Tuesday, May 02, 2006

Transport for Oyster drops expansion plans

FT.com reports that Transport for London has abandoned initial expansion plans for its pre-pay Oyster card after failing to agree terms with a financial partner:
The transport agency had hoped to roll out a service this year that would have enabled passengers to use their Oyster cards - currently used on the London Underground, buses, and some trains - to buy low-value goods such as newspapers, coffee and sandwiches with "electronic money" that would be loaded on to the card in advance.

Apparently it's not the question if the consumer would like the product. The real dealbreaker exists on the merchant side. The price positioning of the product between credit-card and cash is the real problem. Once again an indication that regulators should not conveniently overlook the pricing of cash as the most important public policy item for the coming years.

So much for al the nonsense EU-reports of techie-stuff or lack of demand or lack of competition that stiffles innovation in payments. If politicans are unwilling to stop the sponsoring of cash, they should not complain about low innovation in payments. It's not so easy to compete against a mispriced competitive product.