Global financial services company American Express has announced a new collaboration with New York’s Metropolitan Transportation Authority (MTA) to bring contactless payments to transit riders in New York City.
In the announcement, American Express expressed its belief in modern payment capabilities and expect providing the ability to pay via contactless can promote “a more efficient and user-friendly payment experience for its Card Members.”
American Express cardholders can also use their cards in digital wallets through MTA’s new contactless fare system – One Metro New York (OMNY).
“We’re committed to making contactless accessible for our Card Members in the U.S. and are working with merchants across the country to make this a reality,” said Jaromir Divilek, executive vice president, American Express.
American Express plans to push contactless engagement further by issuing all new consumer cards after July 1 with contactless capability.
Furthermore, the firm is collaborating with Cubic Transportation Systems, a provider of transit fare solutions, to integrate contactless payments with the MTA and accelerate similar programs with other transit authorities worldwide.
Divilek continued: “Around the world, once consumers have experienced the speed, convenience and security of contactless payments in their transit system, they are more likely to tap-and-pay at restaurants, retailers, and more.
“We are excited about the benefits contactless can bring to both our U.S. merchants and Card Members.”
The start of a contactless journey
It is predicated by late 2020, OMNY will be available throughout the entire New York City subway system and on all MTA bus routes.
Speaking to PaymentExpert, Daniel Kornitzer, chief business development officer at Paysafe Group, explained New York’s transit adoption of contactless payments is a “great example” of the country catching up with payment technology.
He commented: “The US has tended to lag behind many western European markets, including the UK, in rolling out contactless.
“According to consumer research we undertook last year, only 3% of American consumers are currently making contactless card payments versus 54% in the UK. Transport for London, which operates the London Underground and the city’s overland train system, has had it in place for almost five years.
“But this doesn’t mean that there isn’t an appetite among US consumers and businesses to adopt the technology. Our research among small-to-medium-sized businesses in the US and Canada actually indicates that over 60% plan to accept near field communication within the next two years.”
Kornitzer continued by explaining that contactless cards may not have the same relevance in the US as they do in the UK due to NFC-enabled mobile wallet technology which is already migrating payment preferences away from cards to smartphone and wearable technology.
“Adoption may therefore grow slowly initially in parallel with mobile wallets, and although a user base will be established, we won’t see a rapid increase in usage for two years, which is the natural pattern for new technology that’s still unknown to most US consumers,” explained Kornitzer.
“Once contactless has fully filtered into the mainstream, however we can expect to see the rate of adoption accelerate dramatically, possibly reaching the current European levels and as much as 50% of all in-store payments by 2023.”