Dutch Public transport starts its mobile journey

Monday 29 May 2017 | 14:38 CET | Background
The Dutch public transport payment system is now available as a mobile wallet. KPN and Vodafone Netherlands are launching support for public transport payments with NFC Android smartphones. The operators have been testing the service since 2015 and it's now available commercially. This commercial phase still has a number of limitations. Customers need to have a personal public transport pass (OV card) to use their smartphone to check in and out on the bus, tram and train. Other mobile operators do not support this technology and may not develop it at all. 

The service, which makes use of the Secure Element on the Sim card, will be rolled out gradually this year. Customers need to have their OV card linked to a back account for automatic top-up and can only travel at full price, as subscriptions and discount cards cannot yet be added to the mobile platform. 

In the initial phase, the number of users is limited to 10,000. One week after the launch, this number was not reached, a spokeswomen says. Developing this service to its present commercial state turned out to be a challenging journey, with lots of testing between KPN, Vodafone and OV Chipkaart supplier TLS. 

The registration process requires around 15 minutes, according to OV Chip Mobiel. The registration process can only be done through the website, not through the app. It involves configuring several apps and making a EUR 0.01 payment to set up automatic payment. In the trial phase, the service is free. In the future, a service fee will be charged. 

According to the FAQ section on the website, the mobile wallet may also suffer from card clash, just like physical wallets. All Dutch debit cards, the driver’s license card, the OV Chipkaart and various membership cards are NFC-enabled. In practice this makes it impossible to offer the whole wallet to be scanned. The NFC reader will pick up multiple cards at once and report an error. The user must remove one card at the time. In the smartphone wallet, the right card must be selected or deselected if more than one card is loaded. 

Aside from a somewhat bumpy on boarding process, the service is essentially limited by its reach. The card is supported by KPN and its other retail brands Telfort, Simyo and Yes. Vodafone also supports it, though not for its secondary brand HollandsNieuwe. T-Mobile, Tele2 and all other MVNO’s do not support this solution, which relies on a special SIM card. 

The OV chipkaart is a smart card; the actual transactions are calculated on the card itself. For it to work on a mobile phone, requires a Secure Element to run the application. Although Deutsche Telekom has developed SIM card based wallets in a number of markets, including Germany, T-Mobile Netherlands has not followed in this. 

In addition to that, the service will only work on recent Android smartphones. Older models are not supported, nor are other operating systems. It can’t be made to work on iPhone. Overcoming these limitations will take time. A spokeswoman compares developing OV Chip Mobiel to opening a bakery. The oven has been installed and the bakery has opened its doors. However, there is just one product on sale. Other recipes must be tried first. In real terms, adding support for subscriptions is highest on the list of priorities. 

Developing the OV Chip Mobiel product may yet take several years, with no guaranties. In parallel, the public transport companies have started testing with payment directly from a banking account. This is even more challenging than mobile payment, due to the complexities of banking and payment in general, and the larger number of stakeholders involved. The financial services sector meanwhile is more concerned with the incoming PSD2 directive.

The OV-chipkaart will stay, however. Historically, the NFC-only card readers are not connected to the internet-of-things. They will gradually replaced by connected readers that can also scan barcodes and QR-codes. Replacement is often timed when ten-year line concessions are up for renewal. This process will also take time, but will broaden the options and ready the payment infrastructure for the 21st century.

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