From bikes to scooters to trains, taxis, and self-driving cars, mobility is a hot topic. Find out how payments are along for the ride.
It’s 2020, and not since Henry Ford created his Model T in 1908 has there been such a revolution in mobility. From low-cost air travel with EasyJet to ridesharing with Uber and now the scooter boom with the likes of Lime, in recent years we’ve seen businesses develop that help us get around easier, and improve the quality of life for many.
Next time you visit a new city, count the different ways you can get around. In the past you might’ve been able to locate a shop for bike rentals, hail a cab, or book a train, but could you tap your phone and ride off on a bike or an electric scooter? Could you jump in a car and drive to your destination? Could you get a taxi without cash or card? The answer is simply, no.
Adyen has been helping many mobility businesses, so in this guide we’re going to look at the boom, what’s coming next, and where payments come into the equation.
Mobility-as-a-service (MaaS) platforms are expected to replace more than 2.3 billion urban private car journeys annually by 2023. It’s nothing short of a revolution in how we get around. McKinsey refers to this as mobility’s ‘second great inflection point’, alluding to the impact that mobility companies have on society as a whole.
“Past the inflection came gasoline, paved roads and highways, motels, fast-food restaurants, and suburbia. Mobility was not just cars, but parts manufacturers and suppliers, mechanics, taxis, buses, commuter railways, and, in time, metro-area airports.”
The advent of shared mobility, data connectivity, and electric vehicles are set to have a similar impact. For one thing, they facilitate even more ways to travel. Scooters aren’t new, and neither is sharing, but put them together and paying with an app, and you have something pretty exciting.
The second part of this inflection point means more jobs, more modern jobs. Where in the past they were predominantly manufacturing, today we’re talking about software developers, data scientists, and localization teams, as well as those resolving the modern problems with these new methods of transport; charging, setting up, and parking these new vehicles.
We can only speculate on what the 2050 equivalent of a freeway will be, but it’ll almost certainly be different from the roads we know today.
Colin Lim ∙ CEO, mobilityX
You have a flight to catch for an important work trip to a foreign city. You’re running late, so you leave the house without much thought. You open your phone and book your *insert taxi app of choice*, it's set up with Apple Pay.
You arrive at the airport in the nick of time and rush through security. That’s when what seems like a disaster strikes. You’ve forgotten your wallet with all of your cash and cards...
Ten years ago, you’d probably have to leave the airport and go home, missing your flight and jeopardizing your entire trip. Nowadays, if you have your phone, you’re set. Your multi-transport app covers you for taxis, bikes, scooters, and mopeds. Lunch, dinner, drinks, and a replacement toothbrush are covered by your mobile wallet.
In 2018, mobile wallet payments (Apple Pay, Google Pay™, Alipay, WeChat Pay) made online and in-app increased by 40%.
Card information is stored on your smartphone, while information is shared after authentication (usually a fingerprint or passcode). We see that mobile wallets are a great option for mobility companies, as the payment flow is completed within the app.
Payments become a key topic when we start to think about the data-focused, autonomous approach to modern mobility. You don’t have to go to a vehicle rental store or a taxi rank anymore, it’s a smartphone tap and you’re away.
When Uber started in 2009, their founders weren’t necessarily thinking about payment methods, but in introducing in-app payments, they have changed how many of us pay for transport. The security of pre-quoted rides and pre-paying mean that users don’t need to worry about what they’ll be charged at the end of the ride. Similarly, drivers aren’t concerned about counterfeit banknotes, and the dread of the passenger who doesn’t have cash.
In our industry, we refer to these flows as invisible payments, as they require no customer action.
Today, mobility companies need a set-up that’s easy to maintain from a distance. This means access to a great number of data points, and a platform that can fight fraud and provide high authorization rates. Riders and passengers need to be able to pay without fuss.
Payments data provides customer info and their journey history in real-time, so you can investigate your customer segments, their behavior, and test what works best for them. With one overview of all markets, reporting is made easy across borders and even continents whether you’re in Austria or Australia. Having one integration means that data reports in new regions have similar structure to existing reports in more familiar locales so it’s easy to use the data from day one.
Mobile wallets fit under the umbrella of tokenization. But why are they so important for mobility companies?
Martti Ilves, Bolt’s Head of Payments, sums it up nicely:
“We like to implement options that don’t require customer registration and improve the flow for people without a Bolt account. Apple Pay and Google Pay™ for example. Adyen’s tokenization tooling means that payments for mobile wallets can be made on a recurring basis, and when riders authenticate once, the info is stored.”
The flow from download to ride needs to be kept to as few steps as possible. For Bolt the set up goes like this:
The user downloads the app, enters their registration code and away they go. Riders can still pay with cash, but if the phone is set up with a mobile wallet, the option is illustrated, riders can also add additional payment methods.
How payments data can help you grow your business using real-time research, performance optimization analysis and more.
Sixt are doing it, FreeNow are doing it, and smaller local transport authorities like the BVG in Berlin are doing it with Jelbi. One app, one login, one payment method; all urban methods of transport.
Users upload a selfie along with photos of their passport and driving licence, then verify a way to pay. Using Jelbi as an example, users register once and can travel any way they want: buses, trains, scooters, bikes, cars, ridesharing and taxi.
Tokenized payments in these apps make it so users don’t need to add a new payment method for every method of transport they use.
The clue is in the name, mobility. Mobility often means getting from A to B, from a business perspective though, mobility can also mean growth and expansion. Many companies start organically in one city, but expanding doesn’t necessarily mean moving into other nearby locations.
Take Movo as an example, they first found success in a congested, sprawling city - Madrid. But when it came to expanding, they wanted to operate in similar car-first megacities with creaking public transportation systems; they looked to Latin America. In 2020, national borders are less important as a gateway to doing business.
Reporting: Having one integration means that your reports are presented in the same format, no matter where they’re coming from. This is especially helpful if you’re in an unfamiliar locale and means you can compare and contrast things like authorization rates, most popular payment methods, and fraud hotspots.
No extra development or implementation:
"The ability to expand our service in new markets without having to face extra development or implementation costs around our payments setup has been essential to our business." - Alvaro Pellejero, Founder, Movo.
Local payment methods: Adyen offers the most used and widest range of payment methods, so if your business needs to implement the most popular payment method quickly, we have it covered.
Integrating each payment method separately is time-consuming for a wide range of people in your org. Not only does it take a lot of development work to integrate each method, but you’ll have to maintain the integration as regulations change and updates occur. You’ll also have to manage separate contracts and reporting for each method.
For mobility companies moving into new cities and countries, it’s much easier if your payments provider can handle all of this for you. One contract and one integration with Adyen gives you access to all key local payment methods around the world, optimized for mobile and ready to go. No need to set up a local entity in each new market; going live is as simple as flipping a switch.
You can even serve up a targeted list of payment methods based on your customers’ location, device, and basket value. So each customer only sees the payment methods relevant to them.
Hundreds of millions of people don’t use major credit card schemes, and when it comes to mobility the need to offer local payment methods is fundamental. You need to offer the payment methods that are easy to add to your app, secure and widely used.
The information in this graph has been compiled by Adyen based on actual transaction data, market knowledge and customer payment preferences. The numbers as presented per country will give you an indication of the payment method mix you can expect when selling online in that country. The actual mix will depend on other factors such as type of business, goods or services sold, average transaction value, your customer demographics, and others.
Ida Skog ∙ Finance Manager, FlixBus
At some stage, your users' stored payment information will expire. This is where network tokens come in. Network tokens are maintained by card networks and automatically updated when the shopper has any updates on the card details (including card expiry).
Network tokens were originally designed with ecommerce in mind, but with the rise of ride-hailing platforms the use cases expand to mobility companies. Our network tokenization cards are automatically updated and as a result, we see higher authorization rates compared to payments made without network tokens.
No involuntary churn
Card details are maintained by card networks, are always up-to-date and never expire.
Drastically reduces false-positive declines.
Declined tokens are saved by retrying with the PAN.
Adopts tomorrow's EMVCo-based token standard today, with no integration effort for you.
Tokens are supported by major networks in over 100 countries and counting
Fraud is a serious threat to any business, but the stakes become higher when it involves emerging technology. Cars, e-bikes, and scooters are high-value assets that must be protected against theft and illegitimate use. There is also the threat of GPS spoofing, fake accounts, and good old fashioned payment fraud, offering major causes for concern.
Using a smart fraud system that combines rule-based components with the latest in machine learning. Our risk management tools can assess specific mobility industry risk so you can reduce fraud from day one.
Another way to combat this threat is with data. Having all of your data in one place allows you to reduce false declines, keep track of trends in payment fraud, and see in which regions fraud is on the rise.
Martti Ilves ∙ Head of payments, Bolt
We’ve covered some of the overarching topics of mobility and payments, but here are some of the specifics we’d recommend for the different types of transportation.
The most traditional methods of transport are the most widely available, this means payment options must be broad to cater to people from all kinds of backgrounds. This can relate to where the passenger can pay, as well as the payment methods they offer.
Get a unified commerce setup. Companies like FlixBus have an ecommerce platform, an app, and POS terminals so passengers can book in advance, or even pay on the day. A unified approach allows them to see where their passengers come from and how frequently they travel. This lets them plan the most convenient routes and make sure their buses and trains aren’t overbooked.
When using a ridesharing platform, it’s important to know in advance what your ride will cost and that you can rely upon the rate provided regardless of traffic jams or detours. For the driver it’s about receiving a fair and guaranteed rate.
Offer mobile wallets. Allow users to get around without having to carry cash or payment cards. All they need is the app and internet access. Apple Pay, Google Pay™, Alipay and WeChat Pay are on the rise.
For drivers: Provide a third party payout solution. Our third party payout solution allows drivers to receive tips individually in an automated way.
With electric scooters and mopeds, the payment setup is about speed and convenience. Riders use an app to unlock their ride and expect to be able to ride off in a matter of seconds. Sluggish payment flows, or even worse, declines, are a disaster for riders and the business.
Set up invisible/in-app payments. Let first-time users input their payment information quickly, so for future rides it’s one tap, not an ordeal.
Adyen is the payments platform of choice for many of the world’s leading companies, providing a modern end-to-end infrastructure connecting directly to Visa, Mastercard, and consumers' globally preferred payment methods. Adyen delivers frictionless payments across online, mobile, and in-store channels. With offices across the world, Adyen serves customers including FlixBus, Uber, Bolt, Sixt, and Easyjet.
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