Mobile Payments for Boston Commuters

by Raymond Pucci 0

Charlie rode Boston’s old MTA subway and was the man who never returned, according to the old Kingston Trio ditty. If only Charlie knew that a smartphone app could enable him to get off the train and go home, despite not having that extra nickel in his pocket. Now, Boston’s transit agency has teamed up with London-based tech company Masabi to launch an Apple and Android based smartphone app as the following article describes.

Commuter rail and ferry passengers will be able to pay for tickets with Apple Pay beginning this fall, as part of an expanded mobile ticketing partnership between the Massachusetts Bay Transportation Authority and London-based transportation technology firm Masabi.

The expanded ticketing platform for Android and iOS users is part of theMBTA’s modernization goals.

The app, which can be found by searching for “MBTA” on the Apple App Store, initially launched in 2012 as part of a pilot program. It has since helped generate $103 million in revenue for MBTA, according to an MBTA report, with more than one-third of commuter rail and ferry passengers buying their tickets through the mobile app.

The MBTA has now announced a formal, multiyear contract with the app’s maker, Masabi, to rollout an expanded version beginning in September, where users can pay for their tickets using Apple Pay and MasterPass, a digital wallet launched by MasterCard (NYSE: MA).

“It’s very innovative in terms of user experience,” said Masabi CEO Brian Zanghi in an interview. “The alternative would be people standing in lines, buying tickets using cash. This puts the ticket machine in their pocket, and it’s a huge convenience.”

Public transit agencies in major global cities have been early adopters in the mobile pay and contactless payment methods. No doubt this sector’s leading role will continue, as these payment systems thrive on volume and high frequency customer usage. Additionally, the transit agencies benefit through major cost savings gained by eliminating legacy payment systems. And let’s not forget poor Subway Charlie riding around under the streets of Boston.

Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group

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