In 2002, the OV-chipkaart was introduced in The Netherlands as a nationwide infrastructure for public transport payments. Ever since, it has been widely adopted: in 2019, before the COVID-19 pandemic, which affected the public transport massively, Translink Systems, the organization behind the OV-chipkaart, reported a total of 2.83 billion transactions and 15.3 million (against a population of 17.28 million (CBS, 2022)) smartcards in use (Translink Systems, 2020). This so-called “closed-loop” infrastructure that the OV-chipkaart uses dedicated smartcards that users can top up with funds. The major disadvantage of this: the funds remain on the card and are lost whenever the card is lost. Recently, the NS (Nationale Spoorwegen, or the Dutch National Railroads organization) announced the introduction of the OVpay testing program and accompanying OVpay bèta application. This new and popular method enables travelers to tap their contactless debit/credit card or Apple Pay, Google Pay, etc. enabled mobile phones on the already existing sensor-gates at all stations in the country. This brings many advantages to both travelers and the transport company. This new so-called “open-loop” infrastructure uses a “pay-as-you-go” method, which brings more flexibility. The traveler will always pay the lowest price because the fare is calculated after check-out. Before, the “OV-chipkaart” would deduct a certain amount from the card as a deposit and return the amount that was deducted too much after check-out. If one forgot to check-out, this whole amount had to be paid by the traveler; with OVpay this won’t be the case anymore. In addition, the compatibility with mobile payment methods means one less card in the traveler’s wallet, making the wallet even more obsolete.
For transport companies, benefits include minimal adjustments to the current infrastructure (NS only reported some sensor-gates not optimally working as of now), no more ticket machine investments, improved performance of stations and trains, and minimal adoption effort resulting in a higher customer satisfaction.
NS believes that the future lies with the “pay-as-you-go” system, which has already been adopted in major metropolitan areas such as New York, London, and Tokyo. When all the testing results in positive feedback, NS will slowly start replacing the “OV-chipkaart” with OVpay (Ocampo, 2020) (OVpay, 2022).
CBS. (2022, September 28). Bevolkingsteller. Opgehaald van Centraal Bureau voor Statistiek: https://www.cbs.nl/nl-nl/visualisaties/dashboard-bevolking/bevolkingsteller
Ocampo, S. Z. (2020, May 4). Contactless payment: the future of public transport. Opgehaald van Computop: https://computop.com/payment-insights/en/mobility-en/contactless-payment-the-future-of-public-transport/
OVpay. (2022). Opgehaald van OVpay: https://ovpay.nl/nl
Translink Systems. (2020, April 23). Translink ziet resultaten in 2019 verder verbeteren. Opgehaald van Translink: https://www.translink.nl/newspost/translink-ziet-resultaten-in-2019-verder-verbetere
Interesting topic and good to know that NS is about to develop and launch OVpay. The struggle was real: before having the free ‘OV-Chipkaart for students, I regularly had to top up my OV-Chipkaart before traveling since travellers can only check-in if they have at least 20 euros in the balance of their OV-Chipkaart. However, as I was often running late, it was very stressful to top up the OV-Chipkaart as I had to catch the train. The OVpay would be a true lifesaver! Nevertheless, I am still wondering what will happen after a traveller forgets to check-out with the implementation of the OVpay. In that case, I suppose that NS will still deduct a certain amount of money from the bank account, which doesn’t differ in method with the current implementation of the ‘OV-Chipkaart’.
Great to hear that NS is finally coming to the party with mobile payments. The only query I have is The Netherlands opposition to credit. Most Dutch stores only accept Maestro and owning a credit card is something rarely seen in Europe. So it will be interesting to see how ‘open loop’ the system actually is – will they accept Visa, American Express etc.? Also the new trend in public transport is adding your travel card to your phone’s wallet. So it will be really cool if you could have the free OV student travel directly on your phone!
Very good news! Especially for students who are not dutch (like me) and that struggled so much to buy tickets due to the lack of an OV-chipkaart. I always wondered why such innovative system was not allowing direct debits on creditcards; Contactless payments for metro rides already exist in many cities in Europe and a similar payment method extended to all the public transportations would ease the trips and connections for the users without a personal OV-chipkaart. However, since OVpay will mainly interest tourists and people from abroad, I hope it will accept most of the creditcards (including mastercard) and it will not be limited on the maestro circuit as most of the shops and facilities do in the Netherlands.
Dear Jona, thank you for the good post!
The bus I am traveling on in the weekend already allows pay-as-you-go, very interesting to see what the reasons are behind the system.
Also what Fiona states in the comment is the thought of how the check-out problem will be solved by the new system. However, I see technical opportunities for a mobile app that reminds user to checkout or even IOT that can register whether an individual leaves the bus to resolve and automate this problem. Or, maybe even easier, change the payment system as a whole. For instance in Madrid, an individual pays for the usage of the subway, regardless where the individual gets off. Nevertheless, this new system will create real benefits.
Interesting topic and good to know that NS is about to develop and launch OVpay. The struggle was real: before having the free ‘OV-Chipkaart for students, I regularly had to top up my OV-Chipkaart before traveling since travellers can only check-in if they have at least 20 euros in the balance of their OV-Chipkaart. However, as I was often running late, it was very stressful to top up the OV-Chipkaart as I had to catch the train. The OVpay would be a true lifesaver! Nevertheless, I am still wondering what will happen after a traveller forgets to check-out with the implementation of the OVpay. In that case, I suppose that NS will still deduct a certain amount of money from the bank account, which doesn’t differ in method with the current implementation of the ‘OV-Chipkaart’.
Very good news! Especially for students who are not dutch (like me) and that struggled so much to buy tickets due to the lack of an OV-chipkaart. I always wondered why such innovative system was not allowing direct debits on creditcards; Contactless payments for metro rides already exist in many cities in Europe and a similar payment method extended to all the public transportations would ease the trips and connections for the users without a personal OV-chipkaart. However, since OVpay will mainly interest tourists and foreigns, I hope it will accept most of the creditcards (including mastercard) and it will not be limited on the maestro circuit as most of the shops and facilities do in the Netherlands.