Innovation in mobility payments: Now and what’s next

illustration of a bus ticket

The revolutionary era of mobility payments

It’s almost impossible not to notice how the mobility industry is no longer the same as before. For the average consumer today, digital technology is intrinsic to modern travel, from the minute one starts thinking about a journey, to when a destination is reached.

Innovation within the mobility sector is driven by a number of factors, including rapid technological advances as well as changes in social attitudes. Quantum leaps in engineering have given rise to safer and more energy-efficient modes of transportation with lower carbon emissions, while artificial intelligence and device connectivity are paving the way for smarter travel.

Trends reshaping the mobility landscape
Climate change

Governments are using advances in mobility technology to mitigate pollution and adhere to the Paris agreement and other carbon-reduction commitments.

COVID-19 pandemic

Paperless, account-based and contactless transport ticketing helped meet the need for safer and more hygienic ways to get from Point A to Point B.

Autonomous vehicles

Autonomous vehicles - if widely used in future - will form an important part of the MaaS ecosystem, and possibly obviate privately-owned vehicles.

Rise of alternative transportation

Changing social attitudes led to a rise in “greener” modes of transport, such as cycling or walking.

Booming app economy

Increasing digital advancements and mobile phone use have boosted the popularization of last mile transport services, such as bike or scooter.

Increasing consumer expectations towards payments

Travelers today want frictionless journeys, with the ability to pay their preferred way, securely, and in convenient ways.

The modernization of infrastructure and connected technology is merely one side of the upwards shift towards improving the customer experience within the mobility sector.

Driven by the app economy and the proliferation of frictionless payments across multiple purchasing channels available to shoppers, consumers today expect open and seamless transactional experiences to accompany the improved ease and convenience they’re getting with evolving mobility ecosystems.

Because customer satisfaction is at the heart of every future-forward city, there are now various ways for players within the sector – municipalities, transport operators and payment providers to name a few – to create value for increasingly sophisticated travelers and improve urban movement.

So what does the future of mobility look like? What are some standard and burgeoning payment innovations in the sector, and where do opportunities lie? Let’s take a look.

In Europe, passenger transport will increase 42% by 2050

In public transport systems: buses, trams and trains

Mobile ticketing

Mobile ticketing – where customers purchase, pay for, obtain and/or validate tickets using mobile devices – was first deployed in Europe’s public transport sector by Chiltern Railways in 2007. Since then, mobile ticket use has seen a steady rise, with research estimating that the volume of mobile ticketing transactions will surpass $66 billion globally by 2023.

Why is mobile ticketing appealing? For mobility consumers, it means heightened convenience when travelling on public transport systems, including being able to do away with cash altogether and taking up to 75% less time boarding.

For mobility authorities and service providers, mobile ticketing systems can help reduce hefty costs associated with managing a smart travel card scheme. For example, Transport for London spent $148 million in 2010 to manage its Oyster Card scheme.

Aggregated data from mobile ticketing systems can be used to optimize bus, tram and train schedules, which will help to reduce congestion and improve passenger satisfaction.

Mobile ticketing has also led to Direct Carrier Billing (DCB), where users can charge payments to their mobile phone carrier bill. DCB is already being used globally, with research pointing to its growth in the region to US$17.6 billion by 2027.

The global mobile ticketing market is set to grow by USD5.6 billion from 2020-2024

Open loop infrastructure

Contactless payments remove a lot of the friction when traveling on public transport networks, and its popularity is soaring. Our research shows that contactless payments in public transport will number over 18.7 billion by 2025.

Graph of growth in contactless mass transit ticketing transactions in millions

Open loop payments take contactless payments a step further, allowing travelers to pay with what’s already in their wallets. Letting customers use their regular contactless debit or credit cards, as well as Apple Pay and Google Pay, increases travel convenience exponentially.

Moving to an open loop payments infrastructure also means a better customer experience; removing any headaches associated with using closed-loop smart cards, such as the loss of preloaded funds, or having to consistently make top-ups just for commuting.

The best part? Open-loop, or account-based ticketing systems, can both automatically select the best available fare for the consumer while keeping payment processing down to a minimum. This helps bring in more cost-savings for consumers and public transport service providers alike.

Case in point: The city of London is now saving over £100 million (USD130 million) annually by embracing open-loop payments solutions

When travelling from A to B in the share economy

Changing social attitudes and regulation on reducing greenhouse gas emissions, along with the recent COVID-19 pandemic, have spurred the rise of ride-hailing and alternative transportation modes, such as shared bike and scooter schemes.

These have been directly fueled by the app economy and, in turn, subscription-based, tokenized and invisible payments made through mobile devices.

Subscription-based payments

Changing social attitudes and regulation on reducing greenhouse gas emissions, along with the recent COVID-19 pandemic, have spurred the rise of ride-hailing and alternative transportation modes, such as shared bike and scooter schemes.

These have been directly fueled by the app economy and, in turn, subscription-based, tokenized and invisible payments made through mobile devices Subscription-based payments Uber’s previous leadership in offering subscription-based payments is now seeing plenty of competition from last mile transportation and other ride-sharing and hailing services.

Subscription-based payments make a lot of sense; they not only guarantee income for the certain period into the future, but will in turn help lower carbon emissions and reduce congestion in big cities.

In future we expect to see subscription payment offerings being developed further, a few examples already in place including:

  • Lyft rolling out Lyft Pink in late 2019, a subscription-based membership plan offering riders a 15% discount car trips and other exclusive perks for a flat monthly fee.
  • Uber’s Uber Pass , which gives its customers across its varied divisions the convenience of paying a monthly fee for discounted rates when using Uber rides, UberEats deliveries, and scooter and bike trips.

Several independent digital payment means through the use of tokens – is extremely valuable in a context in an era where consumers are using an ever-increasing number of wallets supporting multiple channels and payment use cases.

With account-based ticketing, the ‘ticket’ a passenger holds acts as a ‘token’ or proof of purchase as well as a secure identifier of a customer’s account. Because it doesn’t expose a customer’s sensitive details (such as the primary account number or PAN), tokenization allows organizations to comply with the Payment Card Industry Data Security Standard (PCI DSS).

Applying tokenization to the share economy, a few players are already piloting ways to combine decentralized payment technology (i.e. blockchain) with ridesharing – a move slated to give more control to drivers and passengers. Here’s a few examples:

  • In 2019, Lyft partnered with Estonian blockchain startup Solve.Care , allowing users to schedule Lyft rides to doctors’ clinics, hospitals, and pharmacies, and make automated payments using native utility token SOLVE via their Solve.Care digital wallets.
  • DRIFE, an app built on blockchain technology , is aiming to disrupt the traditional taxi-hailing model by taking zero commissions from drivers, and offering incentives for both drivers and riders to use the DRIFE token (for example to earn bonus tokens in the form of free miles for early adopters).

Private cars – now vehicles for seamless payments

In-vehicle payments

In Europe, car use still largely outweighs any other mode of transportation for passenger transport. Recent studies by the Europe Commission showed that the total travel in the region (in passenger kilometres) were 83% by car, 9% by bus and 8% by train. And therein lies a huge opportunity for mobility service providers.

Graph of passenger transport by train, car or bus 2017

Historically, the relationship between driving a vehicle and payments for its associated costs – such as fuel and parking – have been kept separate.

Contactless “tap-and-go” payments are making things simpler for drivers today, but as private vehicles become increasingly connected, we’ll see a rise in innovative business models that leverage the car as a platform to ease the payments process.

In other words, in-vehicle payments are the next-gen tech enabling a smarter way of life for drivers and passengers globally.

While still in its nascent stages (with pilot programs still being held worldwide), the applications for in-vehicle payments could include toll fees, fueling, charging electric vehicles (EV), maintenance, parking, entertainment, and more.

According to research by Kaleido Intelligence, Europe is expected to see rapid growth in in-vehicle payments towards 2025, reaching $73 billion in combined payment volume for fuel, EV charging and e-commerce occurring directly from the vehicle. Some existing initiatives include:

  • Shell and Jaguar Land Rover partnered to launch in-vehicle payment services at Shell stations in 2017 in the UK, while BP launched a mobile app for fuel payments across its forecourts in the country in 2018 .
  • Visa and SiriusXM Connected Vehicle Services teamed up to launch a new in-vehicle solution supporting payments for gas, parking and tolls, as well as tokenization.
  • Daimler launched “Mercedes Pay” in 2019, an electronic payment platform which supports in-car payment for parking and other services, including paying for fuel via an app.

While in-vehicle payments are an exciting innovation in mobility technology, it’s worth noting that the closed-loop nature of these developments present a challenge to widespread adoption.

For example, it’s hardly practical for consumers to download a different app to be able to take advantage of payment offerings from each of Europe’s diverse fuel brands. The same goes for current innovations in digital parking payments – a lack of a common platform for all players limits potential traction.


Payments have traditionally divided vendors in the mobility space, with services that tend to be siloed and competing with one another, rather than working together to provide a unified service, but things are changing.

City governments and mobility operators are trying to improve passenger experiences by integrating multi-modal transport services, including buses, taxis, rail and metro into one compelling offering for on demand city travel services. This is also known as Mobility-as-a-Service (MaaS).

For MaaS to function optimally, payments must be smoothly routed to all participating providers to cover the cost of their services while providing a frictionless experience for the end user, including proving identity.

So we see a future where mobility payments become such that travellers are able to exercise full flexibility and pay for every leg of their journeys with complete freedom, whether it’s on a pay-as-you-go basis, or on a subscription model.

Mobility Payments shaping MaaS
Closed Loop
  • Transit system smart cards e.g. Oyster card
  • Prepaid cards e.g. Paris Navigo Decouverte Pass
Open Loop & Contactless
  • Credit and debit, or prepaid cards
  • Mobile devices and wearables incl. RFID and NFC tech
Digital Payments
  • Digital Wallets e.g. Apple Pay and Google Pay
  • Subscription- based
  • Tokenized payments
Peer to Peer
  • PayPal
  • Venmo
  • Zelle
  • Cash App
QR Codes
  • TenPay
  • UnionPay
  • WeChat Pay
Up and coming tech
  • Blockchain
  • in-vehicle
  • machine to machine (e.g. in autonomous vehicles)

MaaS is still a fairly new concept globally, but its potential for growth is unprecedented, and there are already some notable examples in cities:

  • Whim app, Helsinki, Finland
    Launched in 2017, The Whim app is a pioneering mobility service that covers public transport, taxis, car rentals, car- and bike-share modes. Using the app, users can build a multimodal route, and pay for every step of their journeys individually or by a monthly subscription.
  • The Mobility Account (Compte Mobilité), Mulhouse, France
    Launched in 2018, the Mobility Account used in Mulhouse is a first in Europe, giving users in the city access to most public or private transport modes via a single interface. A mobile app and payment card is linked to individual user accounts, letting users pay for their various journeys – by bus, tram, bicycle or car - based on actual consumption, with one invoice billed at the end of the month.

Europe’s MaaS market is expected to reach USD451 billion by 2030

Continuing the journey beyond 2020

As it stands, payment disruption in the mobility space isn’t the most straightforward; changing regulations, legacy infrastructure, and emerging technology form a large part of the equation and will continue to create debate for some time to come.

But if we take the innovation the world has experienced with Industry 4.0 as an indicator of what could result in the mobility sector with MaaS, then it is only a matter of time before the journeys we’re imagining for tomorrow become a reality.

Mobility payments will undoubtedly accelerate along with improvements in transport service quality, spelling huge opportunities for transport authorities and providers to band together and create greener, more efficient and more innovative travel experiences.

Payvision profile

A passion for making payments simple. That’s what Payvision is all about. Our mobility solutions successfully connect and enhance all the elements of transport and open loop ticketing to deliver seamless and secure payment journeys, along with operational efficiencies and valuable insights to help your transport network thrive.

Our proven experience in the mass transit sector has seen our customizable payment solutions go live in a growing number of European cities, helping to revolutionize commutes, generate higher industry revenues and enhance the traveler experience on the whole.

We’ll work closely with you to take care of the complexities, and deliver a full-service payment solution that fits into your ecosystem.

Ready to go from closed to open loop payments?

Payvision can transform your mass transit system, delivering custom and scalable payment solutions, built for innovation. Download our mass transit product sheet to find out more.

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