So, to take advantage of ticket-free travel I have to get a PAYG card but from the bank rather than the train/bus company.
Yes. The transport operator could even partner with a bank to promote one.
Sometimes there will be very good reasons to not want to use a contactless card. For examle, I have a personal contactless card, a company credit card and an Oyster card for when I travel to London for work. This works quite well for me as I can use my work credit card to top up my Oyster card. I cannot use it to top up a PAYG payment card (they are cash blocked). So I would either have to pay with my own card and claim back, or pay cash fares.
Or your employer could join the 21st century and give you a contactless work credit card, like mine. Then you just use that to travel on business. No Oyster needed. If you need a receipt, register it against an account and print one out.
So we end up with *another* card that isn't a smart card...
Much easier to just use smart cards - after all, they have just about gotten past the teething stages with ITSO.
No, not much easier, much more expensive. The smartcard is a stopgap - it is only needed because every bus, train and barrier can't be online. Give it 5 years and it will be viable that they are - then who needs anything more than a simple identifier?
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I don't see banks allowing other companies to write additional information onto the payment card. If you have any good ideas then I'm sure they'd like to know about them.
You don't write it onto the payment card, you store it on the back-end. But even if that isn't viable, you don't need a smartcard. You just need an identifier (simple RFID) with a payment card tagged to it in the back-end.