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September 2018
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e-ticketing for public transport

Commuters around the world have been waiting for “paperless” tickets for some time now, says John Elliott, Head of Public Sector Practice at Consult Hyperion. But there are still some important lessons to be learnt from the international trials held to date

Several different technologies are emerging to support paperless ticketing, but one of the best known is Near Field Communications (NFC), a short-range high frequency wireless communication technology that enables the exchange of data between devices. “Contactless tickets” make use of smart card technology using radio waves (rather than physical contacts) to communicate with the chip inside the card. As such, these electronic tickets – also known as e-tickets – can be used to help reduce the production and distribution costs connected with traditional paper-based ticketing channels, and can also increase customer convenience by providing new, secure and simpler ways to purchase tickets.

Benefits of e-ticketing

Clearly, transport is a sector where this kind of technology can make a huge and positive difference, bringing down journey times while increasing capacity, comfort and convenience. The required technology is already out there, and governments worldwide are increasingly keen to see it used not only to help passengers, but also to reduce congestion, pollution, improve the local environment, and help plan more effective local transport systems.

Some of the other common benefits cited by national transit operators who are currently trialing these schemes are:
Operational cost reductions – By allowing contactless payment smart cards (EMV) to be accepted or using NFC-enabled mobile phones.

Reduce cash-handling costs – the cost of collecting, transporting and securing cash is high. By minimising the use of cash, there is also a reduction in the risk of theft.

Additional revenue streams – new technologies allow operators to consider new services and also to increase overall patronage, leading to higher revenue.

Standardisation- by moving towards globally standardised solutions, there will be more equipment vendors to source devices from and so more competition will be fostered in the market.

Customer convenience – as we move to having more everyday applications on mobile phones, there is significant interest in having ticketing products on NFC-enabled mobile phones.

Recent developments

NFC mobile phones have now emerged, and these have the ability to act as both smart cards and smart card readers. This means that, in the near future, the phones in people’s pockets will be able to store transit e-tickets that can be read simply by tapping them on a reader. If this sounds slightly futuristic, it’s not; Sony Ericsson has already claimed that all of its handsets will soon support NFC.

Additionally, international payment organisations like MasterCard and Visa are writing specifications to allow their chip and PIN cards to work contactlessly and then bill the transit journeys directly to the credit card statement. The many trials of NFC payment across the globe have shown that it is popular with the users and fit for purpose as both a payment instrument as well as a transit ticket holder. NFC is already widely used in Asia, for example, with schemes like T-Cash in Korea and Suica in Japan.

Barriers to adoption

Although national e-ticketing schemes are currently being trialled around the world, none of them are fully interoperable at the technology level. Therefore, large international suppliers of the equipment needed for this kind of solution simply cannot see the point of developing it for small national markets. As a result, competition has not emerged to drive prices down, and so the costs of such elements are destined to remain artificially high for relatively small markets like The Netherlands or the UK.

Cost remains an issue for transport operators, and the benefits from this kind of investment will ultimately fall to a number of different parties, with some savings falling to local government (such as more accurate reimbursement of concessionary travel), and others going to bus operators, passengers and the public. Returns will be high, although the large wins are contingent upon a full, interoperable, inter-modal infrastructure being in place and widespread take-up by passengers. Plus, increased passenger numbers will depend on each country’s public transport operators developing fare strategies to make use of interoperable ticketing enabled by smart cards.

Looking to the future

Although we may need to wait a bit longer for a fully-functioning, fully-interoperable national e-ticketing scheme, there have already been several significant urban e-ticketing success stories based on e-ticketing technologies, such as the Oyster card in London, the MoBIB scheme in Brussels, or the Octopus card in Hong Kong. From a customer point of view, these schemes are extremely attractive: no need to tender cash; discounted fares; multi-modal journeys, and so on. As such, an appetite for this kind of solution remains.

After all, the benefits of e-ticketing for transport are well documented, and as new technology becomes more established, tickets will be loaded onto mobile phones instead of smart cards, allowing people to buy their ticket over the air, check timetables and real time travel information and view their stored tickets all on their phone. The list of possibilities for this kind of technology is endless, which is why governments around the world not only want to promote the spread of smart and integrated ticketing, but also want to fully understand what barriers may currently be preventing its more rapid adoption, so that they can continue to build on this strategic vision and instead move towards a reality that will benefit everyone.

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