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TfL’s open payment system

TfL’s open payment system is moving people

With a quick tap of a card, more than four million commuters, tourists and locals pass through a Transport for London (TfL) ticket gate every day, paying instantly for journeys across the UK capital's buses, Tubes, trams, trains and waterways.

Seamless payments using customer-owned bank cards and mobile wallets are one of the British transport authority's biggest successes. In just a few years, TfL has created one of the world's biggest Open Payments systems, collecting, allocating and apportioning around £1.4 billion a year in revenues alongside £1.8 billion in Pay As You Go (PAYG) revenue through their existing card-based Oyster solution - making it one of the UK's biggest settlement systems outside of financial services.

Oyster cards arrived in 2003 enabling travellers to pre-load annual and monthly season tickets to their plastic card. In January 2004, TfL launched on PAYG Oyster allowing customers to top up their card and have continued to enhance the offering over time. Then in 2012, TfL became the first public transport provider in the world to offer Open Payment by contactless credit or debit card. This system has since been used for more than a billion pay-as-you-go journeys1, and has been credited with driving the popularity of contacless cards in the UK.

But the card-based benefits which Londoners now take for granted - such as daily and weekly capping of their travel costs, and the ability to pay instantly - are yet to become a reality for many other public transport users around the world. For transport authorities hoping to introduce their own successful Open Payments fare collection systems, access to TfL's knowledge represents a huge opportunity.

To enable this, Transport for London (TfL) has signed a landmark contract with KPMG in the UK, supplementing its own, established capabilities, with TfL's deep technical expertise in the delivery of consultancy services to transport authorities delivering fare payment programs and initiatives. Initially, KPMG will offer access to TfL's expertise associated with fares and ticketing through its global network of member firms.

Ben Foulser, Associate Director and Head of KPMG's Transport Technology team in the UK, is leading the pilot project alongside Ed Thomas and Dave Yip. He says “TfL and KPMG have collaborated on projects for years, and KPMG professionals come armed with years of experience working with some of the world's biggest transport authorities on their fare collection programs.”

This relationship means member firm clients who want to leverage the KPMG's expertise working on major public transport systems - from Melbourne to Chicago, New York and Singapore - can now also combine this with TfL's proprietary, in-house knowledge. “Anyone can look at TfL's systems and say, `roughly, I know how this works,'” Foulser says. “But there are intricacies and complexities in how they're configured, how the analytics processes work, and how the networks and algorithms they've developed have been designed. What KPMG is seeking to give clients is access to the design principles that went into those and the lessons that TfL has learned through the development, implementation and operation processes.”

Foulser says exposure to TfL's proven fare and ticketing payment models could vastly cut down development time for clients. “It's about de-risking programs for clients by sharing TfL's knowledge and experience - why their systems have been designed in the way that they have, what trial and error processes TfL went through. KPMG professionals can then expedite delivery for clients, because they won't have to go through the same process of trial and error with their own suppliers, or in-house.

Foulser adds that clients working with KPMG member firms could also benefit from cost savings that can be created by adopting TfL's methods. One upside of offering contactless payment, for example, is the reduction in the number of ticket vending machines needed at stations. “Each of the vending machines you see at a station can range in cost on average between £20,000 and £40,000 per vending machine and buses up to £10,000 per Electronic Ticketing Machine and associated devices; they're very expensive bits of infrastructure,” he explains.

Crucially for clients who want to make a smooth, rapid transition away from paper ticket and coin-based payments, TfL has already done the legwork needed to make contactless card transactions work. “There are a number of different rules that are determined by the card schemes themselves, such as MasterCard, Amex and Visa,” Foulser says. “They're complex to implement, but TfL has already done a lot of the work in that space to make sure they can adhere to the card schemes' requirements whilet also minimizing their own liability.”

The technology and experience TfL deploys to move millions of people around its network each day is held up as the global benchmark for public transport systems2. Combined with KPMG professional's expertise and insight, this new agreement could transform the way commuters move through transport networks around the world. In Ben's words, for KPMG member firm clients, it's “a big opportunity to expedite delivery - and get it right the first time.”

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