and using it to pay for journeys.

This sits between the two systems TfL is using. With an Oyster card you top up and keep a balance “on the card”, and with the forthcoming EMV (a global payment card standard operated by Europay, Mastercard and Visa) system you use a credit card and the cost of the journey is debited from the card when you tap out.

In practice, the balance in Oyster is held on a server and not on the physical card, so if the card is lost or stolen the balance can be moved to a new one.

The credit card system is already in place on London buses. TfL told us: “Contactless payment card acceptance was launched on London’s buses in December 2012. Since then more than 11.5 million journeys have been made using this payment option.”

But the connection is not real-time and requires regular syncing. If a card with no credit is presented to a card reader on a bus, the reader won’t know about the lack of credit until the latest batch of transactions is synced, meaning a fraudulent user can get journeys for free. TfL's systems maintain a blacklist of dodgy cards, so next time around the credit-free card will be rejected.

TfL's server then tries to process the outstanding debt over an extended period of time. If the credit card bill has been paid, the amount is deducted and the card number is removed from the blacklist. If the card bill doesn’t get paid before TfL stops trying to poll the card company, the card will remain on the blacklist permanently.

Transport for London, not Bank for London

With the mobile phone systems the gates at the tube stations will link to EE’s “Cash on Tap” and Vodafone’s “mobile wallet”.

TfL is keen to use technology to reduce the amount of cash it handles. You can only pay cash on a bus in areas outside the central Zone 1 fare area of London. Within Zone 1 you have to use an Oyster or contactless card. It all makes sense as it increases the speed at which passengers can board, reduces theft from (and by) staff and lets TfL concentrate on being a transport system and not a bank.

Extending to rural areas where there might be fewer places to top up an Oyster card, however, is problematic – which is why mobile is such a neat solution.

Typically the cost of handling cash for an organisation – any company, be it a supermarket a bank or whatever – is about five per cent, allowing for thefts and security. This is similar to the amount retail newsagents get for selling Oyster top-ups, but a lot more than credit card companies charge major customers. Moving to pay-by-bonk on mobile would be good for all concerned.

It’s such a good idea you have to ask why they haven’t thought of doing it before. The answer, of course, is that they have. Nokia and O2 ran trials in 2007 and found that consumers loved the idea.

In a canned statement Shashi Verma, TfL’s Director of Customer Experience, said: “We are continuing to modernise all our transport services to make it easier for customers to do business with us. The upgrade to our readers to accept contactless payment cards also makes them capable of accepting suitable payment applications on mobile phones. In principle, mobile phones with a Visa, Mastercard or AMEX payment application could be accepted on our services. At this stage, mobile phones with pre-paid cards will not be accepted. We are testing to see how the devices perform on the system and welcome any innovations which improve the services and choices we are able to offer customers.”

At the time of the Nokia/O2 trials TfL said that it was not prepared to do any revenue share on ticket sales, but, given that at the time it required custom hardware to work, the publicly-owned travel company would be prepared to fund Non-Recurring Engineering (NRE) to allow handset manufacturers to build the devices. Things have since moved on and plenty of handsets now do have the NFC wherewithal about them.

As ever, the issues seem to be around consumer education, business cases and inter-company politics. Until these issues are solved it’s just another NFC pilot. ®

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