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Feel free to BONK on the TUBE, says Transport for London

Plus: Almost NOBODY uses pay-by-bonk on buses - Visa

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From 16 September you will be able to pay for your journey on the London Underground with your pay-by-bonk contactless card or NFC-enabled phone.

This won’t come as a surprise to anyone who uses the London Underground regularly and will have heard the announcements (and seen the posters) warning people to keep their Oyster and contactless payment cards separate.

The new service is part of a long term plan to phase out Oyster. When the contactless payment system for London Transport was first envisaged, it was planned as a London-wide payment system where you could buy newspapers or chocolate from vending machines on platforms with the same card.

TfL backed away from this, not just because it took all the vending machines away, but because offering a system with cash-out means the operator is handling money, which makes it much more complex from a regulatory perspective.

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Oyster became a way to reduce the need for TfL to manage cash, which is prone to theft and needs physical security measures in place. Despite launching a year late, it has been a huge success. The migration to contactless EMV (Europay, MasterCard and Visa) further reduces the need to handle cash – for both TfL and the customer – as cards don’t need to be topped up.

To replace the travel card model and the current “daily” capping, a new Monday to Sunday cap is being introduced for customers using contactless cards. TfL's system will automatically calculate the best value contactless fare over the course of the week. Credit card companies charge per transaction, so TfL will aggregate payments daily – but individual journeys will be shown online to anyone who registers their account.

Contactless payments have been in operation on the capital's bus network since December 2012, and have been used by around 825,000 customers for 17 million journeys, or about 4.3 per cent of the total. At the moment the only people who can actually use their payment cards on the Underground are the 3,000 beta testers who were recruited through the TfL website.

TfL and National Rail continue working together to develop the programme to expand the system to the suburban rail routes where Oyster is currently accepted.

London is leading the way in the area of transport ticketing and TfL will soon be one of the world's largest single merchants accepting contactless payment cards.

Predictably the mobile payment flag wavers are heralding the TfL move as the inflection point for people using their phones for payments.

“The potential for mobile contactless payments is huge but brands are only just starting to pilot the technology to see what the impact could be. The issue holding progress back has always been about how easily it can penetrate the everyday lifestyle of consumers. What TfL has done here is 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,” said Miles Quitmann, MD of mobile payments company Proxama

The Register asked Visa how many of the 825,000 payments made on buses in the last six months had been made using mobile phones – bearing in mind that, aside from Apple, the majority of smartphones support NFC – and we were told that the number wasn’t published because it was such an insignificant figure.

Sandra Alzetta, executive director, Visa Europe told us: “We're expecting that number to increase dramatically when London’s transport network starts accepting contactless on September 16th. I predict that paying for public transport will become so convenient and frictionless that in the first week of launch, we’ll see about one million Visa contactless journeys on TfL’s network.”

Comment

It remains to be seen if that will translate directly into people regularly using their contactless cards for other things. Such adoption takes a very long time and the mobile phone industry, which was piloting contactless payments a decade ago, might very well lose patience with building, testing and maintaining a system that no one uses. Even if they do stick with the project, it's a long shot to hope that one day consumers will use their phones to buy, say, lemon-soaked paper napkins. ®

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