An Oyster that’s a Diamond, London’s Contactless System

Intriguing discussions today about the Oyster Card
in London. This is the contactless card operated by Transport for
London (TfL) to allow everyone to travel across the London public
transport system without using cash. It’s basically a prepaid
contactless card, like the Octopus Card in Hong Kong or the New York
Subway Card.

Oyster was launched in 2003, and I love stats so here’s a few from Transport for London (TfL):

• 70% of all rail journeys in the UK start or finish in
  London, and TfL operates 8,000 buses and 278 bus and rail stations,
  rising to 500 stations by 2010;
• these stations and services are used by 6 million bus passengers and 3.4 million on the trains and underground every day;
• 80% of these customers use an Oystercard for these journeys, and there are over 18 million Oystercards issued;
• Oystercard
  is accepted by 4,000 retail outlets, mainly newsagents, with 20,000
  Oystercard readers deployed across the network; and
• the readers read and write over 10 million contactless taps per day.

This makes Oystercard the largest contactless card programme in Europe and, possibly, the world*. 

All 20,000 readers will be upgraded by 2010 to accept NFC MIFARE
chip-based Oyster Cards, EMV and EMV-variant cards, and ITSO cards
(Integrated Transport Smartcard Organisation).

The benefits of the programme are multiple in terms of streamlining
travel, reducing queues, minimising cash handling, reducing the
possibility of fraud by customers and cash theft by staff, and
generally improving the customer experience. Having said that, the
biggest benefit is the £60 million reduction in annual operating costs
for TfL of the ticketing system since implementing the Oystercard. This
includes the interest earned on prepaid monies sitting on the float.

Therefore, there is a critical strategy to increase the card usage
by the extensions of working with Visa PayWave and MasterCard PayPass,
the NFC standards committees, and by collaborating with organisations
such as Barclaycard, O2 (the mobile carrier) and other partners.

The challenge the Oyster spokesperson left us with at the end, is
that they are upgrading the readers to read and write EMV for payments
cards and NFC for mobile services for the unbanked. What Oyster would
like to see is that EMV incorporate NFC standards or vice versa to make
this easier.

Now there’s a thought.

* The Octopus system in Hong Kong is the most mature of these subway
systems with twice as many people using the card as live in Hong Kong,
generating over US$12 million per day in transactions.