Visa's "Wave to Pay" Offers Transit Purchases via iPhone Swipe

iPhone MetroCard

Paying for your subway ride may soon require just a wave of your iPhone rather than a swipe of a metro card.

Visa announced today initiatives in New York and California to create more convenient payment experiences for riders of mass transit. The company is aiming to integrate VisaNet, its electronic payment system, to let commuters avoid the hassle of digging through a wallet or pocket book for cash as the subway pulls away from the station.

The New York pilot program is more promising than L.A.’s, where the company is simply testing prepaid cards. Though the NYC trial has been open for several months, thanks to Visa joining the pilot, microSD-enabled smartphones can now be used to make payments. Visa has worked with contactless solutions firm DeviceFidelity to bring this functionality to the iPhone. Using Visa’s payWave technology, smartphones with embedded chips are converted into payment devices that communicate securely with card readers at fare gates. Commuters will now only have to wave their iPhone or BlackBerry to gain access—no more fumbling for money or metro cards.

Currently, the pilot will be available on trains, buses, and at 28 subway stations in New York. Additionally, more than 10,000 cabs are already equipped with Visa payWave terminals, enabling passengers to pay with smartphones in taxis as well.

Visa isn’t the first company to employ pay-wave technology. Citigroup is testing a pilot called PayPass with MasterCard, which enables riders to wave certain credit cards and Nokia phones for access. These tap-and-go payments have been available for months, but have gained little traction among commuters due to a lack of education about the product, security concerns, and slim availability (PayPass MasterCards are required).

If Visa can make its new technology known to riders, especially the fact that it is available in smartphones as trusted and ubiquitous as the iPhone, then metro cards may soon be a thing of the past.

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  • Paul K McGregor

    @Sheena Medina I definitely agree with you on the limitation of fare options. I live in Salt Lake City and the local transit agency, UTA, uses the paywave system as their tap-n-go system or the more technical term the open architeture system. However, it is limited only to the adult full fares so it has no use for any discount fares. UTA's system is also available for Visa, MasterCard and Discover too. I have a Visa paywave and have had no problem when I use it.

  • Brent

    Transit agencies can take the money saved in farecard material and use it to fund more police to collar iPhone muggers picking off easy targets...

  • Sheena Medina

    The real problem with implementing pay-wave or Tap-and-go technology isn't lack of availability. I would argue that it is lack of fare options. Daily commuters don't pay as they go. They buy monthly or weekly passes. I lived in Chicago for 7 years and can say that the CTA has already successfully adopted "tap-and-go" with the Chicago Card and Chicago Card Plus. Both cards offer faster boarding by simply tapping it against the card reader. You don't even need to take the card out of your wallet, and the Chicago Card Plus offers an unlimited 30 day pass and automatic refilling.

    My other concern regarding the security of the Visa pay-wave system is that if you lost your phone, it would be like loosing your phone AND credit card at the same time. They say, "If a mobile device is lost or stolen, account holders should contact their issuer. The issuer can immediately deactivate the account." If your phone is lost/stolen, you don't have an immediate way to contact anyone! Especially if you live in a big city, such as New York (where they are currently testing), it could be hours before you are able to finally reach someone you know. By that point who knows how many unauthorized transactions have occurred?

    If companies are serious about getting daily commuters, which I assume is their target audience, to adopt this technology, then the complete line of fare options needs to be available, and there needs to be some kind of emergency system put in place to combat loss/theft. Otherwise as the first video shows above, people will continue to bypass the newer technology with payment options that are more familiar AND suited to their exact needs.

  • Skylar Joyner

    Sheena, you have made a few valid points. Today, in every major city especially, it is difficult to impossible to find pay phone booths. Losing a cell phone is a huge concern, especially if it is becoming the de facto payment device for transportation et al. Today as well, we have no privacy as a society in the United States and Europe at least. Leon, Mexico is setting the standard for the future in their retina scans/eye scanning in terms of eliminating the cell phone and implementing what everyone has already- eyes in terms of the ultimate security and verifiable payment mechanism globally.