Sydney's biometric payment trial may dredge up old fears

Transit systems are attracting contactless payment technology, but there are other options on the horizon that could make boarding easier than tapping a card or smartphone — provided riders are comfortable with an experience like something out of Minority Report.

One option is facial recognition, using technology similar to the extensive camera setups in cashierless stores such as Amazon Go. Cameras would capture images of riders at the turnstile to provide instant access, making it a “just walk in” experience that's akin to electronic toll collection systems.

Speaking at the Sydney Institute last week, Andrew Constance, the minister of transport and roads for New South Wales, said frictionless transport payments are planned, using facial recognition technology that would link to the users’ Opal account.

Brendon Thorne/Bloomberg

Opal is the physical fare card for Sydney’s transit system and has supported contactless payments since 2017. Contactless payments via Apple Pay, Google Pay and other mobile wallets are possible, though Opal is not directly integrated within them.

Facial recognition would eliminate the need for a mobile wallet since it would directly link to the riders’ Opal accounts, and third party wallets would remain as an option — though the apps would still require a contactless tap to board the system.

The trial expands biometrics to a venue that may require a new level of trust from consumers. In the early days of biometric payments, many consumers were wary of storing a fingerprint with a merchant. They were more willing to trust a bank or a single mobile wallet provider such as Apple or Google.

Constance did not provide a timeline or details on a trial, and the Sydney transport authority, Transport for New South Wales, did not offer comment. Cubic, the technology company that is working on Sydney’s transit payment modernization, did not return a request for comment.

Transit systems often update payments as part of broader upgrades. New York, for example, is introducing its OMNY open loop contactless payment replacement for Metrocards as the transit system develops the Second Avenue Subway and extends subway service to the Hudson Yards development. Denver’s transit system is integrating with Uber’s app as Denver expands commuter rail to the airport and other parts of the metropolitan area. And London has expanded contactless payments as the system adds the Elizabeth Line to link different parts of the region.

In Sydney, facial recognition would build upon other transit payment initiatives, such as subscription payments for an account that would work across different transportation systems, such as mass transit, bike sharing and taxi-hailing apps. Sydney also recently introduced a driverless metro system to add to a mix of heavy rail commuter trains, light rail and ferries.

The integration of biometrics into transit systems comes at a time when transit payments are quickly modernizing.

Boosted by the idea that transit payments are habit forming and have a halo effect that spurs usage of contactless or mobile payments elsewhere, Apple, Mastercard, Visa and Uber have placed heavy bets on transit modernization.

Apple has made transit part of its strategy to expand Apple Pay, while Visa has opened an innovation hub dedicated to transit payments.

The deployments have come fast enough to create technology gaps at systems that adopted contactless payments earlier than the present wave. Apple has built a new transit feature called Express Transit that reduces authentication requirements to take advantage of the tiny window of time a commuter spends entering a system. New York, Portland, Ore., and Beijing have adopted Express Transit, but London — which links its transit network to an open-loop digital system, has not as of yet.

The proposed Sydney biometric system, like Apple’s expedited entry, is designed to eliminate as much navigation as possible to move people in and out of the system.

But biometrics, particularly facial recognition, faces challenges.

“This would be practical in a closed-loop transit environment, but it would require riders to register and opt-in, which would limit participation and increase start-up costs,” said Randy Vanderhoof, director of the U.S. Payments Forum, who consults with transit systems on payment upgrades.

There are also potential issues with the technology itself.

“My big question is how soon the technology can achieve the required accuracy and speed of transaction. Unlike with facial recognition on the phone, the biometric template would have to be stored in the cloud, rather than on the device (e.g. turnstile),” said Zil Bareisis, a senior analyst at Celent.

And since the concept requires surveillance cameras, privacy would be an added concern.

“Facial recognition to pick specific people out of a crowd, as opposed to opening a phone or an app, is likely to meet pushback from the public and political representatives,” said Tim Sloane, vice president of payments innovation at Mercator Advisory Group. “While in theory using facial recognition to open transit gates would represent a major convenience, it won’t be lost on those citizens that the technology could then be used to detect other people the government has an interest in.”