Software developed in house by Transport for London is set to power the contactless fares systems of other global cities after the agency struck a £15m licensing deal with Cubic Transportation Systems (CTS).
First introduced on buses in 2012 and extended to Tube, tram, DLR, London Overground, and most National Rail services in London in September 2014, contactless allows people to pay for their journey by debit and credit card, so avoiding the need to manage a separate Oyster card.
The system has since been enhanced to work with mobile and non-card based payment methods, including Apple Pay and Android Pay.
TfL’s adoption of the technology has been credited with driving its take-up in London and the transport authority is now one of Europe’s biggest contactless retailers.
Currently more than £18m of fares are paid each week using the technology and TfL says it sees continued signs of customers moving away from Oyster to contactless.
Under the deal announced today, CTS will be able to include TfL’s code into the ticketing systems it sells to transport operators and city authorities around the world.
The money raised from the deal will be reinvested in the capital’s transport network.
Although City Hall has attempted to portray the deal as delivering on Mayor Sadiq Khan’s manifesto pledge to commercialise TfL’s expertise, the agency always intended to sell the code to other cities and commercial partners.
TfL has previously estimated it cost around £11m to develop the system in-house, a significant saving on the £35m-£60m wanted by external developers.
In 2014 TfL Chief Technology Officer and Director of Customer Experience Shashi Verma told this site that the low costs of TfL’s solution meant the agency was ideally placed to sell its software to other cities.
The value of today’s deal means the entire initial development costs have been recouped and the non-exclusive nature of the tie-up with CTS means London taxpayers could benefit from further deals in the coming months and years.
Today Mr Verma said: “We’re delighted to have agreed this licensing deal with Cubic Transportation Systems to introduce our contactless payment system to other world cities.
“Contactless payments have completely transformed the way people pay for travel in London and this deal will allow other world cities to benefit from the hard work we put into making the system work for our customers.”
Matthew Cole, president of Cubic Transportation Systems, added: “The challenges of mobility in 21st century cities – including access for all, inclusion, environmental concerns and the pressure of ever-growing populations – can only be met through cooperation and partnership.
”No single entity has all the answers and this agreement between Cubic and TfL sets a new standard in public/private partnerships for addressing these issues, and acknowledges the success of account-based payment for transit for which there is clear interest from many cities across the world.”