01/16/2018 09:04 EST | Updated 01/16/2018 09:38 EST

Canadian Cities Must Start Using Open-Loop Transit Systems

An open-loop system allows for the use of the cards where your money is stored and accessible: debit and credit.

Were you stuck in traffic today? Yesterday? Expecting the same tomorrow?

Whether jammed into a bus or streetcar, or turtling along in a car, the transit woes of big city residents continue to handcuff governments, businesses and commuters. Putting the brakes on the economic impact of lost productivity and strained infrastructure has proven a challenge.

One of the more recent and extensive studies placed the cost of congestion for the Toronto region alone at more than $11 billion. And it's not going to get easier.

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In the next 30 years, the number of urban dwellers globally is projected to nearly double, to more than six billion – that's basically eight of every 10 people on the planet clustered into cities. Canada is already a microcosm of this phenomenon, as cities feel the pressure of concentrated immigration and continued population shift from rural to urban centres. This shift impacts the ability of citizens to move quickly and easily, but an opportunity lies in mass public transit to reduce congestion and get people moving.

People often focus on infrastructure as the heart of public transit trouble. One opportunity to ease the system stress is simply better collaboration between the private and public sector. Joining forces can enhance urban planning, create a more frictionless commute, reduce lost productivity and improve the lives of residents.

Here's how

Most Canadian cities only offer "closed-loop" transit systems that use a proprietary card, like the Compass Card in Vancouver and the Presto Card in Toronto and Ottawa. An open-loop system allows for the use of the cards where your money is stored and accessible: debit and credit. The good news is the first open-loop project in Canada is actually now underway in Laval, Quebec where contactless debit and credit can be tapped to pay bus fares.

Steve Russell via Getty Images
New Presto machines on Toronto's subway line.

Contactless payment on open-loop systems is the future of public transportation. Presto and Compass are moving there. London in the U.K is there now: 40 per cent of all trips on the tube, double deckers, boats and rail lines use contactless payments, and it has cut fare collection costs by 30 per cent. And New York City has followed suit, recently announcing contactless payments across all subway stations and buses by late 2020.

The benefits of connected transit through a digital system extend beyond simply convenience. Cost savings from a streamlined ticketing operation can be reinvested in aging infrastructure to upgrade tracks and trains.

And you can use payments-enabled data to predict peak traffic – and then influence traffic patterns by providing commuters with information about the best way to get from A to B at any given time – in real-time. It creates a better flow of people around a city and a more efficient use of scarce public resources.

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We're seeing more and more pressure on Canadian cities to embrace open-loop contactless payment. Programs are under development in Toronto, Vancouver, Edmonton and Ottawa.

Everyone's moving in this direction. It's time all Canadian cities get on the bus, like innovative cities have in other parts of the world.

Iain McLean is Senior Vice President of Canada Market Development, Mastercard Canada

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