February 29, 2024

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Enabling seamless access to urban public transport systems around the world

Enabling seamless access to urban public transport systems around the world

Today over
50%
of the global population lives in cities. It’s expected to increase to
70% over the next 20 odd years. In the face of growing population and legacy
infrastructure, public transportation is one of the key challenges faced by
cities. It is a critical issue that cities aspiring to be smart have to
address. It is related to economic growth, competitiveness, sustainability and
ensuring better lives for citizens.

As a global
payments platform, Mastercard is closely collaborating with governments around
the world to support them in their endeavor to create more efficient urban
transportation. OpenGov spoke to Carlos Menendez, President, Enterprise
Partnerships at Mastercard to learn more about these partnerships and the
resulting benefits.

Quick return on
investment through operational efficiencies

Around the world, there is a desire to make investments in
various projects to make cities smarter. But many governments face a shortage
of capital.

Mr. Menendez said, “Over and over the projects that we have
seen approved are the ones that get a faster return.” Because election cycles play
a role in investment decisions.

Transit is one such area. Working
with cities like London
, Mastercard estimated that anywhere from 12 to 14%
of revenue is spent on collecting fares in a city. By shifting to an open loop system,
enabled by a globally interoperable technology like that of Mastercard, the
cities can save significant amounts of money.

For example, London saved around 100 million Pounds annually
by moving from proprietary technology like Oyster to an open loop contactless
system, which accounts for nearly 50% of all pay as you go ridership in London
today.

London was already using a cashless system. For more than a
decade, Transport for London (TfL)
has used Oyster, a pre-loaded contactless smartcard, as its ticketless payment
system for fares on bus, Tube, tram, DLR, London Overground, TfL Rail, Emirates
Air Line and most National Rail services in London. Doing so has eliminated the
need to use cash to pay for fares, helping to reduce long queues during peak
travel times.

But Oyster has significant operating costs. Volumes of new
Oyster card issuance in excess of 500,000 cards per month resulted in a hefty
bill for purchasing, preparing and distributing new cards. There were
substantial costs as well to maintain top-up network, collect cash from
stations and commission for third parties to top up Oyster cards. Moreover, the
requirements for the Oyster system were finalised before the Internet went
mainstream. Hence, it did not have a straightforward way for customers to
manage products stored on Oyster cards online which had to be retrofitted into
the system.

In response to these issues, TfL launched the Future
Ticketing Programme in 2014, enabled by Mastercard’s contactless payment
technology. Commuters could use a contactless-enabled Mastercard® or Maestro®
card, or a NFC-enabled smart phone. In just over a year, the cost of collecting
fares dropped from about 14 percent of revenues to just below 9 percent.

It also brought another benefit. For the nearly 20 million
international individuals1 who visit London each year, as well as residents who
infrequently use the transit system, the Oyster card system could be
problematic.

“Tourists who are figuring out the system are slowing down
the system. They don’t know where to buy a ticket, they don’t know where to
stand, where to go. The ease of going through the system with their existing
card from their home country leads to better journeys for tourists and also
improves the flow for the city itself, to the benefit of the locals,” Mr.
Menendez explained. 

At the moment, Mastercard is working with over 100 cities
around the world on similar transit payment systems, including the Land
Transport Authority in Singapore
.

Data insights for
better journeys and enhanced sustainability

After the data on the journeys starts getting digitised,
Mastercard has worked with cities like London and Chicago to improve the
journey itself. Anonymised payment data can be captured real-time. It can help
city transport authorities to optimise public transport planning and advise
commuters on most efficient routes at a particular time.  

In a recent
trial in Chicago
individuals signed up to receive texts when crowding is to
be expected on a particular line due to sporting events, and almost 20% of the
people shifted to alternate routes.

Mr. Menendez said, “So, you find that citizens themselves
are responsive and they appreciate the fact that they can get a better and
easier journey by getting better information. The whole digitisation of the
data underneath from using cards and phones facilitates that.”

Mastercard is also working with Transport for New South Wales to
understand the real-time flow of individuals through the transit system as they
go shopping, to restaurants or for enjoying nightlife. (Mastercard and
Transport for NSW introduced
contactless ticketing payment to Sydney Ferries wherein, commuters can use
their Mastercard contactless card or mobile wallets that have enabled
Mastercard cards to tap on.)

Harnessing data analytics and technology to help urban
planners would reduce emissions also, resulting in better air quality and associated health benefits.

Urban transportation is one of the key contributors to CO2
emissions globally. Mastercard entered into a partnership with the C40 Cities Climate Leadership Group (C40)
in 20156 to connect Chinese and global megacities in a ‘Mobility Management’
network.

The C40
Mobility Management network
spearheads the sharing and activation of best
practices to better integrate and optimise the various modes of public
transport. It supports city efforts to reduce Greenhouse Gas emissions by improving
integration across transit modes, making public transit more attractive and
easier to use, as well as reducing and re-distributing travel demand.

Financial inclusion

Working with cities on transport systems ties into Mastercard’s
financial inclusion commitment
to reach 500 million people
previously excluded from financial services and
the formal economy by 2020.

It’s important that the smart city is for the benefit of
many, and not just a few. It's important to ensure that the people who would
benefit the most from time and money savings don’t get locked out. 

“If you are working a day job or a week job, you will be
getting paid in that fashion. You don’t have the benefit of buying a monthly
pass or a weekly pass. You literally have to wait in line each time for your
one-time journey,” Mr. Menendez elaborated.

Mastercard works together with the government and banks to
get prepaid cards and debit cards into these individuals’ hands.

For instance, Bogota in Colombia has a bus rapid transit
system. There Mastercard worked
with the government and a bank to provide contactless debit cards to the people.
There are over 2 million people using that particular system in Bogota.

In Vietnam, Mastercard is working with a mobile operator to
give customers prepaid cards. Multiple functionalities were built into the
card. It can be used for topping up airtime, paying bills, paying for
transport.

Mr. Menendez said, “We recognise that cities are different
and that they need unique solutions.”

But at the end of the day, they share many of the
objectives. Creating a more efficient transport system, saving costs, improving
air quality, enabling seamless journeys for residents as well as tourists, and
ultimately about moving towards a healthier, better and safer life for citizens.

And this is where having technology that is scalable to
thousands of locations around the world can provide a leg up. 

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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