Visa looks at changing landscape for public transport in coming decades

Visa recently completed one of its largest global studies to date, looking at consumer sentiment towards private and public transport, and the role that digital commerce will play in driving its growth.

The study was conducted in conjunction with Stanford University, with 19 384 consumers participating from 19 countries across the globe. It also focused on the two largest cities in each country, and in the case of South Africa, that meant Johannesburg and Cape Town.

With it estimated that 68 percent of the world’s population will live in urban centres by 2050, a lot of strain will be placed on the megacities that rise up in the coming decades.

The same rings true for SA, and therefore the types of public transport solutions in place will prove vitally important, especially as 2018 saw over 54 million taxi / minibus trips taken per month.

Sticking with the local perspective, payment options remain a real stumbling block for many South Africans. This is becoming an increasingly frustrating factor as Malijeng Ngqaleni, deputy director-general of the South African Inter-governmental Relations, notes that 60 percent of local households spend 20 percent of their monthly income on transport. In rural areas this percentage rises to 31 percent.

To quantify the frustration over cash-only payments, Visa’s study found that 38 percent of Johannesburg and 37 percent of Cape Town commuters aren’t satisfied by this method. Added to this is frustration are the long queues created by cash-only payments, with 67 percent of those in Joburg and 64 percent of those in Cape Town noting it.

These issues could be alleviated by app-based solutions finds Visa, with more than two-thirds of Johannesburg and Cape Town commuters, 77 percent and 76 percent respectively, willing to try a consolidated app for public transport payments.

“When looking across the technology landscape, there already exist many products that could easily address people’s daily frustrations with travel.  However, none of these solutions should be developed in isolation,” says Herman Donner, PhD and postdoctoral researcher at Stanford University.

“A major challenge therefore lies in first identifying relevant technologies that provide suitable products for the market then managing implementation in conjunction with  a broad set of stakeholder including mobility providers, technology companies, infrastructure owners and public transport agencies. From our research, we think that many of these small, incremental changes have the potential to make a significant difference in people’s daily travel,  whether it’s to help find parking, get the best price to refuel their car or plan their journey on public transportation,” he adds.

As for Visa’s recommendations in terms of preparing for the transportation requirements and challenges of the coming decades, the firm highlights five specific areas.

Invest  in connectivity: City governments needs to invest in an always-on data infrastructure, which is fundamental to the technology solutions that consumers demand.

Create a seamless payment experience: As a single journey will increasingly involve more than one mode transport it becomes imperative to create a simple, streamlined payment experience for the commuter.

Integrate personal authentication: As companies and municipalities increasingly incorporate digital payments, they also need to integrate instant authentication.

Design commerce systems with all members of society in mind: When designing the commerce ecosystem, all members of the transportation ecosystem need to challenge their thinking to include seniors and the un-or underbanked.

Develop strategic partnerships: Cities should partner with corporations that can broaden insight and aid in planning. AI and Big Data can be used to analyse information about consumption, movement and changing trends to anticipate needs in real-time.

“The future success of our cities is intertwined with – and reliant on – the future of transportation and mobility,” adds Mike Lemberger, SVP for European product solutions at Visa.

[Image – CC 0 Pixabay]


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