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Will Transport for London phase out the Oyster card?

Sade Laja Published 26 January 2012

Will Transport for London phase out the Oyster card?

TfL's head of business development for fares and ticketing details problems with the Oyster system and its plans to accept contactless bank card payments. Sade Laja reports

Transport for London (TfL) has made no secret of its eagerness to move to the next stage of accepting contactless payments by allowing passengers to pay for travel by swiping a bank card over a reader. What is less clear however is what such a move means for the Oyster card.

According to Matthew Hudson, head of business development for fares and ticketing at TfL, while the Oyster card has been good at eradicating problems such as people selling on used paper travel cards to fellow passengers at the end of the day, and has sped up certain processes, there remain significant issues with the system.

"It's expensive. Yes, it had a business case, but it's still an expensive system to run, and the customer experience is far from perfect," he told recent Transport Ticketing 2012 event in London.

TfL's ultimate aim is to move away from a scheme where all of a customer's travel information is stored solely on the Oyster card to one where data held on the cards would be minimal, Hudson said - a change that would save travellers time at the ticket barriers and boost efficiency.

Another issue TfL has faced with the current Oyster system is the problematic nature of sending new fare data to the 22,000 card readers in the capital.

"You can imagine how our office is when we say, 'Did that work?' Everyone holds their breath, because if it doesn't, there's a big problem. What we've done is sent a huge amount of data to update 22,000 readers. That's a tricky process and a risk I'm looking forward to getting rid of when all I have is a simple deny list," said Hudson.

The 'deny list' - a list of bank cards that can't be used to pay for travel - will form part of the new model that TfL plans to implement this year .

Under the new model, Hudson told the audience, a person's bank card could be put on the deny list if they don't have sufficient funds in their account. This would be picked up by travel card readers straight away, he said, as the information would be automatically transferred from the bank to the readers. TfL hopes that the new system will also help to speed up the amount of time people spend going through ticket barriers.

The system will work by having:

€Â¢ A "front office", which will be the card reader. Once a customer has tapped their bank card onto the reader, the system will ask two questions: whether the contactless bank card is valid and if the card is on the deny list and therefore can not be used.

€Â¢ If all the information is accepted and the card is not on the deny list, the data taken from the person tapping on the reader will be transferred to a user's bank - the "middle office" - which will then decide whether the card is recognised on its system.

€Â¢ And once this process is successfully completed, the information will be passed onto the back office, and a customer will be allowed to make their journey.

Despite TfL's backing for the new contactless bank card payments system, the London assembly's transport committee expressed concern at the authority's business case for the new system in November , labelling it "unconvincing".

The committee also pointed out that any decision to adopt technology that enables payments to be made by contactless bank card should not disadvantage those who choose to stick to Oyster cards, and said TfL needed to be certain there was an appetite for contactless payment to ensure an adequate return on investment.

When asked what percentage of people said they would take up the ability to pay with a contactless bank card, Hudson said around 30% of people surveyed in TfL research said they would use it, while around the same amount said they would not. The remainder said they were unsure about the plans and would wait and see how they developed before making a decision. Despite this, Hudson said that he believed the findings to be positive.

"We were like, 'Well that's pretty good for a new product.' We were thoroughly pleased with that."

TfL analysis found the cost of taking pay-as-you-go payments was 14p out of every £1 spent on PAYG. The authority is aiming to get this down to 10p a year with the new contactless product, adding: "This is about £400m a year we're trying to save and that's a big old figure we want to hit".

TfL will not be abandoning those who don't want to use contactless bank cards to pay for their travel, however. "For those people who don't have a contactless bank card or don't wish to use one, we're a public body, we must satisfy our customers. We will still make a card available, but it will work on the same model [as the new contactless system]," Hudson said.

"I will probably say there is a £5 charge for the card and you must have a minimum balance of £3. I don't know what the exact levels are yet, we're still going through the policy at the moment.

"What happens is the same model works... But instead of asking the banks a question, I'll go look at where Matthew's account is and say, 'He's got £25 on it, he's fine, carry on,' or I'll say, 'He's just got below the limit, best send him a message.' So the same model also works on the replacement cards."

Will the Oyster be scrapped? Hudson says not.

"The London assembly transport committee has been telling us off for getting rid of Oyster. We're not getting rid of Oyster, we're adding to Oyster," he said.

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