Full speed ahead: New York's contactless fare system exits pilot

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New York's Metropolitan Transportation Authority is expanding its OMNY tap-and-pay system to 70 more locations, including busy Penn Station, following an eight-month pilot of open-loop contactless payments at 16 subways stations and certain buses.

Going contactless has been a bigger challenge in New York because of the size and complexity of its transit systems. In 2006 the MTA worked closely with Mastercard and Citi on a contactless payments trial at several subway stations, and in 2010 the agency tried again with a pilot involving 17,000 Mastercard and Visa users.

The MTA this month will begin aggressively scaling OMNY’s growth, aiming to add contactless acceptance at all of its 472 subway stations and most bus routes by the end of next year, the transit agency announced today.

The move will solidify New York as the epicenter of contactless payments in the U.S., where half of all cards already have contactless capability, according to Visa.

Bank of America cannily foresaw an opportunity when the MTA announced its latest pilot last May. Within a month, BofA began a mass-reissuance of 4 million contactless cards in three cities — New York, San Francisco and Boston — capitalizing on metropolitan areas where merchants and transit operators already are leaning into contactless acceptance.

Most other large issuers, including Chase and Wells Fargo, are rolling out contactless cards nationwide by mailing them to new customers or as replacements for older cards that are lost or expired.

New York's commitment to contactless mass-transit payments is long overdue, compared with other major metropolitan areas like London, which has had contactless transit payments for years. In Chicago and Portland, Ore., transit riders can tap to pay with any contactless device.

In New York, with little advertising, contactless usage on the MTA took off quickly and has steadily accelerated, reaching one million taps in the first three months, according to Visa.

Visa — which is collaborating with MTA along with other major card networks plus third-party digital wallets Apple Pay, Android Pay and Samsung Pay — said in a Wednesday press release it expects to see “exponential growth” of contactless payments in New York in the coming months as MTA begins adding contactless payment technology across its system.

Nearly half of all Visa cards issued to consumers in the New York area are equipped for contactless payment, and one in 10 face-to-face Visa transactions in New York is contactless, Visa said.

The OMNY contactless fare system — which stands for One Metro New York — will take three years to fully implement, according to MTA.

OMNY is projected to be available at all MTA locations some time in 2023. When that happens, the system it will combine fare payments and mobile ticketing across subways, buses and commuter rail in the NYC region, the MTA said. The agency plans to begin adding contactless and mobile payments on commuter rail lines including Long Island Rail Road and Metro-North Railroad in early 2021.

So far, the MTA’s contactless payments are full-payment fares, but as OMNY expands, it plans to introduce expanded fare options.

During the transition to OMNY, the MTA will continue to support the older closed-loop MetroCard and eTix, it said. The MTA forecasts that most riders eventually will use a card, wearable or a mobile wallet to pay. Beginning in 2021, MTA will introduce the OMNY Card, a contactless physical card that cash-based riders can reload at retail outlets and MTA kiosks, the agency has said.

OMNY ultimately will span a vast area with 10 times the ridership of Chicago, underscoring the complexity of replacing the old closed-loop system.

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Contactless payments New York City Transit Mobile payments Mobile wallets Wearable payments New York