In 2025, the Armenian capital of Yerevan completed one of its most significant smart city transformations: the full transition of public transport to a unified, cashless payment system. Covering buses, trolleybuses, and the metro, the initiative eliminated cash payments and introduced a modern, multi-channel digital payment experience.
The project was commissioned by Yerevan Municipality and fully implemented by Telcell, which acted as the provider responsible for the system’s design, financing, and citywide deployment without using municipal budget funds. The project has redefined urban mobility payments in Yerevan and set a new benchmark for smart city payment solutions in the region. However, the transformation was not without challenges, and the copy will be all about how Telcell solved all those roadblocks.
Fragmented And Cash-based Payments
For years, Yerevan’s public transport relied on fragmented cash transactions, manual fare collection, and disconnected ticketing mechanisms. Passengers paid drivers directly, with different fares for buses and trolleybuses, bought physical tokens in the metro, and often faced queues, delays, and an inconsistent payment experience across transport modes.
This fragmented payment environment limited transparency, slowed boarding, and restricted the city’s ability to introduce scalable, data-driven smart city services. A unified digital payment solution was required to modernise urban mobility.
The Solution: A Unified ‘Smart City Payment Platform’
Following an international open tender announced in 2021, Telcell was selected as the project implementer and signed a five-year contract with Yerevan Municipality in January 2023. The scope of work, in terms of implementing the “Smart City Payment Platform,” covered tasks like making the solution accessible at all buses, trolleybuses, and metro stations, along with the installation of validators, scanners, and modern access gates and the replacement of metro tokens with QR- and card-based validation.
As of 1st February 2025, cash payments in Yerevan public transport were fully discontinued, completing the citywide rollout of the smart payment system. The project introduced a single, integrated cashless payment system providing all forms of public transport with multiple payment methods such as digital QR tickets via mobile application, transport cards and bank cards.
Telcell assumed responsibility for the technical implementation and operation of the payment platform, ensuring interoperability, security, and scalability across the city.
Investment And Financial Model
The smart payment solution is financed entirely by Telcell, with investments reaching more than AMD 1.5 billion to date. No municipal funds were used. The investment covered payment infrastructure and equipment, along with software platforms, system maintenance, and banking acquiring and transaction processing costs.
All fare revenue is transferred in full to the municipal budget. At the end of the contract term in 2028, the complete payment system will be transferred to the Yerevan Municipality at no cost.
Passenger Experience And Public Impact
For passengers, the new payment system delivers a faster, simpler, and more accessible experience. Payments are being completed with a single scan, queues are reduced, and boarding times are shortened.
“Telcell does not charge commissions on ticket payments. All collected fares are transferred in full to the municipality, while Telcell independently covers all operational and transaction-related costs. This transparent payment model has been essential in building public trust and ensuring long-term sustainability,” the company told Blobal Business Outlook
Strategic Significance
Beyond transport, the project represents a foundational smart city payment layer for Yerevan. By embedding fintech infrastructure into everyday public services, the Armenian capital city accelerated cashless adoption and strengthened digital inclusion for its citizens.
For Telcell, the initiative aligns with a long-term strategy to demonstrate how modern payment technologies can deliver public value at scale.
Fare Management
The transition to digital payments also enables more flexible and precise fare management. Unlike cash-based systems, which require rounding to fixed denominations, a digital payment environment allows fares to be adjusted gradually and precisely, without being limited to predefined amounts. This creates a more adaptable and sustainable framework for long-term tariff planning, while preserving transparency and convenience for passengers.
The initiative, apart from providing citywide, fully cashless public transport payments, also resulted in the creation of a unified platform supporting multiple payment instruments. Most importantly, the whole implementation was privately financed, putting zero burden on Yerevan’s public budgets. Also, the platform has been designed for long-term public ownership.
By implementing a unified smart payment platform for public transport, Telcell transformed a traditionally cash-based urban service into a fully digital, scalable payment ecosystem, highlighting how payment innovation can act as a foundational layer for smart city transformation.