More countries should adopt the random checking model used in Germany: sometimes ticket inspectors board the train and check everyone's tickets. If you don't have one you get fined on the spot. It saves a lot of expensive and annoying ticket gates.
Two systems in London have this (trams in south London, the DLR in east London) so Transport for London can probably make a good guess at the costs of each method.
Here it's paper tickets by default. There is one primary kind of ticket which you have to stamp at your origin point and it entitles you to move away from that point, anywhere in the city, for the next 2 hours.
The value of having just one kind of ticket (for most uses) with a fixed price is surprisingly high, since you can even pre-purchase a bunch of them if you're an occasional rider. Then riding on the train without a card is: get ticket from wallet, stamp it, wait for train, get on train. The stamping machine doesn't seem very expensively complicated, though it does know the current time to within 15 minutes.
Subscription tickets (monthly fee, unlimited travel) are RFID cards and ticket controllers have suitable readers. Obviously most travelers are ones who travel often and therefore bought subscription tickets, and few stamping machines are needed, for the occasional travelers who didn't. The process is: go to train platform, wait for next train, get on train.
They don't do credit card taps here probably because German people are resistant to electronic tracking of people's movement (you know, after that big thing the government did some time ago). If they did, they'd probably have a place to tap your card in each station to validate it for the next 2 hours, same as a paper ticket, and then the ticket controller's handheld scanner would check where it was last tapped.
For the Croydon Tramlink (the only trams in London) they're not gates, but pillars on the platform. Always open gates would've been an improvement. There's no space for that at many of the stops though, so I get why they've picked the option they have.
