New York City’s contactless transit payment system hit 1 million transactions in its first 10 weeks

This is an excerpt from a story delivered exclusively to Business Insider Intelligence Payments & Commerce subscribers. To receive the full story plus other insights each morning, click here.
One Metro New York (OMNY), the city’s contactless transit payment system, hit 1 million cumulative transactions in its first 10 weeks since rolling out in late May, per Finextra. The system — which is currently only in place at 16 subway stations and on buses in one borough, and doesn’t yet accommodate prepaid transit cards — is being used, on average, 22,000 times per weekday, the MTA noted at a press conference.

The figures, which more than triple expectations and exceed "even the most optimistic forecasts," also indicate that a strong opening weekend was not a fluke, and that customers are continuing to warm up to contactless transit technology.

Here’s what it means: US consumers are receptive to contactless transit.

Despite tepid attitudes toward contactless until now, transit is winning customers over. In the US, contactless cards are on the verge of a boom: Last year, just 16% of US consumers had a contactless physical card, per TSYS, but with top US issuers including American Express, Bank of America, JPMorgan Chase, and Wells Fargo beginning to roll out the technology this year, that’s poised to change.

But of customers who have contactless tech, only 55% have used the technology at least once, with the other 45% not using it at all, largely because they think it’s just as convenient as a traditional card or are unsure where they can use it. Transit seems to overcome those hurdles in effectively prompting usage, though it’s worth noting that New York could be a hotbed for the tech, and results might not be as promising in other parts of the country.

The bigger picture: The split between mobile wallets and contactless physical cards for transit payments could indicate that the technology might be a tipping point for wallets in the US.

Most OMNY customers are paying with their phones rather than with physical cards. In its report, the MTA noted that 80% of payments are coming from digital wallets like Apple Pay, Google Pay, and Samsung Pay, with the other 20% coming from contactless physical cards.

This differs from overall US trends, as mobile wallet adoption has largely stagnated around 25% of users and customers aren’t forming significant habits around these wallets. This could indicate that transit — where mobile actually represents a considerable value-add over physical cards regarding convenience — might be a way to get more customers to test their wallets in a setting they return to daily, which could prompt habit formation.

Interested in getting the full story? Here are three ways to get access:

Sign up for Payments & Commerce Pro, Business Insider Intelligence’s expert product suite keeping you up-to-date on the people, technologies, trends, and companies shaping the future of consumerism, delivered to your inbox 6x a week. >> Get Started
Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Payments & Commerce Briefing, plus more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >>Learn More Now
Current subscribers can read the full briefing here.