Ticketing and Electronic Fare Collection: ITS Evaluation Guide

Electronic Fare Collection (EFC) or Automatic Fare Collection (AFC) encompasses a range of fare collection technologies and media[14] that makes ticketing more convenient for passengers and more efficient for transport authorities.

Ticketing in its traditional form, where money is exchanged for a paper ticket, is onerous for the passenger, the authority, and the operator. The passenger must have cash; the operator must have ticket sales points or sell tickets onboard. The driver must accept money, provide change, issue the ticket, account for the cash taken, transport the money, and bank it. All while limiting losses to fare evasion and potentially corrupt drivers and employees.

Fare collection systems and media have advanced significantly over the years as transport authorities have moved from paper tickets to media cards, NFC contactless cards, and more recently, phone-based technologies.

The traditional closed-loop payment systems are now supplemented with open-loop solutions, which can lead to full Mobility as a Service (MaaS) support with a single payment mechanism.

Two main ticketing trends are emerging:

• Account-based ticketing
• Leveraging passenger devices – mobile phones and bank cards

Account-based ticketing means that passengers’ points or money are stored on a central database, with the commuter identifying themselves using a bank card or mobile phone. The transaction is processed on the central database instead of ticket validators or vending machines.

Leveraging the devices a commuter already has, like contactless credit cards, mobile phones, and even smartwatches, makes it easier for transport operators as they don’t have to issue transport media like physical tickets or cards. These ticketing systems are usually closed-loop or open-loop systems that use different ticketing standards like the Smart Ticketing Alliance, ITSO (British national standard), Calypso, and VDV eTicket services.

Many public transport systems use the Near Field Communications (NFC) standard. This allows contactless payment cards, mobile phones or smart devices (e.g., a smartwatch) to be used. A mobile application is downloaded, and a virtual card is created. This virtual card is then validated against the ticket validator.

Some systems use barcodes as a medium. This can be a barcode that would either be printed on a ticket or displayed on a mobile phone screen. The main weakness of this is that a barcode can be replicated by taking screenshots on a mobile phone, but several security methods can overcome this.

Benefits

The most significant passenger benefit is increasing the convenience of ticket purchases and payments and frictionless transfers between services and modes. Tickets can be bought over the internet or paid for directly via a bank card or mobile phone. Even the credit card itself can be the ticket, reducing the need to carry cash or use a specific card.

Benefits for transport authorities and operators are reduced cash handling and easier financial management. This allows authorities to innovate and introduce more equitable fare structures that benefit regular passengers and incentivise off-peak travel to minimise peak travel demand.

Additional benefits of ticketing and electronic fare collection include:

Improved revenue collection. Electronic fare collection systems reduce the opportunity for fare evasion, especially when coupled with enforcement. On some systems, fare evasion rates before electronic ticketing were estimated to be as high as 30%. When New York City Transit introduced its MetroCard system in 1993, annual revenue increased by $USD 43 million in the first year and $USD 54 million the next. This was due to tightened revenue collection promoted by the electronic fare collection system and reduced fare evasion.

Customer convenience. Electronic fare systems improve passenger convenience by providing a wider range of payment methods. They also promote the integration of fares across modes and regional transportation systems through having a single fare media. A credit card-based option goes even further for casual users by removing the need to buy a ticket before the trip and the need to carry cash.

Flexible fare policies. Flexible fare policies allow transport authorities to subsidise certain groups of passengers like students or the elderly and encourage shifts in travel patterns. For instance, offering off-peak discounts to reduce peak loads or over weekends. They may also allow for implementing zonal or area-based fares or distance-based fares that are fairer to passengers.

Evaluation Guide

Ticketing is your biggest public-facing service and needs to be aligned with your commuter needs. It is essential to define your strategy upfront and align it with the level of development and infrastructure at your disposal. As a result, ticketing is often regionally specific and differs significantly between areas.

When selecting a ticketing and electronic fare collection system, you should consider the following:

1. Is there a regional or national framework?
Passengers travel not only in the local area but also across the wider region and nationally. Where there is a national system or standard, passengers will benefit most if the ticketing solution follows and is compatible with these standards. Even when introducing new solutions, backwards compatibility with national or regional frameworks will help promote modal shifts.

2. What payment methods are you going to have available?
There are numerous different payment methods available, such as:

• • Account-based ticketing – commuters either top up an account or receive an invoice at the end of the month. This must be combined with a card or app to link trips to the account.
  • Stored value card systems – a branded card (like a travel card) is topped up with money or points and then used for travel. These cards usually are NFC enabled, allowing for contactless transactions. They are also known as a closed-loop payment system as the customers’ money is deposited on the card and held by the transport authority.
  • Euro Mastercard Visa (EMV) – allows the use of selected credit and debit cards to pay for trips directly. This is an open-loop system where a bank holds customer funds until payment is needed.
  • Cash – the original payment system where physical money is used. After COVID-19, many transport authorities are cash-free. Cash is also expensive to handle and may be open to abuse and fraud.
  • Barcodes – tickets are paid for ahead of time and validated by reading the QR code or barcode from a hardcopy or mobile device.
  • Mobile money – where tickets are paid for using a mobile phone app linked to a payment account – for example, WePay in China and M-Pesa in Kenya.
  • NFC enabled devices – smartphones and watches with NFC chips can be used to ‘tap and pay’. This can be app-based or used with an account or a credit card.

The choice of ticketing systems and payment methods differs from region to region and is heavily influenced by development and regional preferences. For example, a ticketing system in East Africa would likely use a mobile phone money solution. Ticketing in London uses NFC for stored-value cards, like the Oyster Card and EMV credit cards directly with smart device support.

Technologies continue to evolve, so you need to choose your ticketing system and design it with your commuter in mind, the current level of technological development, and where you want to be in the next decade.

3. What communications infrastructure do you have available?
You should also consider the communications infrastructure available to your city or region. Most ticketing systems require some form of internet connectivity or dedicated communications channel at selling points and the fare gate. Will the system you choose require fibre infrastructure at your selling points? Consider also how transactions onboard vehicles will be verified and if verification involves network access. Remember that most public transport fare transactions must be fast, as they need to deal with a customer who is moving past a validator, so other passengers are not delayed.

4. Are you going cashless?
Cashless systems are becoming mainstream in the developed world, and cash is becoming less common for public transport payments. This has significantly increased due to COVID-19 driving cash-free and contactless operations.

It is crucial to have substantial cash and audit controls in place if you accept cash. Make sure your ticketing system has all the checks and balances in place to track when and where cash goes missing. For card vending machines, consider only accepting notes and not giving change. The full note denomination is loaded directly onto the fare media or ticket. This reduces the need for change modules in the vending machines and reduces capital expenditure and maintenance costs over the long term.

5. How fast do you want passengers to board your service?
Your public transport philosophy and strategy will usually dictate how you load passengers and how fast they board services. This has design implications and repercussions for how you use your ticketing system.

For rail and Bus Rapid Transit (BRT) applications, boarding time is reduced by having passengers validate their tickets ahead of time at fare gates, allowing them to board at all doors when the service arrives quickly. For services where fast boarding is not a requirement, passengers can usually board the vehicle and then pay for the service.

If you want to have fast boarding times, you need to consider how passengers pay for tickets, the design and location of fare gates, and the speed at which these can validate a ticket. It is also important to ensure your ticketing system can integrate with your fare gates. If you allow passengers to board and then pay (as can be the case on regional train travel), you need to consider how you deal with fare evasion.

6. How will you deal with fare evasion?
Fare evasion is one of the biggest threats to the success of a public transport system. Make sure you have a robust plan in place for dealing with fare evasion, as well as the appropriate penalties for evaders.

Some transport authorities have fitted their vehicles with passenger counters connected to their Automatic Vehicle Location and Control (AVLC) system to count the number of passengers boarding, compared with the number of tickets sold. This can be used as a live fare evasion system, where the driver or control centre receives a notification of the fare evasion event. This information can also be reported in Business Intelligence systems to identify fare evasion hot spots, and enforcement is focused.

7. How do you deal with low card balances?
Regular customers become frustrated when they cannot board a vehicle because they cannot top up their fare media or buy a ticket. One option to deal with low card balances is to have fare rules that permit negative balances, allowing customers to travel to a location to top up their accounts afterwards. Automatic top-ups can also help by preventing the card from going below a minimum value. Safety at top-up stations should consider lighting, the field of view, and proximity to security staff. Commuters want to feel safe when buying tickets or topping up fare media, particularly at night.

8. Are you going to implement a single ticketing system for all modes of transport?
Implementing a single ticketing system for all modes of public transport and all operators is hugely beneficial for commuters, who can seamlessly move between different transport modes without being concerned about who is operating the service. For transport authorities implementing such a system, if revenue goes to operators, you will need to make sure that the ticketing system has a clearing facility where each operator is paid according to the passengers carried and that revenue is correctly assigned.

9. What are the costs of processing transactions, and how does it affect the cost of equipment?
There are various open and closed-loop technologies and systems for processing transactions like EMV, MIFARE, and account-based ticketing. Make sure yours is appropriate for the market and is cost competitive. The transaction processing method you choose has implications for the processing costs of passenger ticket transactions, the equipment you will use, and the certifications required. Equipment and transaction costs can significantly increase capital and long-term operational costs.

10. What are you spending versus your return?
You need to balance capital outlay with the revenue to be generated. It is difficult to justify implementing a great ticketing system with multiple features that is more expensive to run and maintain than the revenue it generates. System maintenance costs are often overlooked and should be carefully considered when evaluating the kind of ticketing system, you want to implement.

11. Do you need to integrate your ticketing and AVLC systems?
Integration between ticketing and AVLC systems reporting can be a game-changer for operators. Increasingly, operators are using their AVLC system to police, supplement, and improve the functionality of their ticketing system. While at the same time, they are using ticketing information with the route and trip data to strengthen their decision making on trips and schedules.

Integrating devices like passenger counters with the AVLC can help confirm and highlight passenger number discrepancies, which can identify fare evasion. Integrated reporting between the AVLC and ticketing systems can also allow operators to identify underperforming routes or individual trips and allow them to be rescheduled. This can be a significant cost-saver for operations.

Ticketing Case Study: Mahala Saturdays, City of Tshwane

In 2015, Ruth Mutasa, the Director of Marketing for the A Re Yeng Bus Rapid Transit System, faced a conundrum. How could she attract new passengers to the system without spending a huge amount on advertising, and retain them as regular passengers?

The solution was called “Mahala Saturdays” – Mahala meaning ‘free’ in Zulu and Sotho. This allowed new passengers who registered cards on their system to travel for free on Saturdays for a month on the BRT system. Mahala Saturdays took advantage of Saturday services that had excess capacity, due to low passenger volumes.

Run over a series of four Saturdays in October 2015, Mahala Saturdays introduced new passengers to the system, showed them how to use the tap and go ticketing system, and offered free Wi-Fi onboard the buses.

The Mahala Saturdays promotion was highly successful and saw a 24% increase in passenger numbers as a result.

Source: Interview with Ruth Mutasa, Director of Marketing, A Re Yeng, African Public Transport Management Conference 2016

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