Myki operator loses contract, new fare system on the way for commuters

A major overhaul of Victoria’s public transport ticket system is set to take until 2025 to complete, meaning some travellers will need to buy and carry physical myki cards on trains, trams and buses for another two years.

The Andrews government announced on Monday that it had signed a $1.7 billion contract for US specialist Conduent to take over from current myki operator NTT Data and run the system for the next 15 years.

Public Transport Minister Ben Carroll said Conduent would upgrade myki so all passengers could travel using just a bank card or smartphone with a digital wallet, rather than needing to buy a myki card and load it with funds. This has been possible in London since 2012 and in Sydney since 2018.

“This is a real steep change for Melburnians and indeed Victorians,” Carroll said. “We will now reach the 21st century, with an account-based ticketing system which is simpler and easier to use through your credit card, through your smartphone, through your smartwatch.”

Passengers have been able to use an Android smartphone as a myki card since 2021, but the system has never been equipped to handle iPhones. However, myki cards can now be instantly topped up using an iPhone and the Public Transport Victoria app.

New Jersey-based Conduent is one of the world’s leading transport ticket operators, running about 400 ticketing systems globally, including in Adelaide, Montreal and Paris. It was part of the consortium Victoria contracted in 2005 to develop the original myki system.

Conduent will take over from NTT on December 1. Carroll said upgraded technology would be trialled next year and rolled out more broadly in 2025, with some ticket readers needing to be upgraded and others replaced. “It is important that we take our time and get it right,” he said.

Public Transport Users Association spokesman Daniel Bowen said enabling bank card and smartphone payments was long overdue and would remove a major obstacle to using Victoria’s train, tram and bus network.

“What is really important is that the new operator makes sure the transition is a smooth one,” Bowen said. “Melbourne’s got a history of different ticketing systems, and they’ve all been problematic when they’ve been introduced. The hope would be that this will be different.”

Contactless bank card travel will overcome other shortcomings with myki, including the $6 cost of smartcards, which expire after four years, and the inability to buy or top them up on trams or buses.

Opposition public transport spokesman Richard Riordan said he welcomed Victoria getting a 21st-century ticketing system. But he held “great concerns” about its rollout, he said, after the disastrous introduction of myki under the Brumby government.

“We’ve heard this from a Labor government in the past, that they know how to roll out a modern ticketing system,” Riordan said. “That didn’t work so well last time.”

Carroll said regional Victoria would be prioritised in the trial and rollout, given parts of the V/Line train and bus network were still using paper tickets, while physical smartcards will remain available. The new cloud-based system will also have more flexibility to easily adjust ticket prices across transport modes or ahead of major events, he said.

“Account-based” ticket systems can also be set up to charge passengers the lowest fare possible based on their travel patterns, rather than them having to buy discounted weekly or monthly passes in advance, as myki users do.

The Age previously revealed that Conduent, incumbent NTT and the world’s biggest ticketing system provider, Cubic, were the three final bidders vying for the contract in the government’s two-year tender process.

The introduction of myki a decade ago to replace Metcards was plagued by delays, cost overruns and technical faults.

Japanese group NTT took over the company Victoria commissioned to develop myki, Kamco, in 2010, and won a seven-year, $700 million contract extension in 2016 after promising to improve it.

Carroll said that while myki was built from scratch, Conduent’s system had already been tried and tested elsewhere in the world and also offered “very good value for money”.

Credit: Matt Golding

Cubic was considered a frontrunner in the tender, given it pioneered contactless bank card and smartphone payments and runs some of the world’s biggest transport systems, including in Sydney, London and New York.

However, Cubic was also considered a more expensive choice for Victoria and less willing to reuse existing ticket readers and other infrastructure.

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