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How Much Does an NFC Transportation Deployment Cost?

Posted By RFID Journal, 06.02.2015

What is the estimated expense of implementing Near Field Communication (NFC) technology for transportation? Just a ballpark estimate would be great.

—Name withheld


This is a very difficult question for me to answer, but I will make a guestimate and allow our readers who sell components of such a solution to chime in below.

Passive NFC reader modules are not very expensive. I estimate that they would cost you around $100 per vehicle or turnstile. For vehicles, you will need to decide how data will be transmitted from the passive NFC reader to your back-end system. Will the reader send information in near-real time? If that's the case, you will require a cellular device that takes data from the reader and forwards it to a back-end server. That will add $300 or more to the price. You will also need to pay for installation within the vehicle. A ballpark estimate might be $1,000 per vehicle for the reader, cellular device and installation.

In addition, you will need to provide NFC cards to passengers. I would figure $1 per card. You will also need software and a secure back-end system to manage transactions. This is very difficult to estimate, but let's say it'll cost $250,000, fully deployed with security. That would make the price for a system with 1,000 buses and 1 million riders approximately $2.25 million. You might be able to reduce the cost for cards by enabling riders to use the NFC device in their mobile phones.

This is a very rough estimate, keep in mind. If you were to go completely contactless, you could save a lot of money by eliminating fair collection and the security associated with it. NFC payment terminals also tend to require fewer payments than mag-stripe card systems that have a lot of moving parts and motors that break down.

—Mark Roberti, Founder and Editor, RFID Journal


Frederic Martinez 2015-06-03 11:20:31 AM
To complete what Mark rightfully says, I would add that there are 2 ways to answer your question depending on what you mean by NFC. If the question is about moving from a traditional system (mag stripe or paper tickets) to a contactless infrastructure, you need to consider a quite significant upgrade. It will require the replacement of the front end terminals (validators, ticket vending machines) to accept contactless cards, as well as the update of the back office to integrate and manage this new technology. This is dependant on the size of the transport network and the number of equipment to replace. Consider several tens of M$ in general for a large city. However, this is an important way to modernize the ticketing system and to benefit from greater throughput of passengers, cost savings in the long run, and improved service. Now, if the question is to enlarge the scope of a contactless infrastructure to mobile NFC acceptance, the investment is much less consequential. Most of contactless ticketing technologies can now be deployed on mobile devices and require no or very low upgrade of the terminals. You have to consider a commercial agreement with mobile companies (in most cases, the telecom operators) to host the transport service onto their devices (like the SIM card), and the purchase of a remote server (TSM) to manage the services lifecycle. Other options exist like mutualized or managed servers to lower the price of the service. You may consider from hundreds of k$ to a few M$ for the global set up, + distribution fees to mobile devices usually more attractive than distributing a physical card. My company is a wordwide supplier of contactless solutions, I encourage you to visit our website (http://www.gemalto.com/transport) to find additional information.

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