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The journey from paper tickets to open loop ticketing solutions

Updated: Sep 13, 2018

I was recently asked to speak at a couple of conferences on “Mobility as a Service and the Future of Transit Ticketing”. This is a short summary of the first part of that presentation, for those that were unable to attend the conferences.

Transit ticketing has existed for a long time, in fact since the advent of the stagecoach, around 1900. Transit tickets were developed as a way to ensure that the conductor on a stagecoach was depositing all the money collected from riding passengers. A ticket inspector could come on to the stagecoach and ask to see all the rider’s tickets. If all riders on that “stage” of the journey had a valid ticket, then the inspector could conclude that the conductor had given them a ticket and so reconciling tickets issued against fares received, would ensure that the conductor was operating honestly.

Around the turn of the century, closed loop transit cards were introduced. Closed loop cards such as Myki, Opal or Oyster cards, hold a balance of funds and make a fare calculation when tapped – the balance is deducted from a pre-paid wallet at the gate or validator. In this case the transit operator’s back office is performing some validation, is also handling top-ups, etc. It is not performing the primary fare calculation.

The next generation of ticketing was Account Based Ticketing where there is a separation of the Identity of the rider from the payment itself. The rider identifies themselves as they get on and off different forms of transport – and the Transit operator combines all these identification events to work out the travel taken and so the fare to be charged. The fare being charge to some pre-determined method, generally a credit card or bank account.

Because the transit operator calculates the fare - they can do clever things like cap fares - provide discounts for special routes or do time-based fare calculations. The move away from a pre-paid ticket to, an event to identify the traveler, and then the back office of the transit operator calculating the fare, is the main thrust of Account Based Ticketing

One 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 transit validator. The contactless card interacts with the transit validator 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 way to allow riders to travel without pre-registering, as the contactless card itself it used to make and pay from the travel.

Closed loop, account based ticketing and open loop can all co-exist in the one transit ecosystem. Transit ticketing is not a one-size-fits all solution.

When we advice clients on the most appropriate solutions, 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.

David Lunt

CEO Aethon Global

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