London commuters are supposed to be excited about the prospect of their Tube underground rail system adding acceptance of any bank’s contactless payment card. But it may take time for them to break the habit of using the popular Oyster contactless prepaid transit card.

Transportation for London announced it would install contactless card readers on all of the city’s 8,500 rail cars (or buses, as they're called in the UK) later in the year, allowing riders to charge fares directly to their bank accounts.

In announcing the new payment option, transportation officials cast it as a potential backup option if commuters forget, lose or don’t have enough money on their Oyster card.

Commuters in London generally buy a prepaid Oyster card, which provides a discount, or pay an extra pound in cash. Since these are the only two options, some commuters could find themselves holding up lines if they realize too late that their card is low in funds.

Similarly, the Chicago Transit Authority announced last summer that it would develop an open-loop contactless payment system for its buses and rails, allowing commuters to use any bank-issued credit, debit or prepaid card.

Transportation for London initially planned to launch bank contactless card acceptance on London buses in time for last summer’s Olympic Games, but the project was delayed, says Zil Bareisis, a London-based Celent analyst.

While an Oyster card can run out of funds, most commuters set their cards to reload automatically, Bareisis says. “I am not sure how big of a problem it really is [in delaying commuter lines],” he adds.

Commuters can run out of funds on other contactless debit cards as well, though “the likelihood of that, generally speaking, is lower than in the case of prepaid cards,” Bareisis says.
The introduction of general contactless cards on the transit systems will have some welcome benefits, Bareisis adds.

“Using regular contactless cards enabled by either Visa’s payWave or MasterCard’s PayPass allows customers to make trips without buying a separate card – a feature particularly attractive to visitors and tourists,” he says.

However, the new card reader setup can’t easily support complex pricing or discounts, Bareisis says.

In any case, the Oyster card won’t be disappearing from the pockets of London commuters any time soon.

Bank-issued contactless cards, while growing in popularity, remain uncommon in the UK, Bareisis says.

“When you add the issue of fee management, which in a city such as London can be very complex with different zones and types of ticket, I can see the two approaches," Oyster and bank-issued cards, "co-existing for some time to come,” he adds.
Gareth Lodge, also a London-based Celent analyst, adds that Oyster will remain the only way to pay on certain bus routes.

Oyster is also guaranteed to be the cheapest method of payment, Lodge adds.

Previous attempts to modify the London transit payment system determined other methods could not match the Oyster cards' speed and efficiency. Payments from a Near Field Communication-enabled smartphone took 200 milliseconds longer than payments from an Oyster card, for example.

Despite having some drawbacks, contactless cards and mobile payments are finding a niche in the transportation industry, even if they are slower to achieve widespread adoption. 

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