After the failure of the scratch ticket experiment, the replacement of the Cain/Kirner State Government at the 1992 election by the Kennett ministry created an opportunity for another attempt to create a comprehensive new public transport ticketing system. The key difference from the scratch ticket debacle was that the Kennett government had decided ticketing was not a core activity of the Public Transport Authority. Instead, it had decided to outsource the provision and operation of public transport ticketing.
Therefore, in 1992 the State Government issued a tender for a new ticketing system to cover metropolitan trams, trains and buses, selecting the Onelink consortium in September 1993. The partners in the consortium were ERG Australia, Fujitsu Australia, Mayne Nickless (Armaguard) and the National Australia Bank.
A key objective of the new Metcard system was to eliminate the requirement for tram conductors, producing the saving that had been anticipated throught the previous State Governments scratch ticket initiative. Additionally, there was a desire to eliminate ticket-selling staff at the majority of railway stations.
The Metcard system was based on magnetic strip card tickets issued primarily by ticket machines, although they were also available from staffed railway stations and retail outlets such as newsagents. Trams and buses were fitted with on-vehicle ticket validators which printed on the validated ticket a line stating the first use of the ticket, allowing for manual ticket inspection without expensive hand held readers. The ticketing continued Melbournes unique multi-zonal multi-ride fare structure, usable across all vehicle types tram, train and bus.
Additionally, trams were fitted with coin-operated ticket machines, allowing for on-board purchase of two-hour tickets. The Kennett Government had decided that passengers would mostly use pre-paid tickets, attracting considerable criticism for not providing for the on-board purchase of the popular daily tickets. This decision was later reversed, modifications to tram ticketing machines being made in 2001. The Metcard system design also required passengers to validate their tickets at the beginning of every journey on each transport mode, initially for statistical purposes.
Regrettably, the original target for introduction of the Metcard system was not achieved, as evidenced by threats of penalty action in 1995 by the State Government against the Onelink consortium regarding late delivery. Of the many causes for this delay, two stand out:
Metcard was initially rolled out on Camberwell Depot services from September 1996. There were teething difficulties experienced with implementation of the system, although these were eventually resolved. The remaining depots followed between February and May 1998, the last Melbourne tram conductor finishing on the evening of 23-24 May 1998.
However, the failure of the scratch ticket implementation had made the Melbourne public cynical towards new ticketing systems. Reception of the new Metcard was not positive, and fare evasion rates increased substantially.
 The remaining government bus operations were also privatised. Note, however, the financial arrangements for franchising Metcard sales for private bus operators were substantially different than those that applied for rail and tram operators.