Visa is joining MasterCard in testing proximity payments systems on the New York City Subway, providing pay-at-turnstile functionality, rather than the stored-credit kind used elsewhere.
Reuters tells us that Visa will be joining the trial, which already enables New Yorkers to buy some subway tickets with PayPass cards (from MasterCard) waved near the turnstile reader. That means payWave users will be able to buy tickets on their credit cards without having to so much as press a button.
The trial, which was launched by MasterCard in July, is more complex than on most mass-transit systems as it involves buying a ticket (for $2 a pop) at the turnstile, rather than loading credit onto a separate application (or physical card) which is deducted when used. Adding Visa's payWave is a significant step as it increases the complexity of the back end, while simplifying the users' experience.
Passengers also have the option to load up with pre-paid tickets online, for which they get a 20 per cent discount, but the important thing is that the entire process is managed by the credit card company rather than any aquatically-branded third party, whose role has been effectively disintermediated.
Quite why all mass-transit ticketing systems are named after sea life is a mystery, but they are increasing in popularity around the world. Removing the third party makes complete sense for the credit card companies, who will now know how you got to the shops as well as what you bought there, even if it will be much harder to implement on a variable costs system such as London's Oyster.
New York, in common with most of the world's metro systems, charges a flat rate for journeys - so a ticket can be bought at the point of departure without the system having to know the eventual destination. London's Oyster system records the point of departure, then collects the fare when the card is read again at the destination* - a process which would be much harder for the credit card companies to replicate.
One way is to simply embed an Oyster Card into a credit card, as Barclays has done. That works, but it's a bodge job that leaves the power in the hands of Oyster and customers easily confused.
So having seen the pre-payment systems inch towards becoming credit cards - such as extending into confectionery and newspapers in Hong Kong - the credit card companies are beginning to turn their cards into tickets, which should at least put an end to cards named after undersea creatures. ®
* Fail to record your destination and you get docked a fiver, so "mind the gap" is joined by "Oyster users are reminded to always touch in and touch out".