The National Express’ sales director in the West Midlands, Daljit Kalirai, has revealed that after over a year of the company operating a contactless card system, such cards now make up a quarter of its bus service’s entire revenue.
The machines for the system were implemented on all 1,600 of the National Express’ buses as of February 2018, with the three millionth customer to make a contactless payment having boarded the bus in January this year.
Research and Implementation
The knowledge of contactless’ potential is no recent discovery. The first time the National Express brought in contactless options was in 2016 when, with the National Express still operating the Midlands Metro, brought the system into the trams of the area. A month later, it was being used by 7% of the customers, becoming 20% after a year had passed.
When customers were asked about this, 2/3 said that the quicker nature of it is what made it a favoured option. Less time spent buying tickets also seemed to free up some time for the drivers to meet their strict schedules.
The convenience of not needing change was key in making the contactless system so popular. Transport Focus produced research to show that the priority market of young people prefer to use contactless more than other forms of payment on average.
That said, it was predictable that half of the fares on Coventry’s university bus routes are paid through contactless means.
Surprisingly, the National Express West Midlands service is the only bus service outside of London to have brought contactless card payments with daily capping. The difference is that London doesn’t allow cash anymore, whereas the West Midlands do due to it having some of the highest rates of deprivation in the UK- and this has a link with lack of technology, and thus a preference for the older payment methods.
How they did it
In order to get so far, the National Express partnered up with the machine supplier Init to produce their contactless machines. Init’s managing director, Jens Mullak, has expressed many of the plans the company has moving forward. These include creating an account-based ticketing system or tracking customer payments through a web portal designed for the system.
Explaining how their system works, Mullak said: “The taps are gathered on the bus by our passenger terminals, PROXmobil. Passengers present their card and get a green light at the terminal. That confirms card tap, which system-wise, stands for the granting of permission to travel. The taps are presented to the payment gateway according to the credit card brand rules. For Visa, this means the first tap of the day generates an account verification message, after which the taps are sent to the account held in the INIT ticketing system. All this is done in a way that minimises the PCI scope to the benefit of National Express.
“The travel permission taps are collected on a daily basis in the core of the system, where all trips tabbed on one account are aggregated, business rules for zonal and time-restricted tickets are applied, and then the actual fare capped. Capping values and periods can be defined as rules in the back office. At the end of the operation day, it settles the aggregated value by completing the payment with the payment gateway of the payment service provider.”
At this point, National Express has fully completed the implementation of their contactless technology and tested data with its highest model. With the higher-level model, the cost per transaction will be lowered, making the journey overall easy for the customer and ensuring any failures of payment transactions will be dealt with effectively.
The Other Digital Options
Other popular digital payment options have recently shown their usage amongst the customers. 12th January 2019 marked the four millionth ticket sold by the company’s West Midlands branch on a mobile. Paying for a ticket on a mobile has become a very popular method for buses and trains, with statistics showing 17% of the company’s revenue now comes from mobile purchases, with a large portion of them being students.
National Express has also recently started working with Masabi to make ordering bus tickets a lot easier for students.
As students are an important part of this model, student discount tickets are popular.
In order to make things even easier, National Express updated their software to easily connect mobile devices to their web portal, allowing students to use a voucher code from their college that takes little time in appearing on their phones and resulting in a quick transaction.
According to one Birmingham college student: “Moving away from the paper tickets onto the card has been a major step forward for us. It has reduced the logistical nightmare of trying to
‘make’ 3,000 bus passes every term. This typically involved at least 10 people over three days, distributing to students throughout seven campuses over a few weeks at the beginning of each term.”
Another said: “Feedback from our learners shows they are more satisfied with our services as they do not have to wait in queues to collect a bus pass/ticket/voucher.”
These changes proved effective. After only two months, National Express’ revenues through external devices such as the app increased by 100%. According to a survey following it, 55% of customers travelled more frequently than before due to the ease of access the app provided.
Masabi’s head of marketing, James Gooch noted that the increase in activity through the simplicity the app provided to customers showed the success of the project. In fact, it was even awarded the Transport Ticketing Global Award in 2018 due to the effect it had in enabling education through the transport’s benefits to students.
Gooch stated: “From the passenger’s point of view, being able to get a ticket on your phone makes it easier to access and ride on transport services. From an operator’s point of view, deploying a SaaS solution helps deliver innovation quickly (National Express went live in just seven weeks). Moving away from legacy infrastructure and having to issue proprietary physical tickets helps to reduce the overall cost of fare collection.”
When taking into account the digital methods, this would mean the percentage of customers making up the digital market would be 42%. Whilst this would still mean the majority are using cash, the digital method has its obvious benefits- even for those paying with cash, who can benefit from the reduced queue sizes when buying tickets.
According to National Express West Midlands’ head of customer experience, Adam Rideout: “With smart ticketing, we can target fares and offers more precisely to encourage people to travel – from a particular area or demographic or at a particular time. We can bring in products quickly and see if they work. If not, we can scrap them – without the huge expense of printing leaflets and timetables. We could even end up offering discounts based on the weather. Supermarkets do this – why couldn’t transport operators? Just because we’ve always changed our fares once a year doesn’t mean we always have to.”
It’s now clear that the contactless system has found another system to simplify, and it’s working wonders.
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