The way consumers pay to ride transportation systems in major cities can influence payments habits for the public.
Issuers and credit card networks want to be a part of the ongoing introduction of contactless payments in the nation’s biggest transit system, New York City’s Metropolitan Transportation Authority (MTA), because they know it’s an opportunity that will boost their revenues and get them on top of the next big thing.
At the end of May, New York’s transit system began accepting contactless cards at 16 subway stations and on all Staten Island buses in its program, which will eventually reach every form of transportation in the city during the next year and a half.
How Issuers and Networks Are Responding
To prepare all commuters for their chances to tap-and-pay, major issuers are falling over themselves to unveil contactless cards.
What the major issuers have done:
- JPMorgan Chase & Co. has already issued 20 million contactless Visa credit cards. The bank started doing in 2019. Additionally, Visa’s card comply with the latest EMV contactless standards, which it began enforcing in the spring.
- American Express offers contactless functionality on most of its cards; the scheme has issued 38 million credit cards in the first quarter of this year.
The public should expect other issuers and schemes to follow, and to look for new opportunities, as well.
In It for the Habit
Issuers and card networks want to be a part of New York’s system because they know 8 million commuters using the contactless card system, likely twice a day, at least five days per week, has power. The more it becomes parts of their daily lives, the more these consumers will use their contactless cards to buy groceries, pay for a hotel room, or buy a new pair of boots.
This is kind of buying behaviors is something no issuer or card scheme is going to want to miss.
Other Reasons Issuers and Credit Card Networks Are So Interested
Issuers and credit networks are chomping at the bit to work with mass transit systems because they know how much revenue is at stake. After contactless systems are fully implemented in New York, the major credit card schemes could be making a total of more than $60 million annually in card transactions revenues.
This is especially great news for schemes, like Mastercard and Visa, that are always looking for new strategies to increase revenue as retail growth stalls.
As the unveiling of the contactless payment system in New York continue to unveil over the next 18 or so months, watch to see how many embrace it, whether there are any major problems with the system, and what types of flaws it needs to address.
If all goes as everyone hopes it does, this could be a major milestone in the world of contactless payments. Though many still believe there will always be a place for cash, the success of the transit system’s payment system could be the break that cashless advocates have been waiting to see. Nowhere near the end, but definitely a possible beginning of something.
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