Automated Fare Collection Market Size, Share & Trends Analysis Report By System (TVM, TOM), By Technology (Smart Card, NFC), By Application, By Component (Hardware, Software), And Segment Forecasts, 2019 - 2025

Industry Insights

The global automated fare collection market size was valued at USD 8.15 billion in 2018 and is projected to expand at a CAGR of 13.6% from 2019 to 2025. AFC systems comprise automatic ticket vending machines, card recharge terminals, gate machines, and ticket checking machines. Rising demand for hassle-free and efficient transportation systems is expected to be one of the key factors driving the market.

Increasing usage of plastic money, real-time payments, and digital payment gateways, such as debit card, credit card, and Near Field Communication (NFC) payment applications are also anticipated to drive market growth over the forecast period. These systems are rapidly replacing traditional ticketing systems due to their benefits, such as better process management, revenue generation, financial fraud prevention, and superior system planning.

They enable operators to improve the transaction rate and processing efficiency of the overall fare collection process, thereby minimizing waiting time and eliminating the need for physical currency management. Automated fare collection systems can be seen in a number of high transit areas including commercial workplaces, government buildings, parking places, amusement and entertainment parks, toll collection centers on highways, and public transport stations.

Rapid public infrastructure developments in developing economies across the world have created many opportunities for the market. In addition, increasing regional integration between system providers and transit agencies, such as airports, railways, and parking lots, is also fueling the market growth. Wide usage of wireless networks, smartphones, and contactless technology for digital transactions along with flexible fare plans offered by these systems is expected to boost the market growth.

They also provide enhanced transaction security as well as effective management of funds collected by the transportation service providers. However, high installation and maintenance costs may hinder market growth, especially in developing economies. AFC systems also act as foundation for the deployment of an integrated ticketing solution. Integrated ticketing enables commuters to travel using multiple transport modes, such as buses, railways, and subways, with a single ticket that is valid for the entire journey.

Various governments are deploying integrated ticketing solutions to simplify switching between multiple modes of transportation and to encourage commuters to use public transport services more often. For instance, in the U.K., the Oyster card was introduced as an electronic ticket for use in public transport in London, by Transport for London (TfL). The card is can be used in London Buses, London Underground, London Overground, the Docklands Light Railway (DLR), Tramlink, some river boat services, and majority of the National Rail services within the London fare zones.

Component Insights

On the basis of component, the market has been segmented into hardware and software. Hardware segment led the market in 2018 owing to increased number of deployments of new AFC systems by governments across the globe for providing superior public transportation services. These systems typically consist of a Central Computer System (CCS), Station Computer System (SCS), and Station Equipment.

CCS, the management center, receives ticketing data from station computers, generates periodic reports, and controls operations of single or multiple station computer systems. SCS enables operators to feed fare-related parameters to the AFC station equipment and also allows remote monitoring and control of the station equipment. Station equipment are the front-end devices used to serve the commuter.

Examples include fare gates, Ticket Vending Machines (TVM), mobile and hand-held terminals, ticket recharging machines, and booking office machines. Rising demand for automation is anticipated to drive the demand for AFC systems globally. These tools can significantly improve customer engagement and service capability of transportation systems while also bringing down their overall operating costs.

Technology Insights

On the basis of technology, the market has been classified into smart card, magnetic stripe, Near Field Communication (NFC), and Optical Character Recognition (OCR). Smart card technology was the dominance segment in 2018 and is expected to continue the trend over the forecast period due to its enhanced operating flexibility and faster processing speed than magnetic stripe cards.

Smart cards allow fare integration across several transportation modes and enable service providers to process differentiated distance- and time-based fare structures. Magnetic stripe technology-based tickets were the preferred form of ticketing in the 1970s and 1980s. However, this technology has been gradually replaced by smart cards.

The NFC segment is expected to witness the highest CAGR from 2019 to 2025 due to rising consumer preference for cashless fare collection system for various modes of public transportation. Moreover, promising development of rail and road transport infrastructure in emerging regions like Asia Pacific is also likely to augment the segment growth.

System Insights

Based on system, the market is segmented into Ticket Vending Machine (TVM), Ticket Office Machine (TOM), fare gates, and IC cards. The added reliability and accuracy of operations carried out by autonomous machines, such as TVM, TOM, fare gates, and IC cards, reduce the possibility of errors and offer better transaction security than traditional methods. Due to these factors, various governments are investing in deploying TVMs, TOMs, and automated fare gates across high transit areas. The TVM segment held the largest market share in 2018 and is expected to retain its dominance over the forecast period.

Rising number of deployments of TVMs on railway and metro stations, subways, and local bus transit networks is expected to drive the segment. The fare gate segment is expected to register the highest CAGR of 14.7% during the forecast period owing to increasing usage of fare gates in checking fare evaders in railways, transit avenues, and metro stations. As fare gates eliminate the need for manual operations, their demand is likely to rise in the rapidly expanding public transit networks in emerging economies of regions, such as Asia Pacific.

Application Insights

Based on application, the market has been classified into railways & transportation, parking, entertainment, and others. Railways & transportation accounted for the major market share in 2018 and is anticipated to emerge as the fastest-growing segment over the forecast period. This growth can be attributed to the rapidly expanding railway infrastructure, highway networks, and development of expressways across a number of countries.

Electronic Toll Collection (ETC) systems - the specialized AFC systems used on highways for toll collection - form an indispensable component of smart transportation projects. These systems help government agencies and transit system operators in reducing vehicle congestion and improving the overall traffic flow on key transit routes. These systems are expected to have a widespread adoption owing to their contactless transaction processing capability and increasing number of deployments at highway toll collection centers.

Moreover, they also transmit transaction information to the vehicle owner’s mobile phone through the Global System for Mobile Communications (GSM) modem technology. ETC systems utilize the Dedicated Short Range Communication (DSRC) technology for automatic toll tax payment. Radio-Frequency Identification (RFID)-based authentication systems consisting of RFID cards and readers are rapidly gaining popularity due to their low costs and ease of operation.

Regional Insights

North America led the global market in 2018 and will continue the dominance over the forecast years owing to quick adoption of emerging technologies in this region. Factors, such as rising tech-savvy population, improved internet and communication network infrastructures, and high number of smartphone users, also remained instrumental in facilitating widespread deployment and usage of AFC systems in the region over the years. Moreover, presence of leading AFC system integrators and manufacturers that are steadily working on the development and deployment of the latest solutions will boost the region’s growth.

The Asia Pacific regional market is experiencing a surge in the demand for AFC systems. This can be primarily attributed to the rising investments from governments of emerging economies aimed at the development of railway infrastructure, expansion of highway network, and metro projects to facilitate inter-city and intra-city travel. The growing digital payment infrastructure and higher smartphone penetration in the region are anticipated to offer lucrative growth opportunities for key industry players in the upcoming years. However, Asia Pacific is projected to register the highest CAGR of 17.1% from 2019 to 2025.

Automated Fare Collection Market Share Insights

Key companies in the market include Advanced Card Systems Ltd., Cubic Corporation, Atos SE, GMV, Indra Sistemas SA, LECIP Holdings Corporation, LG CNS, Masabi Ltd., Omron Corporation, Nippon Signal Co., Ltd., NXP Semiconductors N.V., Samsung SDS Co. Ltd., Scheidt & Bachmann GmbH, Siemens AG, Telexis B.V., Singapore Technologies Engineering Limited, Trapeze Group, Thales Group, UL Identity Management & Security, Vix Technology, and Thales Group.

The market is consolidated due to acquisition of smaller firms by the prominent companies. Leading companies are also focusing on M&A and establishing partnerships and collaborations to expand business operations in emerging markets of Asia Pacific and Europe. For instance, in 2018, Cubic Corp. entered into an alliance and investment agreement with Delerrok Inc., a leading provider of cloud-based electronic fare collection solution for small- and medium-sized transit operators.

According to the agreement, Cubic Corp. will leverage Delerrok Inc.’s TouchPass solution with their Transit Management as a Service (TMaaS) platform to offer a cost-effective and comprehensive real-time information and payment solution. Cubic Corporation’s TMaaS platform combined with Delerrok Inc. Software-as-a-Service (SaaS) model is ideal for transit operators looking to deploy real-time information, electronic ticketing, and mobile experiences.

Report Scope

Segments Covered in the Report

This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2019 to 2025. For the purpose of this study, Grand View Research has segmented the global Automated Fare Collection market report on the basis of component, technology, system, application, and region:

• Component Outlook (Revenue, USD Million, 2014 - 2025)

  • Hardware

  • Software

• Technology Outlook (Revenue, USD Million, 2014 - 2025)

  • Smart Card

  • Magnetic Stripe

  • Near Field Communication (NFC)

  • Optical Character Recognition (OCR)

• System Outlook (Revenue, USD Million, 2014 - 2025)

  • Ticket Vending Machine (TVM)

  • Ticket Office Machine (TOM)

  • Fare Gates

  • IC Cards

• Application Outlook (Revenue, USD Million, 2014 - 2025)

  • Railways & Transportation

  • Parking

  • Entertainment

  • Others

• Regional Outlook (Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

  • Europe

    • France

    • Germany

    • Poland

    • Russia

    • The U.K.

  • Asia Pacific

    • Australia

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • Saudi Arabia

    • UAE