CEBU and Mandaue City’s public transportation is being transformed with contactless payment technology on modern jeepneys. Good Transport Solutions Inc. (GTSI), a transit mobility solutions provider, and GHL Systems, a leading nationwide payment service provider and payment acquirer, developed this innovative initiative. As the first of its kind in the Philippines, the project provides commuters and tourists with faster and more convenient fare payment options.
The launch of this project, celebrated at the Cebu IT Park Transport Terminal, includes 120 modern jeepneys in Cebu and 20 in Mandaue City, all equipped with Visa-enabled payment terminals. Visa, GTSI, and GHL have collaborated to improve public transportation efficiency and provide commuters with more accessible payment options. Local transport operators like Lahug Apas Transport Cooperative (Latransco) and Mandaue Transport Cooperative (MTC) are key players in this venture.
Benefits and challenges
Jeff Navarro, Visa Philippines country manager, highlighted the project’s benefits, particularly for the tourism industry, as it allows smoother travel experiences. He emphasized that contactless payments are the future of transit, offering convenience and security. This is especially timely as Cebu experiences a tourism rebound, with visitor numbers up by 69 percent in early 2024. The surge underscores the growing need for digital payment options in public transport to serve tourists and daily commuters.
In an email interview, Navarro outlined the challenges Visa anticipates in expanding its contactless payment system to other regions and transit modes across the Philippines. One key challenge is ensuring the existing transport infrastructure is prepared to handle this new technology, especially since different operators use different systems. “All relevant stakeholders would need to discuss and present the solutions individually, per operator,” Navarro explained, emphasizing the need for transport operators’ openness to adopt digital payments for the project’s success.
While the Department of Transportation’s mandate supports this shift, broad adoption will take time. Visa works closely with partners to deploy the technology and educate transport operators and commuters. Navarro stressed Visa’s role as a “connector in the ecosystem” committed to ensuring data security and transaction reliability as the system grows. Another significant challenge lies in addressing data management and payment interoperability. While 96 percent of Asia-Pacific commuters expect seamless contactless payment options, ensuring a smooth transition across various digital payment platforms in the Philippines will require strategic collaboration between Visa, local transport cooperatives and government agencies.
Global experience, expansion goals
According to Navarro, Visa’s extensive experience supporting over 650 global contactless transit projects will help the Philippines transition to a fully digital transit payment system. Visa’s push for open-loop payment systems, already successful in major cities like London, Singapore and Sydney, aims to digitize communities and economies in rapidly urbanizing regions. Cebu and Mandaue City stand to gain similar benefits, as commuters will experience faster and smoother transactions during their daily travels.
To measure the success of this initiative, Navarro stated, “Every digital payment, regardless of size, signifies progress towards displacing cash.” In the first six to 12 months, Visa aims for 10-20 percent of payments to be digital, with hopes to increase this to 30 percent by the second year. Success metrics include adoption rates, contactless transaction volumes, reduced cash-based payments and customer satisfaction.
Industry support
Brezhnev Tero, CEO of Good Transport Solutions Inc., described the initiative as a milestone for the transport sector in the Philippines. By introducing their Bus Revenue Tracker System (BRTS), the collaboration is expected to streamline fare collection and improve the commuter experience. Tero noted that this sets a new standard for public transport in the country, making travel smoother and more efficient.
These sentiments were echoed by Jay Tirona, CEO of GHL Systems Philippines Inc. He pointed out that digital payment innovation can drive social and economic change. He emphasized that this approach will eventually expand to more public transport systems nationwide, enhancing convenience for Filipinos.
Regional push for urban mobility
This move toward contactless payments is part of a larger effort across the Asia-Pacific to improve urban mobility. Visa’s Global Urban Mobility survey found that 58 percent of commuters prefer a unified payment method across various modes of transportation, aligning with the open-loop system introduced in Cebu and Mandaue City.
Navarro concluded by reaffirming Visa’s commitment to making payments more inclusive and enhancing the efficiency of urban mobility. He expressed optimism that this pilot project would lead to broader adoption nationwide, setting the stage for more innovative and reliable public transportation systems in the Philippines.
This groundbreaking project marks the beginning of a more efficient and inclusive public transportation system in the Philippines, paving the way for the nationwide adoption of contactless payments.
Be the first to comment