Updated fare system to bring Victoria into 21st century

Victoria's public transport ticketing system will move into the 21st century, with commuters soon able to tap on and off with iPhones and bank cards.

Conduant has been announced as the winning bidder for the state's next public transport ticketing contract, beating out myki's current Japanese operator NTT Data and fellow US outfit Cubic.

The American public transport ticketing specialist will upgrade the trouble-plagued myki system to take credit and debit cards, all smartphones and smartwatches.

Trials of the "cloud-based" system will begin in 2024, with the new technology to be rolled out more broadly the following year.

All train, tram and bus services across the state will be covered, but physical myki cards will remain functional after the two-year transition.

Public Transport Minister Ben Carroll said the announcement was an important moment for Victoria after 16 years of a card-based ticketing system.

"We will now reach the 21st century with account-based ticketing (that's) simpler and more easier to use through your credit card, through your smartphone and through your smartwatch," he said on Monday.

"This is a real step change for Melburnians and indeed Victorians. The benefit now in 2023 is that you can do off-the-shelf products that have had testing and had the bugs ironed out."

The contract is worth $1.7 billion over 15 years and Mr Carroll confirmed it contains performance clauses.

Conduant will take over from NTT Data on December 1 after the current ticketing contract expires.

Regional Victoria will be included in trials of the new system but locations are yet to be determined.

Some ticket readers will be replaced but the Victorian government intends to retain the myki name despite its troubled past.

"Myki does have a strong brand awareness," Mr Carroll said.

Opposition public transport spokesman Richard Riordan was bemused by the two-year transition timeline, given Conduent's "off-the-shelf" platform is already used in cities such as Paris, Dubai and Montreal.

"It must clearly come from a very high shelf," he said.

The myki system began to be rolled out in 2007 but was beset with million-dollar cost blowouts and system issues.

It did not become fully operational until 2012, when it replaced the Metcard system.

NTT Data took over from myki's initial contracted developer Kamco in 2010 and was awarded a $700 million, seven-year contract extension in 2017.

Visitors to Melbourne must buy a myki card - $6 for adults or $3 for concession, children and seniors - and add funds to it, unlike Sydney's Opal cards which have no attached purchase fee.

Android phone users have been able to tap on to the system since 2019 but iPhones and bank cards still cannot be used despite the state government setting aside $1m in 2019 to find a solution.

Train commuters in major cities such as Sydney, London and Singapore can use their credit and debit cards to tap on and off and Brisbane is implementing similar technology.