Oyster card: Taking over London from libraries to leisure centres

The Oyster card looks set to reach far beyond the barriers of London's Underground network, as cash becomes a dirty word in London's public sector.

Speaking today at the Consult Hyperion Digital Money Forum in London, Charles Monheim, director of transport for London's Oyster card, said the company is looking to rid London's public transport of cash payments, from buses to car parking.

"We are waving cash goodbye... We're removing cash from buses entirely by 2006," he said. "Transport is the killer application [for e-money]."

In order to deter customers from using coins rather than card, cash customers will be forced to pay a premium over card-carriers. Such a system is already used on the Tube, where non-Oyster ticket holders pay 20 per cent extra or above, depending on the time of day.

The conversion of street-level parking from cash to Oyster card payments will take longer, Monheim said, but will happen. "With on-street parking, both consumers and merchants are getting fed up with cash... The City of London is taking the lead in taking cash from machines."

However, Monheim admitted the push to more Oyster usage is not about customer convenience, it's about cost-cutting.

"The challenge for us on the tube is to move customers from relatively high-cost channels to relatively low-cost channels... we're saving 15 to 20 per cent by virtue of converting to smart card ticketing."

Monheim said Oyster card is now looking to expand into entirely new areas.

"We are looking for an e-money partner... we're also looking for technology partners to help us navigate the right place for a contactless payment card in the marketplace - an organisation with a certain amount of vision and foresight to roll with punches," he said.

The Oyster card has already broken out of its initial transport niche and can be used in conjunction with a number of local councils' services.

There are a few boroughs in London that provide access to services along with the Oyster service including some which offer access to library or leisure centre facilities, using the card as an authentication mechanism. Monheim said: "For those that don't want to be smart, they can use the Oyster card branded as their council card."

The card is also being used to access parking lots. "We're doing trials with parking in our own parking lots, thereby avoiding regulation," he joked.