So long, smart cards?

John Bradburn | 14 Aug 2015 | Comments

Transport for Greater Manchester (TfGM) last week announced that it had terminated its contract with Atos to design, build and operate an Oyster-style smartcard across its transport network, with TfGM questioning whether the technology behind smart cards is now obsolete (source: The recent launch of Apple Pay in the UK, allowing London Underground commuters to swap out their Oyster card for their iPhone 6, suggests that TfGM may be right, with technology having progressed faster than many have realised. Given these developments, it is perhaps a good time to reflect on how such technologies could impact on how we interact with the transport networks around us.

The technology behind Apple Pay – mobile embedded near field communication (NFC) chips, similar technology used in contactless credit cards – is not new. The Japanese have had NFC enabled mobiles for over a decade, using their phones to pay for a variety of goods and services – from convenience stores to vending machines. The technology is now finely ingrained within the country’s transport network, covering buses, taxis, airline tickets, underground systems and of course, the Shinkansen high speed rail network. Apple and others like Google and Samsung are merely playing a rather delayed game of catch up, driven by the high adoption rate of smart phone technology, rising consumer expectations and improved connectivity.

The use of credit cards and NFC enabled devices marks a wider trend towards account based ticketing amongst transport service providers. Traditionally, transport system payments have been card based tickets (be it in the form of paper tickets or tokens), with a passenger buying a ticket or card, which gives them access to the transport network. Where access cards are used, such as the Oyster card, all information is held on the card itself. This approach, developed at a time when communications infrastructure were far slower than today, is an expensive one for transport operators – requiring sales infrastructure (ticket offices and machines), as well as the costs of producing and distributing the tickets themselves. Account based ticketing bypasses the need for a passenger to purchase tickets, theoretically allowing a passenger to gain access to the transport system through any form of contactless device linked to their payment account, such as an account card (Oyster), phone, watch or personal ID card.

The benefits for passengers to such an approach would be vast: mobile phones would become one-stop-portals for journey planning, ticketing and payment. Gone would be the days of worrying about having the correct change, or which ticket would be best for your journey – with the back office system calculating the cheapest price for your journey after its completion. Opportunities for further development are abound – from personalised and specific journey updates to truly flexible multi-modal journeys within one ticket – a vision set out in Atkins’ white paper on Journeys of the Future.

For operators, the benefits of account based ticketing are also persuasive. Lower upfront and ongoing costs for the technology will provide direct financial savings (operators will not have to issue, maintain and replace tickets or cards themselves), whilst mobile commerce and targeted advertising could provide a lucrative revenue stream. Account based ticketing also provides an opportunity for operational efficiency improvements, for example by improving the accuracy and speed of ticket checking, and providing authorities and operators with highly detailed passenger origin-destination data. Such are the benefits provided through this approach that TfL has announced its intentions to replace the technology in its Oyster Cards to allow for account based ticketing (source: Railway Gazette).

The key to this is the interoperability of account based ticketing systems and the expansion of such services. The ITSO standard was developed to ensure interoperability of smart card ticketing between transport operators in the UK, but has faced criticism over its slow progress (source: ITSO PDF). In securing the interoperability of account based ticketing systems, transport authorities and operators should consider the technical standards required, the customer experience of using the service and the opportunities the system creates for wider journey management.

Account based ticketing is one step towards improving the door-to-door journey experience for transport users, providing a customer centric approach to transport delivery and journey management. This will allow authorities and operators to better manage their transport assets, improve efficiencies and provide customers with personalised, accurate and specific details about their journey. As Apple transformed the music industry, journey management and the overall Intelligent Mobility market space offers similar opportunities for people and their mobility options, with account based ticketing being a step towards this which authorities and operators should be looking to harness.

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