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Transport for London's decision to cancel its contract with the company that runs the Oyster fare-collection system appears to provide more evidence the transit authority wants to move to open-loop payment for subway, bus and train fares in London. On Friday, Transport for London said it was exercising its option to cancel the £100 million-a-year contract (US$191 million or 128 million euros) with vendor consortium TranSys in 2010, five years early. Transport for London says it wants to save money. "We are looking at more cost-effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years," Shashi Verma, the agency's director of fares and ticketing, says in a statement. As CardLine Global sister publication Cards&Payments has reported, at least one Transport for London official has said the agency eventually could save about £60 million per year by reducing expenses from selling prepaid Oyster cards and paper tickets. Instead, commuters could tap their Visa payWave, MasterCard PayPass or other contactless banking cards to pay, transit officials suggest. The transit authority plans to begin its normal replacement cycle for more than 20,000 Oyster terminals starting in the latter half of 2010 and is seriously considering equipping them to handle EMV-capable banking cards, Oyster or a similar prepaid application, and the interoperable transit application issued in other UK cities. "The thing we want to do is link our ticketing system as closely as we can to the financial-payment industry," Verma said at a recent conference. "The ultimate vision should be (that in) the same way you pay for everything in your life with credit and debit cards, you should be able to buy transport." Banks in the United Kingdom are beginning to roll out contactless payment cards for retail purchases. But before Transport for London accepts the cards, the authority must work out such details as the amount of "merchant" fees it would pay banks. The authority also would have to offer options for unbanked customers.
