We all must have experienced, or at least seen commuters using some form of cards, or only their phones, to get access to mass transit vehicles, such as Metros. What exactly is that process, and how did the user avail the transport service without the hassle of buying tickets physically? That, friends, is the work of an Automated Fare Collection (AFC) system.
The Automated Fare Collection system consists of automatic ticket vending, ticket checking, & gate machines. It is a smartcard-based contactless back-to-back solution for payments and fare collection. Instead of paying the fare directly through cash, ticket vending machines are used, as well as through online services or other methods. The main components of the system include tickets or some other media, such as generic paper tickets or electronic tickets; ticket vending machines or online services having a variety of payment options; a connected ticket reader, which includes ticket validators, turnstiles, or other means; and the central management system.
Automated Fare Collection is a high-tech solution & exclusively designed for transport operations. Such applications require integrated & stable platforms to maintain easy flow of travelers at peak hours and gather data & transmit it to the center. The system lets passengers pay for their ride or drive either with appropriate travel products or card balance. These systems are utilized in various high-transit spots including large commercial workplaces, governmental buildings, public transportation ports, etc.
Seamless Integration the key
Key to getting the commuters on board with the technology is the compatibility and seamless operation across different platforms and services. With the introduction of 4G and the imminent launch of 5G, along with saturation in the smartphone market, which has ensured that majority of the population of a country has technology on-the-go, the system ensures that it works for all. Dubai recently introduced the ‘virtual Nol card’, which has been developed by the city’s Road and Transport Authority (RTA), which would enable virtual payment for Dubai’s metro, bus and parking services. The service will come into effect by the third quarter of 2020.
Not only this, car- and bike-sharing services have seen huge growth among the population, both young and old, which has opened new avenues for automated fare collection. Usage of techniques such as OTP (one-time password) and QR codes has meant that convenience is readily available in the hands of the commuter. Take an example on Ola ride-hailing services in India. Commuters, on confirming their ride, are provided with an OTP which they provide to the driver of the vehicle to start the ride. The service has integrated Ola Money on its mobile application, which if used, directly deducts the travel fare once the destination is reached.
A Boon for Consumers and Operators!
Automatic fare collection systems prove to be of great help to a number of parties, such as the Government, the system operators, the planning commission of the city, and most of all, the commuting population. Automated Fare Collection is not merely a technological change substituting traditional magnetic receipts with contactless smart cards. It also offers a modular, complete, and standard-based open solution that fulfills sales objectives and operational needs. An automated fare collection system is designed to transfer the undertakings via transit operators.
Commuter traffic globally is increasing by the day due to growing population, which in turn, is compelling various governments to find new means of managing public transport services. This also boosts demand for Automated Fare Collection across different countries since their respective governments spend on infrastructural developments. AFC improves efficiency and reduces maintenance & operational costs for transport operators. It opens up practical marketing opportunities and has interoperability & multi-application capabilities. Such a solution enables loyalty programs, effective targeted pricing, cross-marketing, etc. Moreover, it lowers the chances of revenue losses and fare-related frauds through safe transactions. The system ensures that buses, trains, road tolls, & retail function smoothly.
Capability of these automated systems to deliver improved future planning & management and fraud deterrence & revenues is said to drive the industry in the near future. The need for convenient & compact automated systems for daily usage will also propel market earnings. Some of the major factors driving the Automated Fare Collection market are:
The rising adoption of digital technologies with an aim to improve processing speed of transactions is expected to be a major factor for market growth.
Conventional ticket management and cash handling has increasingly become plagued with issues, as the number of commuters continues to grow. This has created a demand for the Automated Fare Collection systems around the globe.
Governments are nowadays focusing on making vast changes in their transportation infrastructure, with an aim to manage the commuter base and provide efficient services. This again makes the market attractive for competitors.
Commuters and operators both have easily acquainted themselves with these systems, with an aim to increase convenience and avoid frustrations owing to operational costs, cash leakage and waiting time, across other factors.
The Automated Fare Collection systems also help operators in making changes in their pricing for commuters, which helps them in avoiding losses. This is again a factor for the continued healthy growth for the market.
The systems to a large extent, also help in saving paper, thus conserving the environment, by means of e-tickets, thus eliminating the need for paper tickets. This factor also pushes the demand for the system.
Key companies in the global Automated Fare Collection market include Cubic Corp., Advanced Card Systems Ltd., Atos SE, Indra Sistemas SA, LECIP Holdings Corp., Omron Corp., Masabi Ltd., NXP Semiconductors N.V., Nippon Signal Co., Ltd., Siemens AG, Telexis B.V., Singapore Technologies Engineering Limited, Scheidt & Bachmann GmbH, Thales Group, Vix Technology, UL Identity Management & Security.
Mergers & acquisitions and partnerships are estimated to help players get a competitive edge. Also, collaborations between product manufacturers & transport service providers have been observed recently. Some of the recent developments that these companies have made include:
In October 2019, Cubic Corporation announced that its Cubic Transportation Systems (CTS) division and Google have signed an agreement to use Google Pay and integrate contactless transit cards for commuter convenience while paying for their journey.
In October 2019, NEORide, which consists of 13 transit systems and is located in Ohio, joined forces with Masabi to launch EZfare, a multi-app, cashless fare payment solution. 12 of the transit systems will launch EZfare in October, while one will be launched in January 2020. The EZfare tickets will also be available in Transit, a real-time journey planning app.
In January 2019, LECIP ARCONTIA, based in Sweden, launched the LV-700 validator for electronic fare collection in public transport. The system features a 5.7-inch colored touchscreen display, has high memory capacity for demanding ticket data processing and is tamper resistant. The system will enable fast and smooth cashless payments.
In December 2018, Nippon Signal announced that it had received an order for Signaling, Automatic Fare Collection and Platform Screen Door (PSD) System from Larsen & Toubro, for the Dhaka MRT Line 6 railway system, supplying the Ticket Vending Machine, Passenger Gate, Ticket Office Machine, Station Computer for the Automated Fare Collection system, among others.
In-depth report on global automated fare collection market by Grand View Research:
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