In very simple terms, that is what we do. We put ticketing systems in place that allow your customers to give you money in return for travel on your services.
There may be a wide variety of product types available to your passengers, but ultimately they all do the same thing.
In the early days of transport ticketing, there was only one payment option – cash. Today things are not quite so simple, and as a transport provider, it is in your interests to make it as easy and painless for your customers to pay as possible. Purchasing a ticket (in person, online or via mobile) should be easy and painless, if it is not then you have a barrier between you and your customer, and that is never a good thing.
In this blog post we take a very quick look at the most popular payment options available today, the merits and downsides of each, and some thoughts on how each one will develop over the next few years.
Cash
- Summary: There has been a steady decline in the use of cash over the past decade, this has been fueled both by the passenger (people are carrying less cash) and by the operators (pushing travel cards and mobile apps). Large cities have been leading the trend for transit ticketing with products like the Oyster Card and many city networks are now already cashless. In short, cash is on the way out.
- Advantages: Good for micropayments (under £5).
- Disadvantages: Significant risk of fraud. Increased risk to staff from attack/robbery etc. Unaccountable.
- Cost: People often forget how much cash costs to process and bank. First of all you need to allow staff time to cash up accurately at the end of the shift, you then need to pay someone or the bank to count it and enter that in your accounting system, you have to pay a security firm to get it to the bank and finally then bank will charge you to bank it (about 0.2%). As an estimate we think the cost for one of our clients to cash up, count, deliver and bank £1,000 is around £45 or 4.5%
- The future: Cash needs to be separated into two camps when it comes to transport operators. First is it’s use on assets for micro-payments (under £5), this is continuing to decline although at a slower rate than other areas. If someone is buying a £3.00 single on a rural bus service or pedestrian ferry then cash is still going to be popular for at least the next three years. For larger payments (online accounts, travel cards, season passes etc) cash is already almost obsolete and removing it as a payment option is already commonplace in the transport sector.
Card
- Summary: Credit and debit cards are by far the most popular payment option for most transport tickets sold today, either online, on mobile, in ticket offices or on assets. The introduction of contactless has given cards a massive boost and the option to take smaller payments without the hassle of a pin entry has made them ideal for many transport operators.
- Advantages: Very easy and nearly everyone has one.
- Disadvantages: Cost of processing fee.
- Cost: The cost to process card payments varies significantly depending on your merchant, how much the process and how good you are at negotiating. As a guide, we would expect and operator turning over £1 million turnover, with 50% of all payments going through cards, to be paying around 0.45% on debit cards and 1.5% on credit cards.
- The future: It is likely that you are already taking card payments, the question is are you taking them at all your sales points? Or more importantly are you offering customers the chance to pay by card on your assets? There are some challenges in getting contactless and chip and pin readers installed and networked on mobile ticketing devices, but these are not insurmountable and we suggest if you don’t yet take card payments on your ferries, buses or trains then you make it a priority in the next couple of years.
Apple & Android Pay
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Travel Accounts & Cards
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