Dallas Area Rapid Transit on How Contactless Payments Can Increase Ridership Following the Pandemic

Before the pandemic’s onset, contactless payments technology was an add-on feature that some businesses offered their customers. Social distancing and safety precautions accelerated its adoption, and now consumers have come to expect the option every time they make a purchase. Nicole Fontayne-Bardowell, interim chief financial officer at Dallas Area Rapid Transit (DART), told PYMNTS in a recent interview that the public transportation sector has had to innovate particularly heavily to meet this demand. DART, for example, has expanded a microtransit service powered solely through contactless payments in response to the pandemic. Public transit, however, has a mass impact of its own in driving technology forward.

“I think as people are starting to see [the benefits of mobile payments] as we’re offering new services, riders are more apt to adopt contactless payments,” she said.

Dallas is the latest of five U.S. cities to accept open-loop fare payments, joining the ranks of transportation heavy hitters such as New York’s MTA and San Francisco’s Metropolitan Transportation Commission (MTC). With nearly 90% of riders now expecting contactless fare options for their travels, adoption of such technology in public transit likely will increase around the U.S.

Commuters Concerned With Digital Safety

Open-loop contactless payments allow riders to use their everyday contactless cards without having to reach for cash, tickets, tokens or closed-loop payment cards. When a new digital tool is introduced, however, consumers often are wary of its ability to protect their personal information. This is especially true among older generations, as less than half of all baby boomers surveyed have used contactless payments technology. Fontayne-Bardowell believes security is one of the most important features when introducing new transit technology and pushing for its adoption by commuters.

“Working very closely with our IT department to explain the benefits of [using] contactless and credit card payments safely [has been crucial to their adoption],” she said. “I think it was actually a driving force [because] people were concerned that they didn’t have that safety net [of using cash]. I don’t think [contactless payments] would have had the impact it did [otherwise].”

Contactless is one of the most secure forms of payment available on the market. Recent research has shown that digital payments and ticketing can reduce fraud and secondary sales by heightening customer payment card data protection and dispensing with pre-registration processes. The migration to digital ticketing also provides transportation authorities with informative traveler data, which transit professionals can use to boost the customer experience through better route scheduling and capacity planning protocols. Regardless of its many benefits, transportation firms should still stagger the rollout of any new contactless payments technology to ease customers and employees into modified processes.

“As often as agencies talk about pulling cash from transit systems, that can’t be done all at once,” Fontayne-Bardowell explained. “You have to help riders along through the adoption process. And I think that’s where building up slowly — some would say slowly; I think it’s actually very deliberate — riders have really appreciated that.”

Open-Loop Contactless Payment Enable Fare-Capping Technology

Numerous approaches exist for increasing ridership and bringing commuters back to public transportation post-pandemic. One such solution is fare capping, a system that limits rider spending to a specific dollar value to prevent overpaying for commuter services. The maximum cost for DART commuters is $6 per day, or just $96 per month, for example.

“What our customers really appreciate is that fare-capping aspect — they don’t have to worry about it,” Fontayne-Bardowell said. “If they tap every time they get on the ride, the system will automatically know [how often they ride]. The [artificial intelligence] behind it [offers] the ability to know that the system is looking out for them in regard to costs.”

Open-loop contactless payments enable riders to pay as they go by using a physical card or mobile wallet to tap in and tap out. Combining this technology with fare-capping protocols improves customer satisfaction rates and lowers the financial burden placed on low-income commuters. Travelers who cannot afford upfront costs for monthly passes now can benefit from the same discounts for unlimited rides without having to pay in advance.

“We built it incrementally,” Fontayne-Bardowell explained. “We started with the GoPass app. We then introduced the GoPass Tap Card. And then we stepped up to contactless payments. I can’t wait to see what comes next.”