In the midst of the global payment disruption, smart ticketing has become a mega-trend. Contactless cards have gained impetus over the concern that cash might spread COVID-19, preempting more industries to go cashless. What has come as a boon for the smart-ticketing industry is the penetration of digitization—cash is making way for virtual payments.
Korea is contemplating the decision to stop minting coins by 2020, while India scrapped 86 percent of its banknotes in November 2016. According to a study of payment habits conducted in Sweden, cash accounts for merely 13 percent of in-store payments. In addition, seven out of ten consumers can reportedly manage without cash, with 50 percent of merchants expected to do away with cash payments by 2025.
With novel smart-ticketing technologies that can detect an app on individuals’ smartphones and charge them automatically making a headway, queues at stations are gradually becoming a thing of the past. According to U.K.-based non-profit organization ITSO, 14.1 million smart tickets were sold in the United Kingdom between Jan. 6 and Mar. 3, 2019, and more than 20 million smart cards are said to be in circulation across U.K. bus, rail and train networks.
At a time when smart innovations have forayed into almost every facet of life, stakeholders are doing away with the costly maintenance of ticketing system that would, more often than not, lead to ineffective validation, a high environmental footprint and lost tickets. Solutions are being implemented using interconnected smart transportation technologies, which can seamlessly substitute legacy systems.
The trend for mobile ticketing innovations has become the linchpin following an upsurge in the use of smartphones. According to Statista, there are around three billion smartphone users globally, and the numbers are slated to shore up in the ensuing period. Mobile ticketing is the next big thing, as it will enable people to integrate other modes of transportation, including ridesharing, taxis and bike rentals—so much so that smart technology providers can provide agencies with data and inputs that will help government bodies regarding their underused and most-used lines, thereby helping to reduce congestion.
With the United States, Canada, the United Kingdom, France, Italy, Germany, China, Japan and Australia foraying into smart public-transport systems, integration into smart-city systems—such as making navigation seamless and traffic monitoring and management more convenient—will become a new normal.
Boosting the Customer Experience via RFID
At the forefront of smart ticketing is the growth of RFID technology. With the movement of vehicles uncertain on the heels of certain conditions, including dispatching times of irregular vehicles, traffic congestion and unexpected delays, the advent of smart bus ticketing systems using RFID and the Internet of Things (IoT) has hit the sweet spot in the smart-ticketing market. While RFID technology is used for scanning RFID cards, the IoT is sought after for GPS to check current locations.
A slew of companies are embedding RFID chips, which can transmit payment information and are dubbed “wave and pay” and “tap and go.” RFID chips have become a go-to-technology at venues, including in parking garages, quick-service restaurants (QSRs), movie theaters and convenience stores. RFID is at the vanguard of pioneering smart-ticketing systems, following the penetration of contactless-payment systems. Adding impetus will be smart cards that use embedded microchips to electronically store data, allow payments to be tracked and monitor ticket validity.
Smart Cards Drive Value-Chain Proposition
Smart cards are improving, and operators tend to use ticketing systems to gain access to a cost-effective, trusted and efficient service which will help them streamline their supply chain process by boosting revenue. Such cards can also help manage fraud—the National Concessionary Travel scheme in Scotland has shifted to smart cards, in fact—which has led to considerable savings by exhibiting the capability to use travel data to manage, identify and minimize this crime. It is pertinent to mention that smart cards are difficult to replicate and can be blocked when they are reported stolen or lost.
Switching to Smart with NFC
Unparalleled growth in the use of Near Field Communication (NFC) technology in mobile ticketing and public transportation is setting the mega-trend among smart-ticketing manufacturers. The rate of NFC adoption, covering all operating systems and across all handset OEMs, is likely to witness a marked rise during the next five years or so. An unprecedented growth in NFC-enabled wearables and smartphones capable of handling ticketing services, as well as a surge in demand for convenient mobile-ticketing options, has boded well for smart-ticketing manufacturers.
NFC-enabled tickets are sustainable, durable and more convenient than plastic cards, making them popular among travelers. For operational efficiency and customer engagement, NFC will be replete with investments. Specifically, pharmaceutical and transport companies will cash in on the benefits of NFC, and this will help them with asset tracking, cashless payments, and time and attendance tracking.
Enterprises have zeroed in on the prevailing opportunities and sheer versatility of NFC. The technology has become a turnkey solution for movie passes, real-time updates, reserving restaurant seats, redeeming reward points, booking train tickets, mobile banking and more.
Mobility-as-a-Service Hits the Sweet Spot
Saving on cash handling, real-time ticket usage, invaluable customer feedback and hassle-free scalability: that is what mobility-as-a-service (MaaS) can do. MaaS will bring a tectonic shift in the way passengers expect to travel and interact with operators amid the call for seamless travel and efficient transport systems. The MaaS model will add value proposition through the use of a single application to provide access to mobility with a single payment channel, doing away with a sea of payment and ticketing operations.
Even though the travel industry has had to face the brunt of the COVID-19 pandemic that has wreaked havoc globally, it has partly been a boon for the smart-ticketing market. The demand for contactless cards has skyrocketed and billions of journeys are being made with contactless payments. Google Maps announced in August 2019 that users would have the leeway to combine multiple transport types provided their journey was planned in its app. In what has come as a massive boost for smart-ticketing suppliers, a study conducted by Nexus revealed that passengers last year made more than 4.2 million purchases for day and season tickets using Google Pay, Apple Pay or contactless bank cards.
Case Study: TriMet’s Use of NFC-enabled Cards
Following the COVID-19 fallout, TriMet took audacious steps to minimize the amount of time riders would need to spend close to bus operators. Passengers who paid their fare with cash fumbled and took longer to slip coins and dollar bills into the farebox. The public agency thus decided to suspend cash payments in order to keep people safe, and it recommended that riders adopt contactless payment systems. TriMet encouraged riders to use NFC-enabled cards to tap and pay their fares.
Case Study: Hitachi Rail’s Use of Smart Tickets
The use of smart ticketing has gained ground at Hitachi Rail. The novel technology uses sensors on trains to detect an app on passengers’ smartphones as they board. To put things in perspective, travelers would not need to remove their phones from their pockets, and there would be no requirement for station barriers, thereby doing away with queues at ticket machines. This case study relates to Hitachi Rail following the development of the prototype technology, which is expected to undergo a strict testing program in Italy for Trentino Trasporti for use on trains, buses and trams.
The demand for smart tickets for public transport, sports and cultural tickets has risen significantly during the past several years, a vivid trend that can be witnessed in the 2020s. For instance, NFC will expand its footfall in Europe, North America and the Asia-Pacific region. Stakeholders will need to look to developing customizable ticketing systems, and the future of ticketing will potentially be about smart tickets, rather than merely smart cards. Customers will also seek out affordability, as price will be pivotal in triggering the adoption of smart ticketing.
Sunil Kumar Jha has been a part of the content industry for close to two years. Having previously worked as a voiceover artist and sportswriter, he now focuses on penning articles across numerous topics, ranging from business and technology to trade and finance. With a business-oriented educational background, Sunil brings an expertise in intensive research and a strategic approach to his articles.