Smart Payments for Smart Cities

David Smith is a cryptographer with 12 years of experience in both the public and private sectors. He is currently working on his second startup that will track and interpret the use of contactless payments in the Greater China region. His expertise includes: system design and implementation with contact and contactless smart cards, smart card personalization, mobile payments, and general knowledge and experience with APAC market trends and consumer preferences.    Email: D avid@thesmartcardinstitute.com


David Smith is a cryptographer with 12 years of experience in both the public and private sectors. He is currently working on his second startup that will track and interpret the use of contactless payments in the Greater China region. His expertise includes: system design and implementation with contact and contactless smart cards, smart card personalization, mobile payments, and general knowledge and experience with APAC market trends and consumer preferences.

Email: David@thesmartcardinstitute.com

Smart cities are the answer to enhancing the quality of life for its citizens. The last decade has seen many cities around the globe like Amsterdam, Dubai, Singapore, Shanghai etc pledge that they would implement the strategies and infrastructure required to become smart cities.  A smart city is an urban area which uses Information and Communication technologies (ICT) along with Internet of Things (IoT) sensors to collect data and provide better access to city services like utilities, transit, education, health services, information systems and other community services. At the heart of all smart city initiatives is the need to provide better services to citizens. 

Providing these essential services however is based on two components. The first is identification. Smart cities must identify the citizen to access the eligibility for a particular service. This may be especially required for subsidized services like education and healthcare. The other is payment. Most services like transit, utilities, information systems etc are not free. Others are subsidized. As such, smart cities are always looking for better payment technology to facilitate, easy and convenient modes of payments for its citizens. In this article we look at different initiatives that facilitate use of smart or digital payments to provide essential services in smart cities around the world.

Following are some of the areas where payment technology has been used to enhance services in smart cities.   

1. Transport: Many cities around the world have implemented smart rechargeable transit cardswhich can be used in different modes of public transport available in the city like metro, buses, taxis and water taxis. The card also carries the identity of the person and can be used as a concession card for students, senior citizens and disabled. Notable among these is the NOL cardimplemented in Dubai, the Kiev smart cardetc. Some cities are exploring the use of mobile wallets to pay for transport. Ridesharing applications like Uber, Lyft and Ola which are commonly used in cities around the world, also encourage digital payments for transport. 

2.     Utilities: Paying for utilities like power, water and gas is essential for residents as well as businesses.  Smart cities provide multiple options for making these payments through kiosks, online portals, direct debit from banks, or POS at the bill collection centre. Development of these options is not only convenient for the residents but also enables faster revenue collection for city officials and enables easy tracking of defaulters.  

3.     Public Facilities: Public areas, parking spaces, community halls and sports, fitness and recreational facilities can be booked and paid for online in smart cities. This applies to booking of barbeque pits and camping sites in national parks, tennis/badminton courts, party halls etc for communal use. Kiosks can also be made available at stations and other common places where users can make payments for these facilities. Singapore allows booking and payment of multiple lifestyle, community, transport and government services through its AXS networkwhich includes kiosks, e-payment and mobile payment options and supports all major credit cards.

4.     Mobile Payments: Access to secure and government supported mobile payment applications provide an easy and convenient option to transact between any two parties and promote smart and cashless societies.  In Dubai, two mobile applications, mPayand DubaiNow, can be used for payment of wide range services from utilities/traffic fines to educational, health, transport, and business services.

5.     Data Collection: Data collected from smart payments can be further used to make cities smarter. For example, Data from transit cards can be used by governing bodies in the city to improve the transport networks and provide better connectivity from point A to point B.  Payments transaction data is a key source of data for running analytics and can provide important markers to the governing bodies to make key decisions. 

By embedding the digital payments culture into a city’s DNA, advanced payment technology can truly enhance the quality of life in any city making it smarter on the whole. It not only makes it safer by reducing the reliance on cash but also provides a large reservoir of data that can be used for future analysis and development. 

Considering that more than 80% of the US population is urban, there are few smart city development initiatives in the US. China which is still considered to be a developing Asian country boasts of half of the smart cities in the world. Leading technology companies like Google and Apple were born in the US, so clearly US has the required technology resources to implement smart cities. Leading global smart cities like Dubai and Singapore have taken advantage of their small size and centralized governments to achieve greater success in implementing smart city initiatives. In the US however, this development has been fragmented. Also there are bureaucratic challenges due to civil and constitutional rights and data privacy laws. To overcome these challenges, government bodies and technology companies need to work together to find a way to incorporate the better way of living promised by smart cities while ensuring privacy.