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Thai consumers prefer open-loop system for public transport: study

Aug 21. 2019
Photo by VISA
Photo by VISA
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By The Nation

The majority of Thai consumers agree with the idea of paying directly with debit and credit card for public transport, according to a study conducted by Visa on Consumer Payment Attitudes..

The study tracked payment habits and attitudes as well as exploring emerging topics related to payments among 4,000 consumers across eight Southeast Asian countries, including 500 respondents from Thailand.

Nearly two in three (64 per cent) said they prefer paying directly with their own bank cards, such as debit and credit cards, for public transportation. In addition, sixty-seven per cent prefer to pay using contactless card and mobile payments.

“Visa is engaged with 120 cities around the world to implement open-loop payment solutions for public transportation. We have seen that in major cities such as London, New York, Singapore and Sydney, moving from cash to electronic payments in public transportation enables passengers to move quicker from point A to point B while offering a more consistent experience,” said Suripong Tantiyanon, country manager for Visa Thailand.

“At the same time, public transport operators who adopt open-loop payments can reduce their operating cost, improve passenger experience and boost ridership. According to Visa’s Cashless Cities report, transit operators spend an average of 14.5 US cents of every physical dollar collected, compared to only 4.2 cents for every digital dollar,” he added. 

Open-loop payment in transit refers to the acceptance of payment methods that are not proprietary to the transportation network. In other words, passengers can pay directly with their bank-issued debit and credit cards for public transport, such as subway, trains and buses.

Respondents said their top reasons for adopting open-loop payment in public transport are no need to prepare cash or top up stored-value cards (76 per cent), reduction of cards in wallet (63 per cent) and the ease of tracking travel expenditure (56 per cent).

Top reasons for consumers to move away from the current fare payment system (close-loop) are the inability to pay if there is insufficient balance in stored-value travel cards (53 per cent), the need to top up stored-value cards (43 per cent), stored-value cards are non-refundable once lost (36 per cent) and the need to prepare cash or payment cards to top-up (35 per cent).

When asked about their most preferred payment methods, respondents to the survey indicated debit or credit card via contactless technology as their first choice (45 per cent), followed by mobile contactless payment (22 per cent) and biometric payment (20 per cent).

The study also tracked consumers’ attitudes towards using different payment methods for toll charges. Similar to public transportation, four in five (81 per cent) of respondents would consider using own debit or credit cards with contactless technology to pay. Their top reasons to digitize their transaction include no need to prepare cash and topping up stored-value toll cards (71 per cent), it helps to reduce the number of cards in wallet (58 per cent) and the ease of tracking toll payment expenditure (31 per cent).

“From our experience working with public transport operators and authorities around the world, open-loop payment in mass transportation is one of the most effective avenues to widen adoption of electronic payments. Additionally, this will provide international visitors with greater choice of payment and improve Thailand’s attractiveness as a global tourist destination. We are convinced open-loop payment holds the key to sustainably transforming consumer behavior and we are open to working with all stakeholders to realise the country’s true potential,” Suripong concluded.

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