Paper-based Contactless Cards?

By Al Vrancart, ICMA Co-Founder and Industry Advisor

Recently we’ve seen the transit market continue to move away from paper and towards plastic cards. The early adopters used traditional mag stripe cards which are rechargeable, e.g., Boston’s Charlie Card, NYC’s MetroCard and London’s Oyster Card. Transit represents an ideal market for contactless payments since few sectors place a higher priority on speed and convenience.

Contactless technology has proven an easier and faster way to move commuters and appears to be an ideal solution until you factor in cost. Issuers who are already issuing plastic cards, have seen the potential and have invested in this market by incorporating contactless technology in subway and train stations. Just recently MasterCard concluded a trial with Citibank for PayPass card holders to use their contactless cards at turnstiles in most New York City subways.

So while the trend was moving from paper to plastic, the push to keep costs down have made a new breed of competition, paper-based contactless cards. This new entry to the market appears to meet the convenience and cost objective for the transit market. Just recently, MasterCard announced that they had signed a development agreement with ASK to create paper-based contactless payment solutions for use in transit and other payment environments.

“MasterCard PayPass is intended for environments where speed is at a premium. Transit is a perfect example.” said Kathleen Reilly, vice president and senior business leader, Advanced Payments, MasterCard Worldwide. “In a subway environment, limited-use, paper-based contactless fare tickets could replace standard mag-stripe fare cards for riders who don’t have a PayPass-enabled payment card. This solution would enable all riders to tap their way through the turnstile.”
According to Thierry Burgess the ASK US General Manager, “More than 50 million ASK contactless paper cards have already been widely distributed worldwide in mass transit Automatic Fare Collection systems.”

It seems like the question of paper or plastic continues to plague us but I imagine that their will be room for both options with plastic being favored for “higher value” transit cards. Higher value cards include the rechargeable card and reusable transit cards that have a high monetary value. The rechargeable versions, favored by those living and working in major cities such as New York, Tokyo or London, are currently plastic and I do not foresee a reason for change. Cards with a high monetary value are ideal candidates for plastic. An example of a transit card with a high monetary value is the Paris Visite Pass which can cost as a much as 50 euros for an unlimited week transit pass. Currently, these high value transit tickets are flimsy paper with a mag stripe, which can easily be lost or misplaced due to the small size and delicate material. So it seems plastic will continue to have a strong foothold in this ever transitioning transit market which is only in its infancy considering it was not long ago that paper money was the preferred payment.

Albert Vrancart is a co-founder of ICMA and is an advisor to the association. He has over 30 years of global marketing experience, previously serving as president / CEO of NBS and Qualteq, a manufacturer of secure plastic transaction, identification and promotional cards.