Transit ticketing is changing in the new world of “mobility”

FirstPartner is attending Transport Ticketing Global 2024 in London on 5 and 6 March 2024. This post is the text of an article that FirstPartner’s Tim Jefferson has contributed to the Smart Ticketing Insights Paper produced in collaboration with Visa for the event. Tim is also moderating sessions at the event.

2024 and beyond: The world of transit ticketing is changing in the new world of “mobility”

The Customer convenience and transit agency benefits brought by closed loop and cEMV PAYG ticketing solutions can be dramatically enhanced by taking advantage of proprietary mobile wallets such as Apple and Google and third party Super Apps enabled through card virtualisation.

As we move into 2024, there are major changes taking place in the way people want to travel. This is driven by a number of factors, notably Net zero initiatives and world- wide post pandemic changes to work and leisure patterns.

Ridership of most major public transport networks has returned to a high percentage of the volumes in late 2019, but commuters in many parts of the world do not travel as often as they did reducing the demand for traditional season tickets and period passes.

Leisure travel has widely risen post Covid with weekend travel on Transport for London (TfL) in the UK now as high as during the working week. This major shift to less regular and structured travel impacts transit agency revenues and all aspects of operations including ticketing and fare structures, timetabling, vehicle utilisation, maintenance and staffing.

Customer expectations are also changing. Riders want convenience, ease of use and flexibility. They expect to be able to turn up and travel, without having to pre-purchase a ticket, or buy and top up a travel smartcard (issued by the transit agency and often called a “closed loop card”).

Transit users see simple and easy to use Pay as you Go (PAYG) ride-share, personal mobility and food delivery services from companies such as Uber, Lyft, Via, Grab and Didi and want the same type of customer experiences for public transport.

Customers also expect pre and during live travel information and updates to be available 24/7, online, on their mobile devices and in their own language. This includes multi-modal trip planning, live timetabling, location information, disruption reporting and alert messaging.

The challenge for transit agencies is to deliver ticketing and information services to a wide range of customer segments to meet these increasingly demanding customer expectations. Gone are the days when transit agencies just provided static timetabling information to download from their websites!

Mobile is both the now and also the future!

Now

Mobile is already the now, as customers expect to be able to get travel information and also to use their mobile wallet to pay for cEMV PAYG travel. Users get that travel information from the transit agency’s own mobile app, a mobile version of the agency’s website, a third-party travel app or Google or Apple map apps already.

Users are also already using their phones to top up transit agency closed loop cards. This can work for either a linked physical smartcard or a virtualised version in their mobile wallet of choice. Due to the increased convenience, vendors and the wallet providers have been progressively developing and deploying these virtualised card solutions for the last couple of years. Examples of solutions delivered via Apple and Google Wallets include:

The user experience is slick with riders either adding a new card direct to the wallet or just adding their existing agency card to their wallets. Users top up via either the transit agency’s own app, via their open loop payment cards in their wallets or via direct bank payments.

Many large transit agencies, especially in the North American market are looking not to issue pre-paid closed loop physical cards when they change back-office systems, at least to start with, as they see mobile as the way forward and want to drive mobile acceptance and reduce their costs. They will if required issue cards, for certain segments of their customer base, but this will be quite low in absolute numbers. Agencies also are looking to make sure they meet their legal US Government “Title VI” requirements for Federal funded transit agencies, by providing un and underbanked with commercial off the shelf pre-paid apps/cards such as “Cash App” or Apple Cash in the US , rather than agency issued media.

In addition to these virtualised transit agency issued cards, cEMV contactless PAYG transit ticketing solutions allow riders to use virtualised standard bank issued payment cards loaded in their Apple Pay, Google Pay, Samsung Pay, Huawei Pay wallets, for cEMV PAYG and then in the WeChat Pay and AliPay QR based wallets/apps for use in China and SE Asia. This is already business as usual for most transit agencies, either with 750 existing or planned implementations, claimed by Visa.

Key to driving further use of cEMV PAYG is the added value brought by the OEM wallets. A good example is the implementation in the UK in Brighton with Google Wallet. Brighton & Hove Buses users can view their journeys, spending history, and savings and check their progress towards daily or weekly fare caps directly in their Google Wallet.

The transit agency Go-Ahead Group see this as a customer experience enhancement. “Most of our passengers are already using digital or contactless payment methods, so it makes sense for us to trial new ways in which we can further enhance the customer’s journey. With 60 million passengers on our buses a year, the customer experience is a top priority,” Brighton & Hove Buses’s – Commercial Director Nick Hill.

This increased functionality within the wallets is driving enhanced customer experience, meeting the increased customer expectations and also reducing costs and complexity for the transit agencies, who have to do less themselves with their mobile apps and websites. A “win- win” for agencies, but also a major win for customers as they see all the information in their trusted and familiar wallet.

Credit: Orca

We are increasingly seeing increased functionality and levels of integration driven by all the wallet providers, for example, Google Wallet supporting cEMV PAYG and also on transit agency issued virtualised cards. This includes buying direct from Google Maps and also period passes, such as the Orca Card in Seattle.

This move away from agency issued physical smartcard (media) means potential significant cost savings for agencies and operational efficiency. The total cost of ownership of these types of solutions is high including card purchases, personalisation of the cards, distribution costs, ATMs, ticket office and third-party sales commissions.

It is possible to remove a good proportion of these direct agency costs, which is vital in cash strapped transit agencies around the world.

Allied to this is the way that agencies are getting smarter in their procurement strategies. Gone are the days when agencies had a single source procurement and relied on vendors 100%. Agencies now are doing step by step approach to upgrades and then modular procurements, taking more responsibility for the integrated solutions and more of an operational involvement. This drives better seamless digital customer experiences, but in a more cost- effective manner, with more agency involvement.

Future

Frictionless travel – the promise of UWB

Emerging technology in mobile such as Ultra-Wideband (UWB) which is already supported by most mobile devices, could revolutionise the user experience of gates and validators, where the gate seamlessly opens when you approach or the validator confirms your presence automatically. Removing completely the need to tap a phone or card or worse physically insert a paper ticket.

While further increasing customer convenience such solutions will also benefit operators by helping them manage busy gate-lines and reducing dwell time for bus and tram loading and unloading.

This use of UWB is far more accurate and effective than Bluetooth presence detection solutions which have suffered from variations in technical standards and poor and or inconsistent customer experiences.

The way to go

Transit agencies, their technology vendors and the wider payments and mobile ecosystems have an opportunity to drive much more integrated customer experiences, with easy to use and understand mobile PAYG, prep-paid solutions, with card virtualisation and cash apps.

The use of OEM wallets, Apple and Google Maps and SuperApps, rather than agency built and maintained transit apps will be the way forward for most users, with other solutions still being required for the edge use cases and social inclusivity.

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