At this point, it’s almost a cliché to note the ways fintech has helped modernize how money moves. From instant payments to BNPL, businesses and consumers enjoy a promising ecosystem of products tailored to a range of expedient and personal needs. 

What’s less commented on, however, is the way fintech has revolutionized money on the move. That is, fintech’s injection into core transit use cases has helped modernize old-school systems carrying billions of dollars of transactions per year. At the same time, new and experimental products may foreshadow major changes to the role of transportation infrastructure to commerce in the coming years.

Tap-to-pay

While public transit systems across the US have integrated fintech-driven payments solutions into their networks, few have done so with as much of a splash as New York’s Metropolitan Transit Authority (MTA). Officials launched the One Metro New York (or OMNY) system in 2020 with an estimated implementation budget of $772M. The system lets riders use a contactless payment card—either a proprietary OMNY card or a contactless payment card/device—to access the city’s buses and subways.

While riders can still use physical MetroCards to pay for their fares, OMNY has arguably been a success. The system recorded its billionth OMNY-enabled ride in July, logging customers from all 195 countries that issue credit cards to have taken advantage of the system. In addition, 68% of OMNY-enabled payments were made using digital wallets on smartphones and wearables like smartwatches.

However, OMNY’s rollout hasn’t been without controversy. Most recently, 404 Media discovered that anyone with a rider’s card number and expiration date could track their trips from the past week—a privacy flaw that one expert dubbed “a great fit for abusers.” Privacy experts also expressed concern over law enforcement agencies’ ease of access to rider data through the new digital system. With this mixed track record, local advocates continue to push for transparent and stringent data-safety measures, as well as redoubled efforts to make OMNY an accessible system for unbanked riders. 

Biometrics

This morning, Mercedes and Mastercard announced the launch of their biometric-payments partnership, which allows drivers in Germany using their fingerprint sensor to carry out transactions at more than 3,600 service stations across the country. 

The feature effectively turns the car into another form of digital wallet-friendly hardware, which may function as a promising product differentiator when compared to other luxury automakers. Market research suggests that half of Germany’s 18- to 39-year-olds would use the car’s infotainment display to make purchases, while 60% would pay for gas or an electric charge using their car. 

“An intuitive payment process and a best-in-class customer experience lay the foundation for the success of digital offerings,” said Franz Reiner, Chairman of the Board of Mercedes-Benz. “We are pioneers in native in-car payment and are already working on the integration of further services.”

How Mercedes’ program fares compared to its market research will certainly dictate how—or whether—other car companies follow suit. 

Telematics

Straddling fintech, insurtech, and hardware, telematics represent another burgeoning front shaping how people move and pay for transportation. For instance, in 2022, Intuit’s Credit Karma launched Karma Drive, which monitors members’ driving habits, creates a driving score for each member, and connects them with auto insurers according to members’ anonymized driving scores. After logging a certain number of trips through the Credit Karma app, and according to members’ driving patterns, members receive discounted quotes from insurance partners. 

According to Rory Joyce, GM of Insurance at Credit Karma told The Financial Revolutionist that the company’s existing relationship with consumers lets it offer telematics through its smartphone app to users, and sell other insurance and financial solutions in the process. 

“Telling a customer ‘Hey, your credit improved, so now might be a great time to save money on your insurance for your Ford F-150’ isn’t a conversation anyone can have at top of funnel,” he said. “When we lean into personalization, when we make a recommendation around insurance, it builds trust, and it creates relevance, and so people are more likely to engage with us [moving forward].” 

Other solutions, such as Driver Technologies’ mobile app, apparently share Intuit’s view that the best entry point for selling telematic products are their smartphones. Users trust the hardware they already use on a daily basis—explaining the wide implementation of new products shaping in transit in cars, trains, buses, and beyond.