The global automated fare collection market was valued at USD 4.31 billion in 2015. Automated fare collection systems are an integrated collection of different subsystems that automate ticketing of transportation networks. The industry of automated fare collection systems is anticipated to grow rapidly on account of rising demand for hassle free and efficient transportation systems.
U.S. AFC Market by System
Automated fare collections systems are used in local public transport, railways, taxi services, road charging, rental cars, airports etc. The large scale development in the public infrastructure and civil developments in the developing economies of the world have created many opportunities for products deployment. In addition, increasing regional integration between system providers and transit agencies like airports, railways and parking are also fueling automated fare collection industry growth.
The changing business condition and environment world-wide has brought affordable operation rates, reduced costs and efficient ticketing systems to transportation networks. In addition, there has been a considerable rise in the acceptance of new technology like smart card, contactless technology, and electronic payment which may further boost growth of automated fare collection industry.
Increasing focus on improving transport infrastructure, security and simplicity for the end-user will propel the industry growth in the forecast period. Though smooth revenue collection and initial high cost of installation may affect the automated fare collection systems, the overall market is expected to flourish in the forecast period.
The AFC industry segmented on the basis of technology is led by the smart card technology and in terms of market share. In the forecasted period, the NFC technology is expected to grow fastest in the AFC market, due to its growing demand in ticketing applications as it reduces cash handling and acts as e-wallets/ purse.
The hardware segment retains the largest share in the automated fare collection industry segmented on the basis of component and is expected to maintain its leading position. The increasing demand for automated fare collection systems in the European and APAC regions is expected to fuel industry growth.
In the AFC industry segmented on the basis of systems used, the Ticket vending machine segment holds the largest market share as of 2015 and is expected to maintain its position as the market leader. The Fare gate market segment is expected to grow fastest owing to its increasing demand to check fare evaders in railways, transit avenues and metro stations.
The automated fare collection industry is expected to be led by the hardware components in all the system segments in the forecast period. But the software segment is expected to grow the fastest in coming years due to a steady shift towards multi functionality and high end features.
The European market segment leads the overall AFC industry in the world segmented by regional areas and is closely followed by the North American market owing to a developed transportation infrastructure. In coming years, the Asia-Pacific market is expected to grow the fastest with the increasing demand from developing countries like China and India.
The global market is highly competitive. The major industry participants include Cubic Systems, Omron Corporation, Thales Group, Advance Cards Systems, Atos SE, Fare Logistics, LG Corporation, NXP Semiconductor, and Samsung SDS.
Partnerships and strategic merger &acquisition are anticipated to be the most effective ways for industry players to gain a competitive advantage in the emerging markets and enhance the technological capability. Also, there has been the recent trend of collaborations between the transit service providers and product manufacturers for integration of and interoperability of systems.
In February 2015, MasterCard announced strategic partnership with Cubic Transportation Systems for development of smart city solution. Aim of the solution will be to provide real-time guidance on smart-phones on the smartest way to travel, enabling flexible price-based on demand offers at and around transportation hubs or stations to alert commuters about personalized offers and rewards on the go.
In July 2015, Omron Corporation announced the acquisition of the motion control company, Delta Tau Data Systems, Inc., based in the U.S.
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