CashCard issuer Nets is likely to be the first competitor to the ez-link card, issued by a company owned by the Land Transport Authority (LTA).

Nets, set up in 1985 by local banks to facilitate cashless transactions, is working on a new card for this purpose.

Right now the two cards are used in separate markets: ez-link cards on trains and buses and Nets' CashCards for Electronic Road Pricing (ERP) charges.

Both also can be used for some retail transactions, but in the transit sector they do not compete directly.

Nets CashCard vice-president Yvonne Fong told The Straits Times that the Nets transit card would be different from what is already on the market.

'For example, we can develop and offer more ways of using CashCard as a payment mode, as an ATM card and for payments through mobile phones,' she said.

EZ-Link, the LTA-owned firm that has been issuing ez-link cards since 2002, is not sitting still.

The Straits Times understands that it will launch a new multi-use card by the end of this year. For starters, motorists will be able to use the new ez-link card instead of the CashCard for ERP payments.

It could also have basic banking features - ATM withdrawals, for instance - as well as the capability to be a credit card.

Before the new cards are rolled out, card readers on buses and in MRT stations will be modified to enable them to read a wider range of cards.

Secondary 1 students have been told to extend the validity of their primary school travel concession cards as a stop-gap measure until the new cards are launched.

Asked for comments, the LTA would say only that it is working on a new smart card which conforms to new, Singapore-wide standards that allow such cards to be used across several sectors, from transit to retail and banking.

For consumers, the changes expected in the coming year could mean that they will need only one card for a range of transactions.

Observers reckon that when the Government opens up the transit card market to competition, Nets will benefit more than EZ-Link.

This is because usage of Nets' CashCard is expected to shrink in a few months' time, when motorists can opt to pay ERP charges through their monthly credit-card bills.

ERP has been a boon for the CashCard. Non-ERP transactions - largely retail - make up less than 10 per cent of the 200 million or more CashCard transactions a year.

EZ-Link has been trying to increase usage of its cards as well. It has been eyeing the taxi fare market, worth $3 billion a year.

It approached operators to offer its touch-and-go payment system to cab commuters a couple of years ago.

The plan was said to have been put on hold because LTA was on the verge of divesting EZ-Link late last year. The authority has since decided to hold on to the subsidiary because of sweeping public-transport reforms the Government is rolling out, The Straits Times understands.

'It's felt that with so many changes ahead, especially in public transport, having control of a transit-card company is important. You can get things done more easily,' a source close to EZ-Link said.

The competition may not just be a two-cornered fight.

Credit-card companies are also said to be eyeing the $1.2 billion a year bus and train fare market, which is expected to more than double by 2020.

christan@sph.com.sg