Dear Sir or Madam, In July 2017, Transport for London told its Customer Service and Operational Performance Panel that the cost of collecting fares had fallen from 14.3% of revenue in the 2005-2006 fiscal year to 9.2% in 2015-2016. I would like to know the cost of revenue collection, in percentage terms, for the current fiscal year. If a figure is not available for this current fiscal year, please let me know the latest available percentage figure for the cost of revenue collection. Also, please let me know if TfL has quantified to what extent the introduction of contactless payments has contributed to the decline in the cost of revenue collection. And finally, please let me know the percentage of contactless transactions that are initiated from NFC wallets connected with smartphones and wearables in the current fiscal year or at the latest point for which a figure is available in 2019. Thank you.

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TfL Ref: FOI-1977-1920

Thank you for your request of 1^st October 2019 asking for information about the cost of revenue collection and use of NFC-enabled mobile wallets.

Your request has been considered in accordance with the requirements of the Freedom of Information Act and our information access policy.

Specifically you asked:

“In July 2017, Transport for London told its Customer Service and Operational Performance Panel that the cost of collecting fares had fallen from 14.3% of revenue in the 2005-2006 fiscal year to 9.2% in 2015-2016. I would like to know the cost of revenue collection, in percentage terms, for the current fiscal year. If a figure is not available for this current fiscal year, please let me know the latest available percentage figure for the cost of revenue collection.

Also, please let me know if TfL has quantified to what extent the introduction of contactless payments has contributed to the decline in the cost of revenue collection.

And finally, please let me know the percentage of contactless transactions that are initiated from NFC wallets connected with smartphones and wearables in the current fiscal year or at the latest point for which a figure is available in 2019.”

The last year for which a cost of revenue collection analysis has been completed is 2015/16. We do not, therefore, hold a more recent analysis to answer the first part of your request (note that under the FOI Act public bodies are not required to create new information to respond to requests). The cost of revenue collection consists of a large number of elements such as maintenance of ticket gates and readers, ticket machines and back office systems. We have not attempted to identify the cost reductions attributable solely to contactless payments, as we are seeing a range of changes in customer behaviour all of which drive cost reductions in their own rights. However, we are able to identify that the cost of processing a contactless transaction is around 80% lower than the cost of processing a transaction at an Oyster Ticket Stop. Transactions made using mobile and other non-card devices constitute 20% of all contactless payments.

If this is not the information you are looking for please do not hesitate to contact me.

Please see the attached information sheet for details of your right to appeal as well as information on copyright and what to do if you would like to re-use any of the information we have disclosed.

Yours sincerely,

David Wells

FOI Case Officer

FOI Case Management Team

General Counsel

Transport for London

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