Our Vision of Open Payment: The Start of a Major Transformation in Ticketing

This deliberately provocative sentence is a good illustration of just how stable the mobility ecosystem has been for some time and how it has been largely dominated by traditional ticketing systems.

What are the far-reaching transformations within the mobility sector?

Things that are well established tend to change. The personal mobility sector is undergoing a far-reaching transformation that began less than 10 years ago and still remains strong. It would probably be easily summarised as: Apple launched the iPhone, Uber invented shared mobility, TfL launched Open Payment, and MaaS Global invented MaaS!

A number of other factors have contributed to this transformation, including omnipresent connectivity, regulation in France (MAPTAM, NOTRe, and LOM), as well as the notable rise of the subscription economy driven by other sectors such as entertainment (Netflix) and music (Spotify, Deezer). Lastly, the appeal of pay-per-use and the advent of contactless payment have upended the once stable world of public transportation ticketing. 

What are the technologies behind these changes?

These trends are based on major changes in IT infrastructures with the widespread use of cloud services versus hosted platforms. The widespread use of APIs renders even recent IT systems quickly obsolete and ill-equipped to respond to this strong trend toward openness. Have we actually entered the era of Open Ticketing? Not yet, but it's our firm conviction that we're getting there by developing our WL Tap 2 Use product.

How did our value proposition mature?

We began to make this observation in 2015 when we approached this sector with an unsuccessful attempt to market our traditional ticketing product in France. Our conversations with public authorities also taught us the difficulties they have in developing old systems based on on-board computers that are closed and ill-equipped for this on-going transformation. On the back of this failure, we decided to design a disruptive product that was account-based, open, and capable of gathering mobility services consumption transactions from a contactless bank card and other identifying media. This product is built around a central account that gathers all the information linked to the customer. As a Digital Services Company, we make maximum use of APIs internally and externally because the era of the monolithic ticketing system is over and open systems are now essential.

What are the key benefits of Open Payment?

Open Payment marks a paradigm shift as payment is made "with what we have" (a contactless bank card, which actually belongs to the cardholder's bank). In the future, we will probably pay for our travel using other identifiers, such as "what we are" (physical, vocal and biometric characteristics), and validation will undoubtedly be implicit and passive. The smartphone and its successor will probably have replaced the validator. We're looking far ahead. 

Nevertheless, we will still need to pay for and manage the e-banking risk and collection. Post-payment (of which Open Payment is a part since the bank authorization request is done asynchronously) is becoming increasingly popular because customers pay the best rate at pretty much the time of consumption. The current pandemic could permanently change commuting habits for some 40% of people eligible for remote working. Public authorities will probably have to come up with new fare products so that public transportation remains an attractive option. These new products will therefore need to be flexible and potentially include post-payment for maximum benefit to passengers. It will therefore be essential to better manage the e-banking risks in financial transactions linked to mobility. As we see it, payment with highly secure mechanisms will be at the heart of these systems. As experts in e-banking, we are best placed to meet these challenges.

Continuous adaptation to new European regulations and initiatives

Europe is launching a European Payments Initiative (EPI). The EPI aims to create a unified pan-European payment solution based on instant payments / SEPA Instant Credit Transfer (SCT Inst), offering consumers and merchants across Europe a dedicated bank card, a digital wallet, and peer-to-peer (P2P) payment solutions. The solution intends to become a new payment standard for European consumers and merchants for all transaction types, including in-store, online, for cash withdrawals, as well as

solutions for international payment schemes. This initiative should be in an operational phase by 2022 and will have a significant impact on all merchants. It will bring other media and other channels to Open Payment, and to account-based ticketing more generally. Here again, Worldline, as a third-party acquiring shareholder of EPI, is well placed to support its customers in this evolution.

To find out more about our Open Payment solution, please contact pierre.veillon@worldline.com.