CIE looks to change our Visas with eye on Apple Pay
Bus and rail travellers might soon be able to pay for their fares by swiping their smartwatch or mobile phone, according to plans published by CIE.
The semi-state transport company is to upgrade its IT systems with a view to accepting new forms of payments, including Apple Pay, Samsung Pay and Stripe. Apple Pay and Samsung Pay are used by swiping Apple and Samsung smartwatches and phones.
While neither digital payment system is yet available in the Irish market, CIE wants to make its new systems compatible with the payment methods.
It is also eyeing alternative payment systems such as Android Pay, Masterpass and Visa Checkout but has not identified PayPal as one of its potential new payment systems.
Apple chief executive Tim Cook said in November that Apple Pay could be introduced in Ireland soon. The system is already in use in Northern Ireland and in Britain.
The tech giant has already announced that it will be expanded into Spain this year, as well as China, Hong Kong and Singapore.
Apple Pay and Samsung Pay work by registering your credit card with Apple or Samsung. Once a pin code or a fingerprint is applied, the smartwatch or phone can then pay for an item in a shop by swiping it next to an equipped cash register system. The method works in a similar way to existing contactless debit cards.
A potential tie-up with CIE is a part of a wider initiative within the Irish semi-state transport company to update the way it interacts with Irish travellers and commuters. Part of this is set to include new, more user-friendly refund mechanisms.
CIE also wants to introduce new technology "that will rate customers based on their online behaviour". The initiative is is being considered as a way of cutting down on so-called 'chargebacks', a problem for retailers battling fraud.
It is also looking at new ways to combat fraud and security.
At present, the semi-state company says that it has "no measures in place" for fraud or security screening when taking payment over the phone. CIE uses chip and pin security to fight fraud at vending machines, in booking offices and on board trains. It uses the '3D Secure' process for online payments.
Of the 2.86m annual payment transactions taken by CIE for bus and rail tickets, 51pc (1.45m) occur on vending machines. 40pc (1.15m) of payments are taken online by CIE, while only 9pc (0.26m) of payments now occur over the phone, at a booking office or on board a train.
Meanwhile, Visa dominates Irish passengers' payment card habits, with 2.5m of the 2.9m annual card payments accorded to Visa. The lion's share of these payments occur on debit cards, with over 2m payments processed on Visa Debit cards compared to just under 400,000 payments recorded on Visa credit cards.
By comparison, the total number of all Mastercard payment transactions on CIE is under 300,000 per annum, or 10pc of the transport company's card-based customer payments.
The company is also trialling "off the shelf" tablet devices on board trains which it hopes to make compatible with traveller payments over Bluetooth.
CIE's updated IT system is not expected to be completed until next year. However, the semi-state company is already making plans to avoid disruption when upgrading its payments systems.
"It is critical to CIE Group companies that any changes in how the service is currently provided would be seamless and invisible to our customers and that the process is managed by the service provider," said documents published by CIE. "It is essential that CIE Group companies have reliability and continuity during any transition phase."
According to its most recent annual report, 238m "journeys" were recorded by CIE in 2014, 119m of which were on Dublin Bus.
Payment systems such as Apple Pay and Samsung Pay have reportedly been slow to gain adoption among everyday shoppers.
In the US, 17pc of people who own newer iPhones have tried Apple Pay, an increase from 9pc in 2014, according to a survey by Pymnts and InfoScout, a consumer researcher. The system can now be used in over 2m locations, including retail chains such as Crate & Barrel, Chick-fil-A and Au Bon Pain.
Apple is currently ramping up in markets where people are more comfortable with so-called contactless payments. In Ireland, such payments are estimated to be a small percentage of the market according to the last published figures from Visa.
Adoption of Apple Pay has been faster in Britain and Northern Ireland than in some other Apple Pay countries due to a 40pc iOS phone market share and agreements with merchants such as sandwich chain Pret A Manger and Twickenham Stadium in London.
Globally, mobile payments are predicted to increase to €550bn this year, up from €400bn in 2015, according to a report from TrendForce.
Meanwhile, eMarketer estimates that the total value of transactions made by tapping a phone on an in-store terminal will reach €190bn this year, up from €8bn in 2015.
Samsung Pay is expected to expand its services in more countries this year, with Britain and China topping its list. The payment service is not expected to debut in Ireland this year.
Systems such as Apple Pay and Samsung Pay are currently expanding into new commercial areas. US banks Wells Fargo and Bank of America are currently working to integrate Apple Pay into their ATM machines, with Bank Of Ireland reportedly planning an announcement this month on a new cardless ATM solution in a number of major US cities.
Wells Fargo, which currently supports Google's Android Pay mobile wallet, said it plans to roll out technology to connect ATMs to digital wallets in the second quarter of this year. The bank also said that it is evaluating additional wallets.