NFC-enabled handsets proposed for national ticketing system

While doubts remain over the financial viability and consumer acceptance of e-ticketing systems, the UK government has announced plans to roll-out a nationwide ticketing system for public transport that could be based on NFC enabled mobile phones and SIM cards.

Having recognised the success of London's NFC-based Oyster card system, which is used for nearly 80 per cent of bus and metro journeys in the capital, the government now wants to push ahead with a national scheme.

However, the uptake of contactless payment systems remains hamstrung by the initial start-up costs, and preliminary estimates have put the infrastructure costs for UK-wide coverage at over £1 billion, with annual running costs of £260 million. The Transport ministry claims that its analysis suggests that such a system could provide potential benefits of around £2.6 billion per year, accepting that one of the realities of smart ticketing is that it requires the infrastructure to be fully present to function.

The government is looking to introduce integrated ticketing over the next five to 10 years, with NFC-enabled handsets or bank cards being positioned as frontrunners to drive consumer acceptance. However, it has removed itself from providing any financing, and suggests that some of the benefits of smart ticketing are also not always easy to monetise. "This could lead to the suggestion that it is not possible to make a traditional business case for smart ticketing. However, there are benefits to which a value can be attached, such as time savings and fraud reduction."

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