Using Near Field Communication Technology to Improve Public Transportation

In an increasingly urbanized world, never before has public transportation been more important to moving people from point A to point B. Nevertheless, in many cities, making use of mass transit is a daunting task, as one seeks to navigate a disparate system of payments and tickets, and struggles with the idiosyncrasies of turnstiles and gates. Though seemingly a minute set of issues at first glance, the inconvenience of missed trains, crowded entrances and exits and seemingly impossible to navigate ticket machines can be costly to riders and transit authorities alike. Recently, our director of Investment Research, Zach Olson, experienced firsthand how technology can solve the bane of many an urbanite’s existence during a layover in Amsterdam.


After arriving at Schiphol Airport, it quickly becomes clear that transport in the Netherlands has always been pretty easy. The airport has its own train station right below the arrivals hall that can take you into the center of Amsterdam in 20 minutes at any hour, day or night. While one can purchase a ticket for a single ride like I did, anyone staying a little longer than a layover should consider the OV-chipkaart. The OV-chipkaart is a pass that allows you to use public transportation throughout the Netherlands. Whether you are taking a train to Amsterdam, riding the metro in Rotterdam or a tram in The Hague, you can use one method of payment for them all.



This user friendly solution is powered by some very impressive technology. Every transit ticket in the Netherlands, whether OV-chipkaart or single use, is embedded with a chip that allows it to communicate with the transit network. When you begin your trip, you “check in”, tapping your card up to a reader at the turnstile. When you arrive at your stop, you tap your card to the reader again, “checking out”. Communicating with your OV-chipkaart,  the reader is able to instantly determine your fare, and subtract it from your balance on the card. There is no fumbling with coins or tokens, no glitches with magnetic stripes, and no conductors punching cards: just a quick tap and you’re on your way.



Implementing this system on a national scale took nearly a decade, and many at first questioned its value. However, the Dutch people are quickly realizing the benefits of smart card technology. From the rider’s standpoint, a unified fare system makes using transit throughout the country extremely simple. What’s more, the speed of fare collection cuts down wait times at particularly busy stations. From the perspective of the transit authorities, smart cards allow for improved fare collection, and their security features cut down on fraud endemic to more antiquated systems.


In addition, the system’s “check in/check out” feature can also provide meaningful data about rider traffic to transit authorities, allowing authorities to improve scheduling and service. New features are in the works as well, including a pilot program to use NFC-enabled mobile phones instead of the OV-chipkaart itself. Overall, innovations like these make mass transit easier, more efficient and adaptable for everyone involved- including travelers looking to make the most of a long layover.

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