Is this "open payment" option really necessary? How many of us are really interested in paying a $2.6 fare with credit card/debit card/phones? You need to take out your wallet and your bank card every time paying a fare, mostly in front to hundreds of other strangers during rush hours, isn't it a safety issue?
The London type of oyster card is the best system I have encountered so far, with peak and off peak pricing, fare zones and daily and monthly cap. I think TTC should not only adopted fare zones, but differentiate peak and off peak pricing as well.
Yes, it is necessary just for a cost issue. OpenPayment is a global standard for tap based payment systems and by using it you can use off-the-shelf readers and off-the-shelf cards from a large number of different vendors.
Rolling your own is significantly more expensive, particularly if you want to take advantage of the paper-less receipt component (printed receipts will not exist in 5 years).
All Open Payment does is allow you to identify account X. What you do with account X, what you charge and when, is entirely up to the retailer (TTC in this case).
Rewards, price caps, passes, etc. are an implementation of the software backend. Open Payment is a standardized mechanism for identifying a customers account.
That said, phone compatibility is going to be extremely important in a few years. A physical wallet filled with cards is going to be as common in 2020 as watches are today; and it will be a generational thing just as there is an entire generation who has never worn a watch.
Vancouvers CompassCard system is an example of a wholly OpenPayment based platform. They've decided to market their own cardstock and downplay that users may use other vendor accounts to pay their bill. It's a marketing play.
London has been benchmarking the OpenPayment phone mechanisms and decided they're too slow. They need a transaction to occur in less than 500 milliseconds which current phones are not capable of BUT they are deploying a next generation Oyster reader which accepts contactless EMV bank cards. EMV stands for Europay, Mastercard, and Visa; a sub-set of OpenPayment devices we know as Paywave/Paypass.
It was supposed to be deployed by the Olympics, but they missed that deadline.