In L.A., Metro Introduces a New Fare Payment System and App

Just in time for the FIFA World Cup games, a key public transit system in Los Angeles is introducing a simple and convenient tap-to-pay fare collection system, and a new mobile app.

The Los Angeles County Metropolitan Transportation Authority (Metro) has introduced new contactless fare payment, enabling riders to simply tap their credit or debit cards, digital wallets or wearables such as an Apple Watch, at fare gates or bus boarding sites. Riders can pay for themselves and up to four other people.

“By introducing credit and debit fare payments and an official mobile app, we’re making transit simpler, shortening lines, improving speed, and making our system easier to use for daily commutes, special events, and visitors from around the world,” Fernando Dutra, Metro Board chair, said in a statement.

Metro, the second largest transit system in the United States, has also released its new unified LA Metro app, which combines trip planning, real-time arrival information and payment tools into one platform. The app also integrates seamlessly with other regional transit providers.

Fare payment systems that allow riders to tap their bank card or digital wallet — both of which are now practically ubiquitous — are quickly becoming the norm among transit providers. The technology is known as “open loop,” a nod to its integration into the larger credit card and fintech financial ecosystem. The end result has been convenient for riders, transit and banking officials have said.

“If we make it difficult for them, where they need to learn 'how do I need to pay transit,' they’re not going to ride,” Andres Polo, core products and urban mobility lead at Visa, said during a panel in April at the CoMotion MIAMI conference. He suggested other innovative considerations like systems that accommodate payments in crypto or other national currencies.

“We need to put the rider first. The rider needs to be in the center, and they’re the ones that should choose how they want to pay,” Polo said.

Open loop fare payment systems have a way of being “accessible to everyone, by just tapping and getting on,” Scott Feldman, client executive for strategic markets, public sector at Elavon, a U.S. Bank subsidiary, said during the panel on fare payment. “So that helps you avoid fare evasion. It helps you increase the ridership.”

Other major transit providers in the United States like the Metropolitan Transportation Authority in New York City, the San Francisco Municipal Transportation Agency, TriMet in Portland, Ore., Sacramento Regional Transit in California and others offer the ability to pay with a bank card as the rider boards.

Open loop systems often mean not only technology changes, but shifts in workflows. Transit agency finance teams need to understand that clearing and settlement of the transactions will happen the next day.

“You’re not sending a transaction every time somebody taps that card,” Polo said.

These systems could also lift a cybersecurity burden from the shoulders of transit agencies, given that large financial institutions are leaders in ensuring the security of their millions of bankers.

“You have partners now that are looking after cybersecurity, and looking at fraud for you,” Polo said.

Metro officials note that credit and debit card payments are now only available for full-fare riders — but will be introduced early next year for reduced-fare riders as well. Cash customers can continue to load money onto their existing TAP cards.

“Metro customers shouldn’t have to navigate multiple apps just to ride transit,” Metro CEO Stephanie Wiggins said in a statement. “This new app, combined with credit and debit payments at the fare gates and on board buses, is about creating a seamless, intuitive experience, whether you’re a daily rider or visiting Los Angeles for the first time.”