The future of transport is digital: the customers

by Philippe Clapin and Didier Le Guirriec, Sopra Steria France

In our series of three articles looking at the digitization of transport we will explore some of the most impactful areas of this new paradigm:

  1. The customer
  2. Management of services
  3. Infrastructure

This first article will look at the customer, the driving force behind the digitization of the service.

Why digitize?

There has been a major shift in consumer perception and expectation of how a service works. This can be attributed to the rise of the Internet and in particular to the consumezisation of the Internet with platforms like Facebook and apps like Uber. Gartner has been watching and predicting outcomes from this consumerization and expect fluidic and dramatic changes in how services expect to be delivered.

Our customers are rapidly becoming technology sophisticates and as we move well into the 21stcentury, those customers will be the true digital natives, with an expectation that the products and services they use are digital. In addition, public transport is seeing increasingly heavy usage patterns as people including those in less developed countries, move into urban areas. Transport is an area that is now crossing the chasm into the age of digitization and with that comes challenges in how to handle the end to end customer experience and at the same time optimise on the use of technology to enhance this experience.

Challenges of serving the customer in a digitized transport system

One of the challenges and also the greatest benefit of a digitized transport system is the offering of a contactless payment method.

Contactless ticketing challenges: To truly embed contactless ticketing into a given transport system, it needs to be holistic. That is, it needs to work across every touch point in the transport eco-system – from carriers, to passengers, to local authorities and transport providers. Each must be enabled to proffer, moderate and accept the contactless method. Taking the system and extending it to cover all modes of transport, including, car shares, trains, buses, taxis and even bike hire schemes, is also part of the remit of the contactless ticketing network.

As part of this challenge, industry bodies such as the Smart Ticketing Alliance and Smart Card Alliance are working towards creating standards and industry collaboration, similar to those in the mobile phone ad banking sectors to encourage interoperability between transport systems throughout Europe.

Contactless ticketing benefits: The paramount benefit of offering a contactless ticketing system to customers is convenience. Urban transport is seeing some negative changes, including increased commute time. The average commute in London is 74 minutes and in New York it’s 75 minutes. Anything that can speed up a person’s journey is welcome and a quick swipe of a card, as opposed to pushing a ticket through a barrier, can do that – how often have we experienced a ticket getting stuck in a barrier or being held up by someone experiencing that?

People like contactless too. It’s easy to use. You don’t have to remember to ‘top up’ cards and you can use the device, such as a mobile phone, that you use for all of your other transactions. In fact the idea of contactless payments, in general, is taking off. In the UK there are 76 million contactless cards issued (more than the total population). In Australia, two thirds of the population own a contactless card and 53% use those regularly. In the US 80% of those who have contactless cards used them once a week. The reason for the popularity of contactless is the removal of barriers through ease of use and contactless ticketing is just another application of this method.

Transport for London is one of the first systems in the world to embrace contactless ticketing in a holistic manner. TfL have found this new system, which is integrated across almost all modes of transport in London, to be a success, with 20% of all pay-as-you go journeys now contactless less than a year since its launch.

One of the other major benefits to both the consumer and the transport provider is the integrated nature of the contactless ticketing system. Contactless is a more personalized and transparent method of ticketing and provides more insightful audit. Users can keep track of their payments and check out their travel habits in a way traditional ticketing doesn’t allow. Transport providers can offer enhanced services and have constant contact with their customers.

Security is a possible area of concern for contactless ticketing. However, as tickets are generally at the lower price bracket they in turn have a lower barrier to uptake. Further, older technologies incorporating magnetic strips could be counterfeited, whereas many contactless ticketing systems utilize modern security techniques and authentication methods.

Strasbourg Transport Company: a modern day contactless ticketing success

The Strasbourg Transport Company (STC) is a successful example of how contactless ticketing can work. They have rolled out a Near Field Communication (NFC) method of transport ticketing to the French cities of Strasbourg and Caen. The ticketing system is based on a mobile app known as U’GO which utilizes NFC technology to purchase tickets on public transport across the cities.

One of the great benefits of the system is that it is entirely ticketless. The cost of the new system is less than a tenth of the cost of a paper-based ticketing system, savings in paper and printing alone being part of this cost reduction. The system itself is entirely turnkey, with a connected mobile app, website and information system. The system has taken into account modern requirements of multicultural, connected, smart cities with multi-lingual web content and adaptive design for use across device types. The approach that STC is using is an all-encompassing one – supporting customers from ‘door-to-door’ and embracing dialogue and discourse through online content and social outlets.

In a survey on the U’GO ticketing system, 90% said it was a useful application and 85% said they would be continued users of the system.

The future

Contactless ticketing opens up a number of new avenues to make travelling easier, cheaper and more convenient. Contactless ticketing has the potential to offer other add on value services such as vouchers and gift opportunities. As well as cutting ongoing costs, it allows a transport provider to truly interact with their consumers and build a trusted relationship.

Discover more about our experience delivering intelligent transport solutions.

Why do we design “mobile first”?

What does mobile first mean?

Mobile first design refers to the philosophy that the solution should be designed for smaller screen sizes before creating design solutions for larger screen sizes. This is based on the underlying idea that is it much easier to scale a design up than it is to try and squeeze elements into a smaller area.

This concept came from the development and design approach of responsive web design. This uses “break points” at specified widths in the document to display a different design or layout in response to the width of the browser in which the document is being viewed. This allows for the same codebase to display different layouts in response to the width of the document.

Why mobile first design?

When the responsive design approach first began, many designers were so used to creating designs to be used on desktop or laptop devices that they instinctively started with that type of layout when creating a new design.

This caused a lot of issues and complications, as the information being displayed in a large screen format didn’t display well when being forced into a much smaller screen space. Important information was lost, hidden down a long scrolling screen, or removed altogether as designers decided that users only needed limited information on smaller screens or mobile devices.

The approach of designing for the mobile first, or from the smallest screen size up, means that the designer has to think consciously about the importance of content in the information architecture. As the screen size increases the areas of content can expand and be realigned into layouts that make more use of the screen’s real estate.

Focusing on the information architecture from the beginning means that the most important and noteworthy information is presented where it is easily discoverable. Information of less importance is displayed in areas of slightly less importance, and so on.

This approach lets the presentation of the content in relation to its importance guide the layout of the system.

But the system doesn’t need to work on mobile?

“Mobile first” is simply a name. It was coined when the philosophy was first developed to clearly articulate the need to design websites for mobile devices such as phones and tablets before designing layouts for larger screened devices such as laptops and desktop. Even in such a short period of time the name has become antiquated, but is still in use, even when “smallest screen first” makes more sense.

Even though a system is not to be built to work on mobile devices, the philosophy of designing for the smallest screen that it could be displayed on first, before scaling up to larger screen layouts remains. Thinking about the information architecture in detail before beginning any design will always provide better results.

What are your thoughts on website design? Leave a reply below or contact me by email.

Mobile payments?

Oh no!” (I can hear you say) “Not another blog about mobile payments…” Well, yes… and no.

I’m probably as fed up as you are with a lot of the stuff that gets written about “mobile payments” – almost as fed up as I am with the nonsense that people write about “mobile wallets”, but that’s a whole different discussion.

Why am I fed up? Well, basically because many of the blog posts and articles and much of the commentary around mobile payments cast too wide a net and addresses products, solutions or developments that are way wide of the mark when compared against a proper expression of a mobile payment implementation. All of this noise helps to perpetuate the idea that anything which involves:

  1. a mobile phone, and
  2. a payment of some sort

automatically qualifies as a “mobile payment”.

So, if I take out my Samsung Galaxy S4 and use the Chrome browser to call up the Tesco Dotcom site, place an order for groceries to be delivered over the weekend and then pay for the goods by entering my credit card details, then that’s a mobile payment, right? Or if my friendly neighbourhood plumber fixes that annoying leak under the sink and he accepts my credit card payment (well, it was an emergency!) by using his iPhone connected to an iZettle card reader, I’ve just made a mobile payment, haven’t I?

Compare that to walking into your nearest Starbucks with your Starbucks Rewards app open on your iPhone and presenting the “Pay” barcode to the scanner at the till to buy a caramel macchiato and a chocolate muffin – see the difference? It’s not the best example of a mobile payment by a long way, but at least it’s heading in the right direction insofar as you haven’t had to supply any payment credentials at the point of interaction to effect the payment (as in the Tesco example above) and you haven’t had to provide your plastic card to complete the transaction (as in the payment to the emergency plumber). Instead, information related to a payment card – in this case, the Starbucks Rewards card linked to a pre-paid account has been transferred from your mobile phone to the point of sale terminal, and all you had to do was wave your iPhone screen in front of the scanner.

If you want to get technical about it, you had to open your iPhone, which requires a screen swipe and (hopefully) a passcode; then you had to look for and open the Starbucks app; then you had to click on the “Pay” button and then orient the iPhone screen in such a way that the barcode could be read by the awkwardly positioned laser scanner… But it was easy, wasn’t it? And you got a star for making the purchase with your Starbucks Rewards card (in your iPhone app). So maybe it wasn’t that easy and it could have been better designed to ensure a smoother, more convenient customer experience, but it’s still more like a “real” mobile payment than the other examples above, despite its sub-optimal implementation.

So, in my view, there are true mobile payment solutions and there are other implementations which are “mobile payments” in name only. But what makes a good mobile payment product, as far as I’m concerned? Well, there are a number of factors at play in building a fit for purpose solution in the mobile payments space, including security, functionality and ubiquity of acceptance, but most of them revolve around the customer and the customer’s experience of using the mobile payment solution. I talk about this aspect of mobile payments and what customers are looking for in a mobile payment product in my recent white paper on mobile payments as well as discussing what makes a mobile payment a mobile payment. Take a look at it: it might help you appreciate why I get fed up with some of the stuff that I read about “mobile payments”.

What do you think? Post a reply below, contact me by email at liam.lannon@soprasteria.com.

The future of mobile payments is contactless

Mobile payments may well be set for a period of explosive growth, according to the recent Guardian article “Mobile payments: the brave new cashless future”, but it won’t just be down to Apple Pay, despite its apparent success since launching in the US in October of last year.

Yes, Apple Pay might be convenient and secure – two of the three consumer-centric attributes which MasterCard’s Jorn Lambert identified in the same article as key to the success of m-payments – given its reliance on a tokenized set of card credentials in an embedded Secure Element, a Touch ID payment authorisation process and a slick user interface. However, it falls short when it comes to the third attribute identified by Lambert, namely ubiquity. Never mind that Apple Pay is only accepted at the 3% of US retail terminals which have been upgraded to support contactless payments, it is also only available today on the iPhone 6 (and soon on the iPhone 5 for anyone who pairs it with an Apple Watch) so it definitely won’t be everyone’s favourite way to pay, at least in the short term.

Separately, Kevin Dallas of Worldpay took the view that merchants need to ensure that they partner with the “right” payment app since research suggests that consumers will only load one or two payment apps on their phones to avoid confusion. Since in-store retail payments still account for over 90% of all payment transactions by dollar volume, we would argue that the “right” mobile payment app for merchants to support is one which is optimised for use at a point of sale (POS) terminal. The following might help those merchants who are still sitting on the payments app fence come to the right decision:

  • Apple Pay was launched to support both in-app and tokenized in-store NFC (contactless) payments
  • Samsung Pay has just been launched to support both NFC and magnetic secure transmission technology (MST)
  • Google have recently announced support for Android Pay which uses NFC and tokenization
  • MasterCard announced (Sept 2014) that all legacy POS devices in Europe must support contactless payments by 1 January 2020, with all new POS devices to be compliant from the start of 2016

Merchants who today accept card payments will – in five years or less – be accepting contactless card and mobile payments. Those merchants who today do not accept cards but who want to accept mobile payments would do well to consider a future where smartphone penetration is expected to reach 6bn subscriptions by 2020, where the dominant handset models will be mobile payment and NFC-compliant and where their competitors are servicing customers with these handsets at contactless POS terminals for both low and high value transactions.

That’s right: the future of mobile payments isn’t cashless, it’s contactless.

Why digital transformation? My current three key questions – what are yours?

i) What things CAN’T your customers or employees do on their own mobiles to use or serve your products and services?

ii) Do you have one application that gives your employees all the RIGHT information about the relationship you have with a specific customer or client?

iii) Is there is one area of your business (no matter how small or large) that if improved to WORK SMARTER could deliver big benefits quickly for customers and/or employees?

Answering one or more of these questions can help a client find the critical pain points that could be addressed using new ways of working supported by digital technology – the power of digital transformation!

Let me know your top three…

Customer service in a connected device world

By 2020 it is predicted that 50 billion devices will be connected to the internet. The estimates from various sources vary by tens of billions, but the trend is undoubtedly rising to a massive number. By 2020 around 3 billion people will have the means to own multiple devices, many of them connected constantly. Most vehicles will have significant connectivity. Consumer goods will be unusual in not having connection, and embedded connectivity will be present in billions of sensors that can be monitored and controlled.

We are seeing a rapid evolution from simple networked devices, through networked industries where supply and service chains are interconnected, to a vision of “networked everything” including the customer and their expectations of service, with the ability to compare alternatives constantly.

What impact will this have on customer service?

As physical objects become more like services due to their ubiquitous connectivity, the customer service associated with a product also becomes more like that expected from a service. There will be a reduction in basic setup questions and also reporting of faults, as pro-active self-diagnosis will be the norm. The need to activate and manage warranties, repairs and reverse logistics will be much reduced. All of this will cut down the need for contact centre support on a transactional basis. Mobile and tablet channels will inevitably become the centre of “networked everything” interactions, being the natural control centres for the end user. The vast majority of device service interactions will be invisible to the owner.

There should also be a corresponding increase in data-driven offers and responses that can be used to enhance and differentiate the experience of product ownership. An evolution of interaction, building on social networking principles that are both non-intrusive and natural will be the key to successful service delivery.

All of this will be location independent – customer service will be expected and demanded at any time and in any place, and the device itself can react in real time.

How will brand equity be preserved with so much automation and standardisation of service levels? Here basic customer experience principles will still apply. When the products are becoming ever smarter, keeping the customer in the centre of the service management process will be the main challenge and not leaving them feeling disconnected, or from a service marketing perspective unaware of the great service being provided in the background.

The sheer volume of device interactions must be distilled into the traditional “moments of truth” in a customer journey, and where before these often dealt with problem resolution should focus more on the building and maintenance of brand reputation and differentiation. The service design principles behind this are evolving and will ultimately redefine customer satisfaction – or else the ability to quickly lose your brand reputation in the new world of connected smart devices.