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NYC Transit Systems Set to Kill Cash by 2020

OMNYBanks are scrambling to update their credit and debit cards now that New York City’s subway and bus systems are set to go contactless by 2020. The commuting systems, which serve thousands of metropolitans every day, will ditch cash purchases and MetroCards, as they start relying on contactless cards next year.

This comes more than 20 years after the first MetroCards made tokens obsolete. But in the ever-evolving digital age, tap-to-pay options have become an increasingly desirable option among businesses and consumers — and commuters — alike. It’s estimated that digital urban expansion has outpaced population increase by nearly 200% and more than 80 of the top 100 retailers in the U.S. already utilize tap-to-pay options.

The new system developed by the Metropolitan Transportation Authority is called OMNY, which stands for One Metro New York. The MTA reportedly got the idea from the prefix “omni,” meaning “of all things.” And the new card system will certainly be all-encompassing as it phases out the decades-old MetroCard starting on May 31.

According to the MTA, all New York City-based commuters will be able to use OMNY by the end of 2020 if the pilot programs take off.

But how does it work?

Recent reports claim that OMNY relies on contactless bank cards or smart devices outfitted with a digital wallet system. Some popular options are Samsung Pass and Apple Pay. Just like these digital wallets can be used at the kiosks of your favorite retailers, these functions will also work to pay your bus fare at near-field communication systems.

According to Curbed, these payments accrued throughout the day will bundle into a daily charge, which will be posted to the commuter’s bank statements.

“Mass transit is a really terrific use case for tap and pay — people commute 10 times a week,” notes Visa CEO Al Kelly. “It gets them in the habit of using the card to tap and go.”

And people are already getting in the habit of using this kind of currency. A recent report by CNBC notes that around three in every 10 Americans never make cash purchases in a typical week. According to the PEW Research center, this number is up from 25% of consumers in 2015.

This isn’t the first time New York City has led the charge on efficient products. In fact, the Empire State Building managed saved more than $2.4 million within its first year after installing smart windows as a part of its makeover a few years back.

With the help of OMNY, Visa estimates that banks could make more than $2.4 billion in profits when they implement contactless cards. Reports claim that JP Morgan has already shelled out more than 20 million contactless cards this year alone.

It only makes sense that New York City would be the first location to launch this helpful tool. In fact, subway tiles were only used for the first time back in the early 1900s in New York City before spreading to other areas.

For now, the OMNY system will only rely on contactless cards and current digital wallet apps as their primary methods of payment. For riders who like to keep their phones in their pocket, however, there is an MTA-issued OMNY card expected to be released in 2021. Until these cards are released, commuters can still rely on their MetroCards if they don’t like the digital options.

On May 31, subway riders can enjoy OMNY in 16 subway stations along the 4, 5, and 6 lines through Manhattan and Brooklyn.