The benefits of open loop payments on public transit

By Andres Polo, Head of Urban Mobility, Visa Latin America, and the Caribbean

In the digital era, the world is rapidly moving towards cashless transactions. One significant development in this regard is the advent of open loop payments in public transit systems. As a global leader in digital payments, Visa is at the forefront of this transformation, providing seamless, secure, and efficient payment solutions. This blog will explore the benefits of open loop payments on public transit from a Visa perspective.

1. Convenience
Open loop payments allow commuters to use their existing Visa cards or mobile payment apps to pay for their transit fares. There's no need to queue up for a ticket or top-up a transit-specific card. Just tap your Visa card or mobile device on the reader and go.

2. Efficiency
Open loop systems increase operational efficiency. Transit operators don’t need to manage the complexities of a closed payment system, such as card issuance and top-ups. This allows them to focus on their primary responsibility - providing reliable and punctual transit services.

3. Cost Savings
By adopting  open loop payment systems, transit authorities can reduce the costs associated with cash handling and ticketing infrastructure. This can result in significant savings, which can be redirected to improve services and infrastructure.

4. Security
Open loop payment systems come with the same security features as any other Visa transaction. This includes encryption, tokenization, and fraud detection, ensuring that commuters' financial information is always protected.

5. Inclusivity
Open loop payments allow for financial inclusivity. Anyone with a Visa card or a mobile device with a digital wallet can access the transit system. This is particularly beneficial in areas where people may not have easy access to transit-specific cards.

6. Data Insights
Transit operators can gain valuable insights from the data generated by open loop payments. This data can help in improving services, planning routes, and managing capacity.

7. Pay in Advance with Prepaid Visa Cards
Open loop payments offer the flexibility to pay in advance for transit services using Prepaid Visa Cards. This unique feature provides several key advantages:

Predictability and Ease of Budgeting: 
With Prepaid Visa Cards, commuters can manage their travel expenses better by preloading a set amount on the card. This allows for more effective budgeting as the cost is known upfront and loaded onto the card.

Discounts and Savings: Transit operators often provide incentives to riders who pay in advance, such as discounts or bonus travel credits. By using a Prepaid Visa Card, commuters can take advantage of these savings.

Reduced Transaction Time and Less Stress: Prepaid fares on a Visa Card streamline the transaction process. Commuters can simply tap their card and proceed, making the entire process faster and more efficient. Plus, there's no need to worry about having exact change or reloading transit cards, making the commute less stressful.

In conclusion, the adoption of open loop payments in public transit represents a win-win situation for both commuters and transit operators. With Visa's secure, efficient, and inclusive payment solutions, the future of public transit looks promising. As cities continue to grow and evolve, Visa is committed to driving the transition towards a cashless, seamless, and efficient public transit system.

If you want to learn more about the Urban Mobility Trends for Latin America and the Caribbean, download our full research paper here.