MasterCard is partnering with mobile ticketing and “intelligent travel solutions” provider Cubic Transportation Systems to stitch payments and retail offers into Cubic’s public transit ticketing and trip-planning app, the companies announced at Mobile World Congress.
The deal, which builds on work MasterCard and Cubic are already doing with the Chicago and London transit systems, is intended to carve away at the $200 billion in city transit fares that are paid in cash. It’s also designed to simplify transit use for riders, who will be able to use the same app in multiple cities around the world, the companies said.
Once MasterCard’s MasterPass digital payment service is fully integrated with Cubic’s NextWave trip-planning app, the combination will make it possible for individual passengers to get real-time directions on their mobile devices on the smartest way to travel, including fare incentives if the transit system is congested or overcrowded. Passengers will also be able to receive personalized offers and deals from retailers in or near transportation hubs as travelers are passing through, so they can take advantage of them immediately.
“As an example, a daily commuter could be offered a loyalty reward for purchasing their newspaper in a specific location each day, or offered a discounted coffee or meal in a nearby restaurant if they choose to take a later train to aid with overcrowding during peak services, while a long-distance traveler could be offered a discount at a restaurant or bar in or around a major transportation hub in the hours leading up to their journey departure,” Will Judge, the head of Urban Mobility, MasterCard Enterprise Partnerships, told Mobile Commerce Daily.
Transit operators will get real-time data on passenger volume, and they’ll be able to offer flexible pricing based on system demand. They’ll also gain a more basic advantage of mobile payments: cutting out the cost of handling that $200 billion in cash every year, as well as reducing the need to sell tickets manually or through vending machines.
MasterCard and Cubic didn’t identify any other cities they expect to expand to under the new agreement. But their basic pitch to reduce ticketing costs looks like it has a solid track record: In London, only four months after contactless payments were launched, more than half a million journeys a day on buses and Underground trains are paid for with a mobile device or contactless bank card — and that’s growing 10 percent each week, the companies said.
MasterCard isn’t the only payments company working on transit ticketing. Last fall, Apple was reportedly talking with Cubic and HID Global, which also specialize in making transit fare systems, about using Apple Pay to replace public transit tickets.