From June to December of 2010, the MTA, or Metropolitan Transportation Authority of New York, ran a pilot program with MasterCard for tap-and-go payments. The pilot system allowed commuters to enter 26 MTA subway stations and board eight MTA bus lines (of the 468 subway stations and 183 bus routes throughout the city) simply by tapping their credit cards at MasterCard PayPass-enabled terminals to make what's called a "contactless" payment. This same technology can also accept PayPass-enabled smartphones, so future customers will be able to pay with services such as Google Wallet.
Now, for the first time ever, the results of the pilot have been provided exclusively to Fast Company, offering insight into just how much traction this technology is seeing among consumers--and how far it is from entering the mainstream, as corporate giants like MasterCard and Visa expect. During the six-month pilot, approximately 17,000 customers entered MTA subway stations and buses via MasterCard's tap-and-go PayPass system--in total, these commuters tapped roughly 74,000 times. Both MasterCard and the MTA have hailed the pilot as a triumph--MasterCard emerging payments head Ed McLaughlin told me it was a "very, very successful trial." Now, the MTA says it's  "quickly moving beyond the pilot--going into production and implementing this new system across the entire MTA network," a full rollout of the "contactless" fare payment system in all buses and subway stations by 2015.
There are many ways to look at the pilot numbers shared with Fast Company, and few angles that offer apples-to-apples comparisons. On the one hand, of the 7 million commuters who flow through the MTA's subway turnstiles and buses every day, 17,000 customers represents just 00.24% of its daily ridership. Arguably, that figure is skewed because the pilot was available at only a handful stations and bus lines. On the other hand, given that the pilot only garnered 17,000 customers and 74,000 taps in all six months of the program, one could contend that the percentage of PayPass entries was even more minuscule considering the MTA's overall ridership during that period--a total monthly ridership that averaged about 135 million during the months of June through November, according to MTA figures.
Still, not only was the pilot a short-term initiative at a fraction of MTA locations, but the "contactless" technology behind the program was very new in the eyes of consumers in 2010--and is still considered very new for consumers today. Yet despite a lack of marketing for the pilot or much consumer education about the technology, about 50% of users who tapped at an MTA PayPass terminal tapped more than once during the pilot period. Of course, that also means that 50% of users who tried the system never once used it again, suggesting the program was as much of a novelty for some customers as it was a convenience for others.
The MTA also provided Fast Company with station-by-station rankings of the pilot program. But, again, these figures offer apples-to-oranges comparisons since the MTA's statistics only include a breakdown of total accepted transactions over the entire pilot period, rather than day-by-day figures for the total amount of unique customers. Grand Central Station, for example, the second most highly trafficked subway station in New York, had an average weekday subway ridership  of 144,350 in 2010. The MTA's "contactless" program received just 9,941 transactions over the course of the entire pilot period. Less popular stations were not so lucky: The M79 bus lines saw just 717 transactions in all six months, while the 138th Street subway station at Grand Concourse saw just 188 total transactions.
Aaron Donovan, a spokesperson for the MTA, calls the program a "technology pilot" that wasn't "aimed at assessing customer acceptance." When asked why the pilot was deemed a success, Donovan says, "[Because] it showed us that it is a workable system for our environment." By email, he ticked off what the MTA learned from the pilot: that "contactless" payments could be securely implemented; that the payment method could allow customers to transfer seamlessly across all regions of the system, from the MTA's subway stations and buses to New Jersey Transit to Path trains; and that the system could endure tough conditions (e.g. it would still work on a bumpy bus ride), and work with multiple brands, including MasterCard and Visa.
When asked whether the MTA took the amount of customers who used the system--17,000--into consideration, Donovan reiterated that the point of the pilot was only to test the functionality of the system. "We did not have a clear demarcated threshold by which [we needed] more than this number or that percentage," he says. "It wasn't about customer acceptance."
Given that the MTA has decided to roll out the system across New York, to all subway stations and buses, I asked several times whether the MTA would still have gone ahead with the program, then, if only 5,000 customers or even zero customers had used the system during the pilot.
"Well, that's a hypothetical--that's just not the case," he says. "Zero, 20, you're making up numbers, and that's not the case. We did have the number we had, and we're happy with the number we had. Again, I'm not going to go back and second guess anything after the fact, and go into the realm of hypotheticals. I'm not sure what else to add to the fact that we looked at the pilot for the technology. Given the transactions that occurred, we feel that the test of the technology was a success."
Of course, the rollout of this technology is likely inevitable, just as it was for the MTA to move from tokens to plastic MetroCards. And Donovan says there are clear benefits of the program, from faster boarding times to reduced costs for fare collection.
Still, the MTA is saddled with debt , not to mention a budget deficit, and the question always remains which new projects are worth investing in. "At this early stage, I don't think we have a cost estimate," Donovan says of the program's implementation. When asked whether the MTA had any projections of whether the reduced costs of fare collection from "contactless" payments might offset the cost of implementing the system, Donovan says he's unsure.
"I know the former MTA chairman Jay Walder was fond of saying that it costs the MTA 15 cents, under the current fare structure, to collect every dollar in fares," he adds. "So even a 1-cent reduction in that cost is worth tens if not hundreds of millions of dollars given the magnitude of the fares we collect."
The "contactless" program will roll out in phases through the end of 2015.