Why contactless payment
for NYC transit is a big deal
(and something of a risk)

tap-screen-brandsBy the time you see this post, New Yorkers will be covering fares on selected subway routes by means of the city’s new, contactless payment system. 

In accordance with governments’ propensity to come up with acronyms, the city has named the service OMNY, for One Metro New York.

Whether New Yorkers embrace OMNY remains to be seen. My figurative money says they will. Meanwhile, the city’s Metropolitan Transportation Authority (MTA), Visa, and Chase have put literal money on it.

You may wonder why I consider MTA’s jumping aboard the contactless payment bandwagon newsworthy. After all, with contactless payment having attained some ubiquity by now, opt-ins by various verticals and major chains have long ceased making headlines. Another merchant accepts contactless payments? Yawn. Tell me something I don’t know.

Why it’s news

MTA’s going contactless is news largely because the expression “in a New York minute” has some basis in fact. 

A minute comprises 60 seconds in most places. But a New York minute, as the late comedian Johnny Carson put it, is “the interval between a Manhattan traffic light turning green and the guy behind you honking his horn.” 

Nowhere is time a more precious commodity than when you’re trying to board a New York subway. If you don’t believe me, I invite you try this experiment: Stand at a turnstile and fumble with your wallet for a few seconds. Chances are a chorus of protest will swell behind you in … well, in a New York minute. As PYMNTS.com editorialized, the New York City mass transit system is …

… an unforgiving environment where people are famously told not to look too long at other riders, so you can imagine the frustrations in store if those payments should fail while someone is trying to catch a subway to work … according to Visa statistics, 67 percent of riders have missed a train while waiting in line to reload a fare card. In addition, 83 percent of consumers said they’ve had trouble getting their fare cards to work at turnstiles, and 66 percent have left funds on transit cards (the definition of leaving money on the table).

Which means that OMNY had better work, and work right, the first time, or mayhem may ensue. To minimize the mayhem risk, plans are not to roll out OMNY across all subway stations and bus routes until October of next year. For the time being, MTA is slated for a small-scale test run beginning on May 31. 

MTA’s chief revenue official Al Putre, reports AM New York, is all too aware of what happened in 2013 when the Chicago Transit Authority—the transportation organization, not the band—launched contactless payments system-wide without first testing small: 

Chicago essentially flipped a switch, transitioning to a similar tap card payment model, which led to mass confusion, a host of bugs and other payment failures. The snafu resulted in the Chicago Transit Authority granting almost a million free bus and train rides in the first weeks of the launch, according to the Chicago Tribune. “I don’t want eight million people tapping right off the bat,” said Putre … “They did this in Chicago. They almost fired the mayor!”

OMNY is driven (so to speak) by software developed by San Diego firm Cubic Transportation Systems. Cubic also designed Chicago’s system. Unlike Chicago’s system, however, MTA will be the first U.S. transit agency to use Visa’s Global Transit model. This Visa describes as …

… a back-office framework to manage contactless payments regardless of transit operators’ size or fare structure. The Visa model enables operators to offer a range of flexible fares, including fixed fares, distance- and time-based fares, and multi-modal fares, as well as features like fare capping, concessions, and delay refunds.

Riders can use OMNY in a variety of ways. Downloadable apps will allow riders to tap smartphones and wearables to cover fares. Or, riders can tap a Chase-issued Visa contactless card. Chase was a major player OMNY’s development. According to Bloomberg, there is no shortage of Chase contactless cardholders:

Today, about 20 million Chase customers have Visa contactless credit cards …That will also include debit cards for Chase Secure Banking customers, a low-cost bank account that opens Chase accounts to even more New Yorkers and public transit riders.

OMNY is set to launch on May 31, so, again, by the time you see this post, we’ll have some indication as to how well New Yorkers accept it. You could call May 31 a “soft opening.” Besides limiting access to a few test locations, MTA has wisely placed “TEST PHASE” on OMNY terminal screens. The hope is to iron out wrinkles on a small scale for a wrinkle-free rollout in October 2020. As Putre said, “You only get one chance to get this right.”

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