Future contactless payment options for transport for London : demand, cost, equity, and fair policy implications

This thesis assesses fare payment technologies for Transport for London in 2015. Based on a survey of technical literature, feasible payments technologies in 2015 include current smartcard technology, contactless bankcards and near-field communication (NFC) mobile phones. Five fare payment options based on these three technologies are proposed. Options 1-3 use contactless bankcards and NFC phones as the fare medium. Option 1 requires tap-in only and uses flat fares; it is a standard retail transaction. Option 2 is like Option 1 but adds a rebate program to approximate the effects of passes and transfer discounts. Option 3 requires users to tap-in and tap-out, and supports traditional transit fares. Option 4 continues the current use of a proprietary smartcard to implement traditional transit fare structures. Option 5 uses a vehicle-based smartcard reader that does not require barriers or fareboxes; it supports traditional transit fare structures and path- and service-based pricing. The five options are evaluated on four dimensions: cost, demand, equity, and fare policy. Options 1-3 have significantly lower costs due to the use of commercial payment media. Option 4's costs are similar to current costs.