Public transport services are essential to keep cities in liveable environments, moving millions of passengers every day. Mobility is challenging in ever-growing cities, and urban planning seeks tools to promote sustainable, environmentally friendly mass transit over the automobile. Public transport can be an answer to the clogged-up cities. The solution is not just about having efficient vehicles and well-planned routes—it's also about empowering operators with smart, modern omnichannel payment service that reduces friction and lowers the threshold for using mass transit, giving them more control and confidence in their decision-making.

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Implementing omnichannel payment services can be a game-changer for operators. It allows for building traveller intimacy, better planning and capacity allocation. It also provides cost savings and reduction of administrative tasks.

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How an Omnichannel Payment Strategy Transforms Public Transport Operators

Implementing an omnichannel payment strategy by connecting cross-channel payment services is a strategic move that can significantly change how travellers consume the operator's services.

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Here are the key benefits that an omnichannel payment strategy brings to public transport operators:

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Strong Passenger Focus

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One of the most significant advantages of an omnichannel payment strategy is the increased focus on the passenger. Every online, in-app, vending and tap-to-ride purchase is linked to the known and unknown traveller profile. The operator can follow the traveller's payments cross-channel and link that to the travel behaviour. Therefore, it can anticipate the traveller's journeys, customise services and predict passenger flows before they happen.

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The omnichannel payment strategy helps Flytoget, the high-speed rail service from Oslo airport and Oslo city, to reach a 97% customer satisfaction rate—number one in the Scandinavian countries.

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Improving customer engagement

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Answering payment-related questions is an administrative burden. The passenger requests a refund or wants to pay their subscription, and the customer service agent needs to search multiple sources to find the transaction or initiate the purchase. With an omnichannel payment strategy, the service desk has one transaction data source, saving time and effort. 

All sales channels are aggregated into one report, and purchases are initiated independently of the sales channel. The omnichannel payment strategy also improves the DIY service: the passenger can retrieve all purchases cross-channel and initiate top-ups and repayments with one click.

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Increasing Financial Efficiency

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An omnichannel payment strategy will increase administrative efficiency. The accountability for all transactions is in the hands of a single payment service provider. Therefore, proving the gross continuity is a cross-link between the single reconciliation report and the tickets issuing report. Any financial discrepancy is found without comparing multiple reports from multiple sources.

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Enhancing Security

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When payments are monitored across channels, exemptions stand out more quickly. Inspection of tickets purchased is unified, and fraud is noticed before will increase. Using an omnichannel payment service provider guarantees that the channel-specific risk engine outcomes are aggregated and potential cross-channel fraud cannot be exploited. For operators, this means improved revenue protection and fewer losses from fraudulent activity.

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Emphasising ROI for Public Transport Operators

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While initial investments in modernising payment infrastructure may seem significant, public transport organisations see more opportunities to offset these costs with open-loop systems than with closed-loop systems.

Smart transaction routing brings a competitive advantage. Operators can choose between the payment card scheme or national inter-banking infrastructure, forward the payment to alternative peer-to-peer payment methods, and reduce cost by aggregating transaction volumes to a single payment service provider and bank acquirer.

Even with an increased passenger volume, open-loop systems are likely more cost-effective than closed-loop systems. This is due to the absence of expense cards and higher fare collection costs associated with increased usage of closed-loop systems.

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Collecting business essential data

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To satisfy the mobility desires of the traveller, operators will have to gather as much data as possible covering usage, movements, deployment and payment. The data needs to be anonymous and can be linked to the traveller's profile after consent. Existing systems will tell when a service is too crowded, journeys are delayed, and capacity is insufficient. However, without an omnichannel payment strategy, the operator has no information about travel rights yet to be deployed and where inspection has the most significant effect. Moreover, the operator has no instruments to influence travel behaviours, such as dynamic pricing. These insights can help operators improve efficiency and optimise resources, ensuring that public transport remains reliable and responsive.

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Case Studies: Success Stories in Public Transport Payment Modernisation

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The benefits of modernising payment systems aren’t theoretical—they’re being realised by public transport operators around the world. Let’s take a look at two examples of cities that have successfully transformed their payment services and the advantages they’ve gained.

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Flytoget in Norway: put the passenger first

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The Flytoget high-speed rail service connecting Oslo Airport to the city centre is a textbook example of how modern payment services improve customer satisfaction. By offering the passenger all possible payment methods to purchase travel rights Flytoget makes payment frictionless.

For operators, using tap-to-ride lowers the threshold for using their services by removing the friction of payment. Tap your payment card, plastic or emulated, gives you access to the service without standing in line in front of a ticket booth or vending machine. Fytoget's implementation guarantees a smooth onboarding.

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Transport for London proves that open-loop payment reduces fare collection costs.

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With more than 3 million contactless journeys per day, accounting for more than 60% of EMV tap-to-ride transactions, Transport For London (TFL) runs the largest open-loop payment services globally.

The services were introduced in 2014. TFL was the first city-wide operator to accept contactless bank cards at gates and validators. Because of the open-loop payment, the fare collection cost was reduced by 7%, and the open-loop capping pricing made it more popular than the famous close-loop Oyster card. 

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Overcoming Challenges: Lessons from Public Transport Systems Falling Behind

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Not all public transport systems have successfully transitioned to modern payment solutions. Some cities have struggled with outdated infrastructure that leads to inefficiencies and higher operational costs.

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New York City’s MetroCard: A Slow Transition to Modernisation

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For decades, New York City’s MTA relied on the MetroCard, a magnetic stripe-based payment system prone to malfunctions and costly maintenance. The slow rollout of the OMNY system demonstrates the challenges operators face when upgrading legacy systems. 

OMNY, which is planned to be completed in 2025, has had high growth of open-loop transactions since the start. Today, 75% of the fares are paid with open-loop, while the MTA keeps operating the new close-loop card, the mobile app and conventional tickets.  The project started in 2019, and because of the delays, MTA engaged with two new suppliers to complete the rollout.

Even though the MTA was the first operator globally to offer concession discounts to passengers using bank cards, the absence of a cohesive omnichannel payment strategy has limited the full potential of these benefits for both the MTA and its customers. As noted by Mobility Payment magazine, the current approach, which involves managing each payment channel through separate providers, creates inefficiencies. Without an interconnected strategy across all channels, the MTA is missing out on the full advantages that an omnichannel system could offer in terms of operational efficiency and customer experience.

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Unlocking the Full Potential of Public Transport with an Omnichannel Payment Strategy

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For public transport operators, an omnichannel payment strategy is a strategic choice that drives customer intimacy and increases the accessibility to their service. By adopting cross-channel acceptance, operators can streamline revenue collection, gain valuable data insights, and reduce friction.

Whether it’s reducing costs, enhancing security, or optimising services, a modern omnichannel perspective on payment is key to running a successful mobility service that meets the evolving needs of cities.

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Vayapay: providing frictionless payment for urban mobility

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At Vayapay, part of the XPP group, we offer an out-of-the-box omnichannel financial solution tailor-made for mobility, provided in SaaS mode. The Vayapay Smart Payment Platform accepts tap-to-ride, in-app/online, and vending payments links them to the traveller profile and shares business-essential data with the operator so they can optimise their service using the newest AI technology

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The platform is built to integrate and introduce the newest fintech innovations that enable you to implement an omnichannel payment strategy according to your business needs.

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Vayapay delivers frictionless payment for urban mobility.

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