For the typical commuter, catching public transport does not spark joy. Whether or not you’re elbowing your way through the masses to hop on a bus, or getting stuck behind someone who has insufficient funds on their transit card.
To ensure a seamless journey, Littlepay has been building a world-class open loop transit payments system for both operators and commuters via contactless EMV (Europay, MasterCard and Visa) since 2016.
We sat down with Amin Shayan, CEO of Littlepay, based at Stone & Chalk Melbourne, to find out how their transit-focussed payments platform works. The startup has now enabled 80 different bus operators across the UK, Ireland and Scotland.
Amin says, “When Transport for London enabled contactless EMV payments in 2014, it was a watershed moment as the first major city to show that this could be done at scale. Today, over 50 per cent of all London transport tickets are purchased with a bankcard instead of the old Oyster card.”
“It’s been a huge success, and it’s a great customer experience. I go to London, tap my phone or my bank card on the gate, and go through. No need to buy a card, top up, download an app, or any of that. Just use your existing bank card and travel,” he says.
Although, the London transport system isn’t perfect, Amin says it’s headed in the right direction by trying to simplify the adoption of contactless payments using any bankcard.
Before diving into the world of fintech, Amin worked in investment banking.
Amin explains, “The traditional payment rails were designed for retail, not transit. In retail, you know the value of what you’re purchasing, and can wait a few seconds for the authorisation of the payment to come back and confirm you have funds. The size of the transaction is also usually large, so the fee structures of payments are not an impediment.”
Transit is a different story. For one, you don’t know the final value when you tap – often there are complex fare rules to be applied as to whether a transaction is capped, zoned or discounted. You can also only wait 300 milliseconds between commuters or you end up with a logjam. Additionally, the average values are small, creating the need to aggregate payments to reduce the number of settlement charges to the Merchant.
Littlepay are at the helm of solving these technical problems by creating a flexible, API-based platform, which enables the components of the transport system to be unbundled, and loosely coupled. This gives the operators choice and flexibility.
Currently Littlepay is Stone & Chalk’s largest tenant in Melbourne. Amin says, “It’s been really great being in the innovation hub. Since being here, hiring talent has become a whole lot easier as they love the dynamic space, strong community and the overall vibe.”
“We’re always on the lookout for good developers, and are proud to be one of the few startups in Australia that can provide end-to-end exposure to payment processing. Our developers get to work on integrations with POS devices, integration with banks, the latest cloud tech, security and encryption” With plans to scale internationally, Amin says that one of their biggest challenges is communicating across two time zones, with client interactions in GMT time and product and system developments in AEST time zone.
“We’ve gradually developed systems and processes which allow everyone to stay across both aspects of the business, however it’s an ongoing challenge.”
The other major challenge for Littlepay is that transit services are over a century old, with locally adopted practices which differ for every market.
“Fare types are different, local payment systems, banking and scheme rules can vary by region and by country, and therefore you have a very complex ecosystem to navigate as you move into new markets.”
Speaking about the startup journey, Amin says each day brings a new challenge, “It’s a fantastic adventure, in which you are continuously learning.”
Find out more about how Littlepay is configuring solutions for transit payment systems.