A massive move towards MaaS

Mass transit payment, often called automated fare collection, is undergoing essential changes: we are moving from ticket based systems to account based systems, on a global scale. In the past, a public transport operator was issuing its own tickets or cards (or even tokens), customers were prepaying them and the transit operator was canceling the tickets for each ride. This was strict and simple, and passengers were not proposed any other option.

Now, mass transit operators and local government authorities want to evolve to MaaS, Mobility as a Service, and propose an always improved service to commuters and occasional riders including multiple payment options. Consequently, these options are generally managed on large servers that can accommodate all the specificities of the mass transit fare schemes and tickets, cards or other payment means essentially become an identity media.

The public transport industry is at the same time extremely conservative, as it is running either at very thin margins, or even at deficit, and investments in payment systems are huge. At the same time as local authorities are involved in mass transit, they see it as a means to show what they do for citizens and to demonstrate they are always more innovative.

The secure transactions industry, along with corporations specializing in automated fare collection, are always more creative and more competitive when it comes to proposing new payment solutions.

Maturity varies greatly according to regions of the world. In the Netherlands, the OV-chipkaart, which has been introduced in 2005, is valid for all public transport. In Hong Kong, the first Octopus card had been launched as early as 1997 and has become a universal means of payment not only for all public transport in the territory but also for purchases in shops, kiosks, vending machines, etc. Meanwhile, the California Department of Transportation is starting in 2022 to consider integrating different means of payments across transport networks within the state; they will simultaneously introduce open loop.

Probably the most significant change over the last few years is the inception of open loop, the direct use of banking cards or NFC wallets to pay for transit fares. The topic is way more complex than it seems at first sight as there is the need to combine different journey legs, to accrue different trips to apply daily, weekly or monthly caps, to support different fare structures according to different operators and transit agencies, to apply discounts for youngsters, elderly, jobless people, etc.

Open loop is becoming a world standard. While London was the pioneer in 2012, open loop is now adopted by many networks across the world making the life of transit passengers way easier. Open loop is adopted in Brussels, Delhi, Dijon, Kiev, Manchester, Milan, Minsk, Moscow, Osaka, Singapore, Sydney, Turin, … among many others. New projects are permanently announced, with Bangkok, Berlin, California, Helsinki, Hong Kong (some bus operators), New York and Sofia launched in the last few months.

While open loop expands, many mass transit operators are explicitly stating they are keeping their own closed-loop system in parallel. Transport for London (TfL) made it clear that they are keeping their closed-loop Oyster card to accommodate riders without bank cards or those who don’t want to use them. Moscow is even expanding the use of its Troika system thanks to a joint venture with Sberbank, giving SberTroika, that will gain acceptance across Russia in the form of a card or a smartphone app.

Several other trends are present in the world of transport. Facial recognition has its supporters: after trials in China, Moscow has adopted facial recognition as an identification means for its server-based closed-loop payment system. And while the rest of the world focuses on fare collection at gates, researchers at the Korea Railroad Research Institute (KRRI), are developing a gate-free system that will allow passengers to pay their fares while just stepping on identified spots on the floor. These spots are equipped with antennas that recognize smartphone apps or smart tokens carried by the passenger and are able to charge the appropriate fare.

The world of mass transit payment is on a constructive evolution path towards MaaS. Government agencies and operators alike work to increase ridership while offering more flexibility by multiplying their payment methods offer.

Photos: © Thierry Spanjaard