MOBILITY AS A SERVICE Contactless payments and the future of Mobility as a Service
According to recent figures from Mastercard, Europe is leading the way in contactless payment adoption. Today, one in two payment transactions in Europe are now contactless.
Shops are no longer the only place where contactless payments are expected as standard. Consumers are now used to seamless payments across a variety of daily transactions, including transport.
With the COVID-19 pandemic, paying by cash on public transport is in decline and is being replaced by contactless credit and debit cards, as well as Apple Pay, Google Pay and pre-pay travelcards. App-based payment systems are becoming mainstream and are now widely-used for ride-hailing and ride-sharing services as well as car clubs and bike share schemes.
In connected cars, tokenization is enabling cars to make payments for surrounding services such as electric car charging, car parking and drive-in services like fast food. At the core of these payment solutions is convenience. From a retailer’s perspective, the less barriers there are to payment, the more likely consumers will be purchase.
Let’s take a closer look at how contactless payments are impacting the future of Mobility as a Service (MaaS).
Congestion charges and tolls
In a bid to reduce private vehicle use in cities, congestion charges and tolls are becoming increasingly common. Traditionally, toll payments are collected at toll booths, where drivers are required to pay in-person from their vehicle. However, toll queues are one of the biggest pain points for consumers, who increasingly expect speed and convenience in payment transactions.
As such, an increasing number of cities across Europe are implementing contactless payments into their toll systems. In some cases, toll systems can recognise vehicle license plates, eliminating the need for vehicles to stop at payment stations altogether. Such systems are in place in cities like London, Singapore and Stockholm.
Stockholm’s toll system was developed by IBM and automatically calculates toll charges for each car. If vehicles are set up for automatic payments, the charges are applied there and then. If the vehicle isn’t registered for automatic payments, invoices are sent directly to the vehicle’s registered address. Three years after being introduced, IBM’s system reduced traffic wait time by 50 % in the city and encouraged 60,000 more passengers to take public transport. Vehicle emissions also dropped by 14 to 18 %.
Gone are the days when refuelling meant having to pay at a fuelling station forecourt. Nowadays, most fuelling stations enable ‘pay at the pump’ services, where drivers simply refuel and pay using a credit or debit card via a payment machine.
A more recent development is the ability to make a contactless payment through a mobile phone at fuel pumps. ExxonMobil, for example, recently announced its two-in-one contactless payment solution, which uses Near Field Communication (NFC) technology in combination with QR codes. The system enables drivers to scan the QR code using their mobile phone and authorise payments using Google Pay, Apple Pay, or the Exxon Mobil Rewards+ app.
And as we might expect, contactless payments are fast-becoming the standard for electric vehicle charging. Financial services company, CCV provides payment solutions that enable customers to pay for electric vehicle charging using chip-and-pin or contactless payments on the go. Customers can also pay using Apple Pay, Android Pay, Samsung Pay and Smartphone wallets, meaning customers only need to carry their mobile phone when recharging their vehicle.
CCV’s system also works alongside eCommerce platforms via apps or mobile websites. Customers can log into a web platform and pay for their charge at that location.
As we edge ever-closer to fully-autonomous vehicles being a reality, it’s widely expected that they will become vehicles for payment as well.
A recent development in this area is Quest Venture Partner’s investment in San Francisco-based company Car IQ. The company is developing a payment gateway that will enable vehicles to automatically connect to bank payment networks and pay for their own services, without human interaction. The platform will eliminate the need to use credit cards to pay for vehicle services like maintenance, parking and fuelling.
Amazon is also rumoured to be testing eCommerce solutions with autonomous fleets. Recent reports of Amazon trailers being transported by Embark autonomous trucks is considered by some as evidence that the tech giant is funding pilots for driverless delivery and logistics.