• Dec. 8, 2016, 9:57 pm

While prime for disruption, public transportation ticketing technology upgrades face obstacles

A new Smart Insights report predicts the use of smart-ticketing options in public transportation will increase by more than 80 percent over the next five years.

Smart ticketing on the path to dematerialization” suggests the number of people employing contactless tickets, open loop and mobile solutions will grow substantially, with mobile ticketing seeing an 81.9 compound annual growth rate.

No surprise but the impetus for the new technologies are the cost and time inefficiencies of existing fare-collection systems.

It is not a clear path to a better tomorrow, however, for several factors threaten that progress. Funding shortages common to public transportation allow upgrades’ short-term expense to blur future savings. Regulatory environments, privacy and security concerns are additional drags.

The report analyzes public transportation in Tokyo, London, Paris, New York, Moscow and Beijing and forecasts ticket and card shipment volume along with adoption of new systems.

Thierry Spanjaard

Thierry Spanjaard

Smart Insights CEO Thierry Spanjaard said security will play a key role in how widely the new technologies are adopted.

“The strong growth of innovative ticketing solutions, such as Near-Field-Communication (NFC)-based ticketing, continues to demonstrate the key role of the secure transactions industry. Although magnetic stripe tickets keep being used in several transportation systems in the next years, we believe these ticketing solutions will disappear in the midterm.”

The adoption of account-based processing will play a key role in the adoption of new technology.

Marseille, France-based Intelling is a consultancy focused on market intelligence, marketing, and strategy for secure transactions, smart cards, telecoms, payment, and convergence. It publishes Smart Insights Reports, Smart Insights Weekly, and Smart Insights Market Trends.

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