The government aims to have a plan by the end of this year that lets people use their mobile phones or smart cards to pay for travel across England's public transport system.
Such a system could save £2.6 billion per year in cash and reduce the use of motor vehicles, according to government figures. The Department for Transport has started a consultation to solicit input from the public, which will run until October 28.
The smart cards and mobile phones would use near-field communication (NFC) technology, with embedded microchips storing transport credit.
The system would be centred on a technical platform called ITSO, which was created by a nonprofit organisation. ITSO is a set of technical standards for integrated smart ticketing, which would allow passengers to use smart cards or their mobile phones for tickets sold by different transport entities. It is an open specification, and any manufacturer can build products that use it.
The best-known smart card technology used in the UK is the Oyster card, which is compatible with most transport systems in greater London. But the Oyster card, launched in 2003 and used on 78 percent of bus and subway trips in London, won't be in the running for use across England.
"Oyster is a proprietary system with only one supplier and was designed specifically for London, so it is not flexible enough to deal with a wide range of tickets that might be required for a national standard," according to a Department for Transport consultation document.
The system offers many benefits for passengers. Tickets don't have to be purchased in stations, which reduces queues at stations, passengers can board buses and pass through turnstiles faster, and passengers don't have to deal with loose change.
But while smart card and mobile phone payment technology is mature, use of the systems is not widespread due to cost and technology issues, according to the consultation.
The up-front infrastructure costs to implement the system could be as much as £1.1 billion, with running costs around £260 million annually. However, the 10-year projection is that for every £1 spent on the system, £7 in benefits would be derived, the document said.
Many European payment cards allow for contactless payments under a certain amount. In the UK, the maximum purchase allowed is £10 without the cardholder entering their four-digit PIN (Personal Identification Number).
NFC-enabled mobile phones are not common yet. The Department of Transport, however, said there are indications the mobile phone industry will release those kinds of mobiles in larger numbers soon, with one unnamed manufacturer planning to release a model later this year.