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How can The Open-Loop Payment System Contribute to Smart Public Transport?

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The transport sector keeps on evolving due to technological trends and consumer demands. The latest development is the use of open-loop payment systems in transport. It’s a payment system allowing travellers to use their contactless cards or smartphone wallets during travel. What’s more? The open-loop system contributes to smart transport in numerous ways.

What’s an open-loop payment? 

This is the use of a general-purpose card in places where the brand of the card is acceptable. It’s mostly used to pay for transport services and many other essential services. The open-loop payment method allows clients to pay at different locations but from a centralized digital wallet.

Examples of open-loop cards are credit cards, debit cards, gift cards, and pre-paid cards. The use of this mode of payment comes with numerous gains and eases payment in public transport. It benefits both users and companies alike and is the reason why most corporations have implemented them.

How does the open-loop payment system contribute to smart public transport?

  1. Ease of payment

Open loop-payment systems use credit or debit cards making it easier for travellers to pay for fare tickets. This limits the need to queue for long to get a ticket, which means more convenience and comfort for all travellers. It’s also easier to pay for public transport services using contactless payment, just as with smart public transport.

  1. Account-based ticketing

With the open-loop payment system, ticketing is account-based, either anonymous or personalized. This increases the chances of customer engagement and experience. Moreover, the public transport provider gathers better trip data to adapt and also provide services more efficiently.

  1. Use of contactless payments

Open-loop payment systems involve the use of contactless payment modes. You can use a debit or credit card to transact via MasterCard or UnionPay card schemes. There are also many other modes of payment like mobile wallets and wearables like smartwatches and wrist bands. These have since minimized the need to queue to get transport tickets.

  1. Enhanced safety

The use of open-loop payment systems doesn’t require cash ticket payments. This limits the need for travellers to move with vast sums of cash to pay for transport services. Also, queuing at busy terminals to load pre-paid fares can expose passengers to safety risks.

But this is eliminated by the use of contactless payments. With an open-loop payment system, there’s no need for vending machines. And this further saves transport agencies on maintenance costs.

  1. Improved efficiency

Open-loop payment systems function like credit and debit cards and offer similar fraud and loss protection. You can use this type of payment in different parts of the world and enjoy high-efficiency levels. Unlike manual payment, open-loop payment systems are very efficient. They save a lot of time, allowing users to enjoy more improved services and enhanced customer experience.


An open-loop payment system contributes to smart public transport in various ways. It allows for quicker transactions and is more convenient than conventional modes of payment. It also saves a lot of time and enhances efficiency and customer satisfaction. Open-loop payment systems eliminate the hassle associated with transport tickets making the process more comfortable.

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