The Present & Future Of Automated Fare Collection Systems

The Present & Future Of Automated Fare Collection Systems

Driven by the need to automate public transit fare collection, engineers created a solution that significantly facilitated the process of buying a ticket and validating it – the automated fare collection system. New technologies such as smart cards and mobile applications were crucial for its further advancement and contributed to its quick adoption. What exactly makes these systems so efficient? And are they a good fit for every city? Let’s dive in! 

In this article:

What is an automated fare collection system? 

At its core, an automated fare collection system is a combination of hardware and software components that work together to deliver a quick and user-friendly fare service to riders. On the hardware side, there are electronic validators, POS terminals, fare gates, and ticket vending machines. On the software side, fare collection systems (account-based or otherwise) provide the handling and transfer of rider and payment information, and its processing in a back end panel. 

Within an automated fare collection system, riders can choose from a variety of fare media – mobile applications, smart cards, EMV (bank cards serving as a payment and validation tool), paper tickets, and more. Depending on the fare media they choose, they can validate onboard with a single tap/swipe of their card, or a quick scan of the QR code on their ticket or mobile app. 

The importance of automated fare collection systems

As more and more people moved to urban areas, it became impossible for transit agencies to adequately serve the increasing ridership. To do this in the old-fashioned way, they needed more staff and more time. Manual fare collection almost always includes some form of cash exchange which is slow and there is ample room for mistakes if the operator is tired or distracted. What’s more, it was unhygienic – a problem that emerged during the COVID-19 pandemic and significantly sped up the adoption of contactless ticketing options.  

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Faced by these issues, agencies began looking for better ways to serve their riders, and automated fare collection systems were born. Replacing manned service windows with ticket vending machines and other options improved the speed and ease of the fare purchase process. It also helped agencies reduce their staff and allocate the resources saved to improving their fleet. On the other hand, onboard ticket validation equipment took off the responsibility of the driver to check each passenger’s fare, and reduced the number of inspectors needed within the system. 

The automated fare collection market has expanded in the past 20 years (expected to reach $12.7 billion by 2027) as more and more people learn to use and appreciate the benefits of the AFC systems. The revolution is driven by the mass adoption of smartphones and bank cards, which make the processes even easier. Riders are increasingly moving towards using their smartphones (instead of smart cards), smart wearable devices, and recently, their bank cards through EMV. This comes to show that as technology advances, they are looking for even simpler methods to use the public transit system – which paves the way towards investment in many new smart mobility projects. 

Benefits of automated fare collection systems 

Automated fare collection systems introduced a large variety of benefits for agencies and riders alike. Depending on the particular needs of every city, the range can differ. Some of the most common benefits include: 

1. Reduced number of staff required for the smooth operation of the whole agency. 

From service windows to accounting, AFC systems can free the agency personnel’s time for more pressing tasks that cannot be automated.  

2. Frauds can be avoided, and revenue leaks cut. 

Automated systems limit the number of ways bad actors can interfere in the agency’s work. They can help stop practices such as cash payments that go unregistered by the staff, unauthorized use of fare media (stolen or lost cards), inspection fraud, etc. Control of fraud is implemented through: 

  • Near real-time synchronization 
  • Validity of the fare  
  • Dynamic QR codes that change in seconds 
  • Pass-back protection for QR codes as well as smart cards 
  • AI algorithms to detect “teleportation” – two riders trying to use the same day pass in different locations at the same time 
  • Token encryption to prevent duplicating tickets or passes  

4. AFC systems are more efficient from the riders’ perspective as the riders acquire and validate their transit documentation themselves.  

5. Smooth operation during peak hours.  

Money exchanges between the rider and the driver are a daunting task during rush hours and can contribute significantly to delays. With an AFC system, riders validate contactlessly in a matter of seconds, thus decreasing the dwell time.  

6. Cheap and reusable fare media. 

Smart cards and other types of wearables are reusable and cost less than printing paper tickets for every ride. If an agency chooses to implement mobile ticketing, fare costs can be practically cut as riders use their own phones as proof of the right to travel. EMV solutions can further reduce the need to produce any other type of fare media. 

7. Detailed analytics. 

AFC systems provide a substantial advantage by aggregating vast amounts of transit data that can be used to optimize the agency’s efforts. Validators collect data on the number of passengers, their routes across the whole transit system, and others. This data pool can help the agency strategize to improve the overall transit experience. 

This is only a part of the benefits that transit agencies get when signing up for automatic fare collection. The many different types of automation provide amazing flexibility to suit any city’s needs. A further layer of improvement is introducing account-based fare collection that facilitates payments and provides more data for analysis. 

The transit industry saw a great deal of improvements during the past decade. The rise of contactless technologies made it possible to introduce better ways to pay and validate onboard public transit vehicles. Although (sadly) the paper ticket is not going anywhere anytime soon, mobile ticketing and EMV payments are coming to the forefront. Let’s talk about each of these technologies! 

Mobile ticketing 

With mobile ticketing, riders use their own smart devices to purchase fares and validate. A specially created mobile app generates a QR code that can be scanned at a validator or can be used by inspectors to prove a rider’s right to travel. These types of applications are usually provided by the transit agency and are free to download. With them, riders have a hub for all their transit needs – a convenient way to buy fares and validate them, but also a trip planner and a billing history. While most applications offer only a few of these benefits, Modeshift Automatic Fare Collection System comes with an app that combines all of them.

Smart cards 

Historically, smart cards have helped riders move away from cash since the beginning of AFC. Smart cards utilize magnetic stripes or a chip with NFC (Near-field Communication) technology that holds the data of each passenger or a special token that can be connected to a passenger account. NFC is the more advanced technology and is thus more secure. When the smart card is swiped, the relevant fare is deducted from the amount stored on it or the account. Depending on the way the validator operates (whether it carries out the whole transaction or simply transfers it to the cloud), it may take some time for the transaction to be finalized. This is one of the biggest downsides of this technology. Another one is that if the card isn’t connected to a personal account in an account-based system – if the user loses their card, they lose all the credit stored on it. This problem only underscores the need to combine automatic fare collection with account-based systems. The greatest benefit of smart cards is that they are simple to create and operate and people are already used to having at least one of them in their wallets.  

EMV payments

EMV technologies are the newest form of fare collection. The EMV standard (Europay, Mastercard, Visa) allows owners of the respective bank cards to use them to buy tickets and validate onboard public transit. EMV payments have faced some security concerns in the past, but engineers are quickly turning this ingenious technology into the safest and most straightforward on the market. 

What does the future hold for automated fare collection? 

During the past ten years, we have seen an incredible shift in the ways people interact with technology. It is safe to say that the next big thing in fare collection will be the development of even safer and easier to use technologies that make the whole process of purchasing tickets, boarding and validation even quicker. For agencies, data pools collected by account-based fare collection systems will provide the necessary steps for improvement. As cities battle with climate change and an increase in population, technologies that facilitate city life will continue to attract investments and attention.