In 2014, 54 percent of the world’s population lived in developed cities and this number is expected to reach 66 percent by 2050. With all that growth, it’s essential that those cities can handle the growth with innovations that make daily tasks easier and cheaper. For example, London does a great job of this with London Underground’s Oyster Card, a contactless card that transmits payment details wirelessly between the terminal and the PayPass card. More commonly known as "tap and go," this wireless card payment allows for easy transactions and tracking by tapping a card on the way in to the Tube in London and the same on the way out.

To find out more about using new payment methods to further advance “smart cities”, Will Judge, MasterCard’s Head of Urban Mobility and former Transit of London Executive, talks about the future of cities.

Judge, once on the front lines of the project that brought tap-and-go to the Tube, hopes to do the same worldwide. He finds that all cities have their own unique qualities and payment platforms to make this large increase in city population possible and hopes to use the feature for more than transportation. He hopes to turn the much-used contactless ticketing system into a contactless payment system. This feature would be best if multiple sources were linked together so that one app could do mapping, travel, food, etc. Although it’s no easy task to take these siloed apps and knit them together, it is the future of the fintech industry and the end to carrying cash in our pockets.

When asked to comment on this type of multi-application integration for contactless payments, Judge said, “Where we are with contactless NFC on mobile, matches the card use case in experience and value proposition. But I think what will happen is that over time transit providers like TFL and those in other cities will add a whole bunch of other services around the mobile NFC transaction for transit.” 

Judge also mentions how a shift towards this type of “smart city” and payment method can’t be done in a day and it can’t take place in all cities in the same way. Judge says, “The one thing I’ve learned from moving from Transport to London to MasterCard is that every payments market is different. The consumers are different, the economics are slightly different. Everybody has a slightly different starting point. And cities are different, too.” 

With authorization being delivered in less than 500 milliseconds for current uses, the integration of contactless payments will include the unpacking and reengineering the components of contactless payments. This is just one way in which contactless payments will become more suitable for cities. With a third of paid journeys on the Tube in London being paid for with contactless payments, becoming a smart city has definitely zeroed in on this important factor.               

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