Search

A paradigm shift in transit ticketing

Updated: Sep 13, 2018



For a hundred years the only way a passenger could enter through ticket barriers and confirm they had a right to travel, was to purchase a paper ticket before they traveled.

Around the turn of the century, the first ticketing evolution took place. Closed loop cards such as Myki, Opal and Oyster, were introduced by transit operators as a way to move away from cash based paper tickets to pre-paid plastic cards.


Closed loop cards hold a pre-paid balance of funds, the card is tapped on a station gate or bus readers at the start, and possibly at the end, of a journey. The card calculates the fare for the journey and reduces the balance on the card for each journey made. The transit operator’s back office system performs some validation on the journeys made, it also handles top-ups, refunds and gives the passenger the ability to look at a history of travel. As part of this model the transit operator receives the funds before travel, however the cost of running closed loop systems can be prohibitive, due to the cost of managing the cards, processing top ups, dealing with refunds, and the fraud risk.


The next evolution of ticketing was account based ticketing where there is a separation of the identification of the passenger, from the payment itself. The passenger identifies themselves as they get on and off different forms of transport, the transit operator combines these identification events to work out the travel taken, and so derives the fare to be paid. The fare being settled at the end of the travel day by a pre-determined method, generally an automatic payment from a credit card or bank account.

In the case to account based ticketing the transit operator calculates the fare, allowing them to perform additional processing like cap fares, provide discounts for special routes and do time-based fare calculations.


A popular example of account based ticketing is open loop ticketing, or contactless EMV card based travel. In the case of open loop a standard contactless bank card, or mobile app, is used to facilitate travel. The contactless card is tapped in the same way as the closed loop card, generally on the same station gate or bus reader. The contactless card interacts with the reader providing identity and location information. This information is sent to the transit operator’s back office together with the contactless card payments details. This is an elegant mechanism to allow passengers to travel without pre-registering, as the payment details within the contactless card itself are used to pay for the travel.


Due to there being no balance or deposit held by the open loop system before the passenger travels. If funds are not available to pay at the end of the travel day, the transit operator will seek payment of the funds from the passenger and will stop the passenger from continuing to travel. Stopping further travel is achieved by the transit operator’s back office generating a list of cards that have funds owing and distributing this list to all station gates and bus readers throughout the transit system. The readers, in turn, stop all cards that are on this list being used to access the travel system.


Closed loop, account based ticketing and open loop systems all have different benefits and challenges. Transit ticketing is not one-size-fits-all, in determining the best solution for a transport operator or city, factors such as social demographics, percentage of population with bank accounts, average fares, average age of riders and even cellular connectivity all play a part in deciding what is most appropriate.

21 views0 comments