Open-Loop Payments in Public Transit: The Unjustified Expectations

1 minute read


The more I get involved in open-loop payments in public transit, the more I’m noticing an alarming trend: many proponents, including vendors, banks, and card networks, seem to lack a comprehensive understanding of what they’re advocating for.

While contactless payments have clear advantages, the benefits often associated with them are either non-existent or ambiguously proven. There’s an oversimplification of the complexities that come with their implementation, creating a facade of cost-effectiveness and efficiency.

Public transit agencies, lured by the promise of eliminating cash handling and maintenance of ticket vending machines, often end up dealing with cash, maintaining ticket vending machines, PLUS managing the open-loop payment system.

We must scrutinize beyond the surface when adopting new technologies. Open-loop payments are not a panacea for fare collection, and all facets of its implementation must be taken into consideration before endorsing its widespread adoption. Let’s strive for informed decision-making in our push for technological advancements in public transit.

BTW, are you aware of any public transit systems that have FULLY phased out cash acceptance, “closed-loop” cards, and ticket vending machines in favor of open-loop fare payments only?

PS: Please find the TL;DR picture below.

Open Loop Fare Payments Unjustified Expectations