Key Points
- How people pay for public transit shapes how they move, and fare systems can either reduce or reproduce the barriers that unbanked and underbanked riders face in conventional banking.
- Transit payment systems have changed quickly over the past five years, following wider shifts toward digital and contactless payments accelerated by the COVID-19 pandemic.
- The paper compares fare systems in New York, Hong Kong, Mexico City, Jakarta and Nairobi to identify where digital payments have supported interoperability and where gaps remain.
Paying for public transportation is an action that is thoroughly embedded into the routines of city-dwellers worldwide, and one that carries exceptional social and economic weight. The tools that technologists create to enable fare transactions and the decisions that transit providers make in integrating them amount to choices that can guide, challenge, and further embed the financial norms of their locales long term.The situation carries particularly high stakes for riders who are unbanked and underbanked, who face the risk of seeing the barriers to entry that exclude them from conventional banking structures replicated in transportation infrastructure that they rely on. Decisions about how people pay to move determines how they move, and this is a pivotal element in shaping both the culture and economy of a city.
Over the last decade, the spread of digital technology has fostered dramatic changes in the way that users relate to banking – in some cases affirming prevalent attachments to traditional financial institutions and in others boldly fostering new avenues through which people can interact with their money. What it means to earn, save, and send money has evolved, and these changes have been accelerated yet further by the COVID-19 pandemic and subsequent embrace of contactless payment tools. The past five years have been a period of particularly rapid change for routine transaction habits and this change has extended into the domain of mass transit. Public transit systems around the world have recently shifted their digital and physical payment infrastructure in order to mirror and mold the habits of their riders. These decisions have been happening at a rapid pace – understandably mirroring the rapid shifts in payment technology and consumer habits. They have been realized to varying effects, and in ways that have been deeply shaped by the needs and norms of the contexts in which they exist.
My paper, How Money Could Move Us: Digital Payments and Interoperability Among Global Mass Transit Systems (opens in a new tab), explores these decisions through comparative case studies that highlight the transit payment systems in five major metropolitan hubs. These areas include New York, Hong Kong, Mexico City, Jakarta, and Nairobi. Each of these cities are international hubs with highly active public transportation networks, and each are geographically and historically distinct from their counterparts – with some modifying infrastructure that has existed for centuries and others with the opportunity to build interoperable digital fare systems from the start. Comparing these cities provides insight into where the embrace of digital payment tools has promoted and struggled to promote interoperability, and how the varied economic structures, ridership habits, and vehicle modes of these systems are shaping those outcomes.
This paper exists to provide an overview of how interoperability manifests itself across varied transit networks, and to showcase the gaps and success-cases within these individual systems while broadening the scope to unpack how these cases reflect the impacts of a worldwide shift. While the fare methods of each system and each city are specifically sculpted by the habits and structures of that individual city, the shift towards digital fare payment has been a global one and this paper reveals a foundation for looking at the patterns and themes that are showing themselves as we head in this direction.