Account-based ticketing: a model for the future
05 April 2017, UK
Originally posted on railway-technology.com
Many obstacles stand in the way of the industry being able to deliver the end goal of deploying an intelligent and integrated fare collection system that yields loyalty, repeat usage and a frictionless experience for the passenger.
Closed loop systems provide half the solution. Robust systems where the information needed to work out the fare is stored on smart cards, they are easy to use and have reduced operating costs compared with paper tickets.
Yet they lack flexibility, forcing passengers to use a smart card valid only on that transport system. This also locks up funds, which remain dormant until needed to pay for a ticket, whilst requiring users to remember to top them up, causing the same problems around machines in the station concourse.
Account-based payments systems are becoming a popular alternative for the industry. In combination with contactless EMV payments linked directly to the passenger’s bank, much of the friction around ticket purchasing, topping up or balance checking falls away. Passengers can just turn up and ride.
Fare rules, based on the notion of capping, can be built into account-based systems, calculating the best fare for the passenger based on the actual amount of travel used. With the ability to adjust payment structures based on the changing travel patterns of consumers so seamlessly, cost concerns for passengers are reduced, and with that the overall experience improved.
Beyond the financial benefits, account-based systems also positively engender a sense of ‘social justice’ amongst passengers. Currently, many card-based systems only really extend benefits to a small niche group of travellers; with yearly passes providing the most advantages only usually acquired by more affluent passengers. But there are those who can’t afford a weekly travel pass at the start of the week and so any potential benefits are immediately out of reach.
Through the use of account-based systems that apply capping, passengers can earn a pass just by travelling. When enough trips have been completed to achieve this, they can receive the discount applied to a longer travel pass automatically – reaping the financial benefits without the need to pay upfront.
For operators delivering account based solutions, one of the main cost-saving advantages is the reduction of ticket sales points required, especially with the cost of running ticket dispensing machines putting pressure on budgets.
From an operational perspective, many of the complexities associated with the logistics and management of machines fall away and efficiencies rise. With the right back office system in place, you can also introduce more sophisticated fare policies, where the calculations are created in a central computing system rather than at the real-time moment of ‘tapping’.
With a richer fare policy that can be linked to data (otherwise inaccessible via closed loop systems), operators have heightened opportunities to engage with passengers and develop targeted loyalty programmes and rewards, whilst generating additional commercial benefits enabled by an account based approach.
For example, the use of a car number plate as an identifier in a park and ride location could enable operators to tie the parking element with the passenger’s entire transit fare. This provides benefits for both, with the end user receiving a seamless experience across their journey and the operator gaining the potential to raise loyalty and thus increase ridership.
Utilising this data, operators can also tap into a huge amount of cross-selling opportunities, linking retail offers and other nearby offers, all whilst improving the experience for the passenger. This model is proven with Vix Technology’s customer in Bangkok.
As we strive towards delivering a transport ticketing utopia, a number of key innovations will be rolled out, albeit at a slower pace than seen in other technology industry sectors.
Likely the next big development in transport ticketing technology will relate specifically to the gating systems used in stations across the globe, a key point of congestion and friction for the passenger.
The concept of Be-In Be Out (BIBO) systems, where the presence of a smart ticket in a public transport vehicle is automatically detected and registered could well become commonplace in the near future.
Automatically tracking passenger flow throughout stations, understanding when people board and alight transport services, and calculating fares without any need for direct interaction from passengers, removes a huge amount of friction for those using the service.
There’s no real doubt of the potential of BIBO technology, however it does pose the question of whether it will be viable from a social point of view? With current gated systems, there’s a social element whereby passengers who ‘tap’ their card sends a signal to other users that says, ‘I have permission to travel’. With BIBO, this goes away.
Once additional questions of security, fare evasion and platform passenger management have been answered satisfactorily, then the acceptance and effectiveness of a system like this will be determined by the social and cultural environment and will no doubt vary from community to community.
Regardless of all technological and social influences however, the future of transport ticketing technology will stem from convenience, with the systems dominant in tomorrow’s public transport networks being those developed with the primary goal of delivering a better customer journey.
Originally posted on railway-technology.com