Is it realistic and progressive as a transport company to expect passengers to invest several minutes in buying a ticket?
Why exclude potential customers and lose profit by dictating payment methods potential customers don’t have?
Almost everybody is already well accustomed to buying clothes, food or films on the internet with just a few clicks. However, this digitalisation process has only partially arrived in the local public transport sector. Conventional payment methods such as buying a ticket from the bus driver were – or rather still are – mostly not possible due to Covid-19 measures. Since the beginning of the pandemic, more and more people have been very reluctant to buy tickets in cash or by card at the ticket vending machine, aiming to reduce all unnecessary contact in public areas to a greatest minimum possible.
However, there is a clear increase in smartphone use.
Mobile devices already are the central communication tool and also the access point to an increasing number of digital services – seven out of ten (66.9 percent) Austrians for example bought a product online on their mobile phones this year and almost three quarters (74.4 percent) of the 15 -29 year olds. There was also a boost in online banking solutions and other mobile payment options. As a catalyst, the pandemic has significantly accelerated the trend towards mobile payments in all aspects.
What can public transport systems learn from eCommerce?
Many industries – such as eCommerce – reacted quickly, knowing full well that the user experience, the user journey and the payment process can significantly influence and promote sales and business growth, but also prevent them. The public transportation market can learn and indeed profit from this knowledge.
Public transport companies usually offer their passengers several payment options either online or directly at their point of sales. Paying at the driver is uncomplicated for customers, provided they have cash with them, but the process also delays the onward journey and is currently anyhow mostly not possible due to Covid-19 precautionary measurements.
Ticket machines are not a fast or user-friendly payment option, especially for inexperienced occasional passengers, in addition to not being available at every stop and their keypads do not want to be touched by everyone due to hygiene concerns.
Public transport companies are increasingly relying on one or even more individual app solutions and these are well received by local and regular passengers. However, payment options are often offered that represent an insurmountable hurdle, as not all potential passengers have these payment methods.
In Austria for example, the credit card has a relatively low share with a penetration rate of less than 47 percent and alternative payment methods such as PayPal, with currently 1.4 million accounts, have a significantly lower reach. In comparison, the penetration rate of mobile phones is over 120 percent, i.e. almost every person in Austria has at least one mobile phone – so the mobile phone is an ideal means of payment, even for minors and other people who do not have any of the above mentioned payment methods.
A similar picture presents itself in Germany, only 29 million PayPal accounts and 37 million credit cards are currently registered. In comparison, there were over 147 million mobile phone connections registered in Germany in 2020.
Fast payment through Carrier Billing
Carrier Billing enables a ticket to be paid for with just one click – the entire ticket purchase process can be completed in a matter of seconds.
The mobile payment method enables quick and easy payment; the user is automatically checked and authorized in the background. The payment process can be initiated either via a QR code attached to the bus or tram stops, in the station or the machine itself, as well as in a public transport app. Both options link directly to the payment page. The mobile phone number is automatically determined by the mobile phone provider, customers are clearly verified via the mobile phone number and the ticket purchase is confirmed with a simple click.
The ticket is billed directly via the mobile phone bill – no registration or entry of sensitive information such as credit card or account details is necessary. In addition, most of the reasons for cancelling a purchase no longer apply; for example, a complicated purchase process due to redirects of third-party sites from payment providers, input errors, no cash, nor faulty or non-existent machines.
A simple process for a successful purchase!
Payment with just one click – advantages for passengers and public transport providers
The ticket price is billed to the mobile phone bill with just one click.
The ticket purchase is completed in just a few seconds.
The familiar and trustworthy environment of the mobile network operator ensures secure payment as well as a positive and secure purchasing experience for customers – without entering data and without redirecting to third-party payment service providers.
The transport companies benefit from the resulting decreased purchase abort rates and increased sales.
DIMOCO acts as a payment institute and mobile transaction hub, by clicking on the purchase button communication is triggered with the mobile operator of the mobile phone user, who checks the request and then places the amount due on the mobile phone bill. Once the check is successful, DIMOCO passes this on to the public transport company and the ticket can be displayed to the customers directly.
Paying by Carrier Billing is already a very popular alternative to credit cards, PayPal or online transfer when paying for relatively small sums in app stores, for in-app purchases, parking tickets, snacks at vending machines, and for charging electric cars, but also for music downloads, online games or video-on-demand offers.
Studies from Germany show that more than 70 percent of all public transportation tickets sold relate to single tickets, short-haul tickets and day tickets and are therefore bought by occasional passengers. Many German transport companies have been catering to this target group specifically for years, which has a positive effect on the number of passengers and thus on their sales figures.
“Carrier Billing has emerged as the primary means of payment for in-app ticket sales over the past few years and is now the most popular payment option for occasional passengers,” says Anja Wenmakers, Managing Director of SWB Bus und Bahn and SWB Mobil in Bonn.
“The mobile payment method has been in use in Leipzig for years and is an enrichment in the mix of payment methods, as it offers customers an uncomplicated way of making a purchase and also makes those customers available to us who, for example otherwise would not be able to purchase tickets due to a lack of an account. In general, app sales and thus cashless payments are growth drivers with steadily increasing importance,” says Sandy Brachmann, Head of Marketing at Leipziger Verkehrsbetriebe (LVB) GmbH.
Carrier Billing is known as the joint German payment brand “Zahl einfach per Handyrechnung”, a joint initiative of the German mobile network operators Telefónica Germany, Telekom and Vodafone and as “Zahlen per Handyrechnung” in Austria, a joint initiative of the Austrian mobile network operators A1, drei and Magenta.
The risk of infection in public transport is no higher than in private transport
An independent epidemiological study by the renowned research institute of the Berlin Charité organization confirmed in May 2021 that the regular use of public transport is not associated with a higher risk of a SARS-CoV-2 infection compared to private modes of transportation. The results of the study ensure that people can get on buses, trams and trains with a better feeling and on a reliable factual basis. Carrier Billing supports compliance with the hygiene precautionary measurements when buying contactless tickets.
With Carrier Billing not only will your passengers pick up speed again, but also your ticket sales too!
Business Development Manager, Ticketing & Parking
DIMOCO Carrier Billing
Founded in 2000 and headquartered in Vienna, Austria, DIMOCO is a regulated payment institute for Direct Carrier Billing and holds a payment service license from the Austrian Financial Market Authority (FMA), passported to all 27 EU member states.
As a trusted partner of mobile network operators, DIMOCO enables over 1.5 billion people across the globe to purchase goods and services from merchants and aggregators with their mobile devices, charged via the user’s phone bill or credit. All with a single API.
Head of Corporate Communications
DIMOCO Corporate Headquarters
Tel: +43 1 33 66 888-2059