Vulindlela Moyo, Client Director at O-CITY
Digital transformation is reshaping economies across the globe, and South Africa is no exception.
Payment solution providers, including automated fare collection solution providers, are spearheading the change by delivering world-class digital technologies to improve people’s daily lives.
Popular apps like MyCiTi, Rea Vaya, and Uber exemplify the growing adoption of digital platforms for public and private transportation alike. These tools enable commuters to digitally plan routes, purchase tickets, and track vehicles in real time, significantly improving user convenience. However, cash is still a dominant payment method in South Africa’s transport sector, particularly in minibus taxis, which serve about 65% of all commuters.
The pace of change in the country has accelerated, largely due to consumer adoption of digital payments, which has further emboldened all sectors, including bus and rail transportation, to pursue digital solutions.
The Rapid Adoption of Digital Payments
From 2022 to 2024, the transaction value of digital payments in Africa soared by 42.4% and is predicted to increase at a 25% CAGR from 2025 to 2029. This adoption is enabled by innovative payment experiences for consumers, which reduce reliance on cash and boost transaction security.
Digital wallets have become prevalent across South Africa, with usage increasing by 91% from 2019 to 2023. Cities across South Africa are utilising NFC technology to tap into widespread digital wallet adoption, providing tap-and-go payment options to streamline payment collection offerings, increasing speed, convenience and security for transport users.
QR codes are another important technology that has been widely adopted in the region. They offer a cost-effective, hardware-agnostic alternative for POS transactions. The standardisation of QR codes enables merchants to accept payments from multiple wallets while providing a single QR code, removing the need for a POS terminal.
Together, these options allow consumers and merchants to benefit from quick and easy transactions without the inconvenience and risks of handling cash. These innovative payment technologies are a core element of smart-city solutions, and one of the best applications is the transport sector; providers can effectively manage complex transport infrastructure while satisfying a tech-savvy audience.
Public transportation in South Africa
The public transport landscape in South Africa is dynamic, diverse, and integral to the country’s economy and social fabric. With a mix of public and privately operated services, South Africa’s public transport systems are essential for connecting urban and rural populations across varied terrains.
These systems range from trains, buses and taxis to newer bus rapid transit (BRT) networks like Johannesburg’s Rea Vaya and Cape Town’s MyCiTi.
- Minibus Taxis: Minibus taxis are the most popular mode of public transport, carrying 65% of the country’s public transport passengers daily. Informal yet widely used, they offer affordable and flexible transit options. However, overcrowding, safety concerns and inconsistent schedules are common.
- Train Services: Operated by the Passenger Rail Agency of South Africa (PRASA), Metrorail connects urban areas and neighbouring towns, providing a cost-effective mode of transport. However, aging infrastructure, vandalism, and maintenance issues often lead to delays and service interruptions. The Gautrain, a high-speed rail connecting Johannesburg, Pretoria and O.R. Tambo International Airport, is a notable exception, offering a reliable, premium service aimed at commuters and tourists.
- Bus Services: Bus systems in South Africa include municipal buses, long-distance intercity buses and BRT systems in major cities. Municipal buses, operated by cities and provinces, are available in many urban centres but are often limited in reach and plagued by outdated fleets. BRT systems, such as Johannesburg’s Rea Vaya, Cape Town’s MyCiTi and Tshwane’s A Re Yeng, offer dedicated lanes and modern facilities, providing reliable, eco-friendly and faster alternatives in congested urban areas.
- Ride-Sharing and E-Hailing Services: E-hailing services, like Uber and Bolt, have gained popularity in urban areas, offering on-demand, app-based transport. Though more expensive than public options, they offer a convenient and safe alternative, particularly in areas with limited transport access.
Who is Driving Digitalisation Forward?
Public transport operators are seeking technological upgrades following the National Department of Transport’s (NDoT) vision to promote safe, reliable, effective, efficient, coordinated and integrated transportation. While some develop their solutions, which risk notwithstanding, the test of time due to complex customisations and ongoing maintenance requirements, others seek technology vendors with local and regional experience who can digitalise fare collection with their own modern solutions.
A great example is O-CITY, an automated fare collection solution from BPC. The solution uses open-loop technology with account-based principles to create a unified ticketing ecosystem with flexible fare settings. Commuters can conveniently pay for their travel using a mobile app, QR code or NFC technology, among other options.
In Johannesburg, South Africa’s economic hub, O-CITY is working on a transformative project to modernise the city’s bus network. The system will allow commuters to tap and pay for rides directly using their mobile devices, reducing reliance on cash transactions and improving overall efficiency.
With a fleet of modern, low-emission buses, dedicated lanes on major routes, and now non-cash payments, the transport operator contributes greatly to improved air quality and reduces the city’s carbon footprint. Each bus has real-time monitoring and GPS systems, providing live schedule updates and enhancing the rider experience. The project has also created jobs and skills training opportunities, contributing to economic growth and community empowerment. The project has garnered international recognition for its impact on urban mobility and sustainability.
Additionally, the data collected through these transactions provides valuable insights into commuter behaviour, enabling transport providers to optimise routes, schedules and fleet management while reducing operational costs.
O-CITY’s technology has proven instrumental in modernising transport payments across more than 130 cities. It supports passengers travelling by rail, shared taxis, buses, trams, and other types of transportation, showing that an intermodal urban environment is not a dream but a possibility.
The Role of Banks in the Transportation Ecosystem
Yet, moving one step further from digitalised public transportation to a smart, integrated transportation ecosystem requires banks to innovate in the mobility payments sector. By pre-processing open-loop cards, banks can collaborate with public transport operators and technology providers to tap into the smart city ecosystem and increase their customer network.
The transport industry is often a new source of revenue for banks. In contrast, transport operators gain the required support from banks to enrol customers in a modern payments system provided by a technology provider, including international and local cards, QR codes or even a mobile app. O-CITY, for instance, has integrated account-based ticketing with an open loop for transport operators, making payments more transparent, safer and accessible in Johannesburg.
Transforming South Africa’s Public Transport
Mobility technology can modernise infrastructure and improve public services across South Africa, but finding the right technology is key to success. By leveraging platforms like BPC’s O-CITY, transport providers can deliver seamless, cashless payment experiences, while commuters benefit from faster, more convenient travel options.
The data-driven insights generated by these platforms also empower operators to enhance service delivery, optimise routes and streamline operations. As digital payment technologies become more integrated into daily life, South Africa is building a resilient and secure financial ecosystem that drives sustained economic growth.
Through collaboration between fintech companies, banks and payment providers, South Africa can lay the foundation for future cities with a secure public transport system designed to meet the needs of an increasingly digital world.
