TfL Figures Demonstrate the Mobile Potential

TfL (Transport for London) has long been the leading transport agency for ticketing systems worldwide with many other moving to emulate their system such as the United States, India, Australia, Hong Kong, and China. Recent figures released by TfL have shown that mobile and EMV contactless ticketing is growing and that the opportunity for further growth is present if harnessed correctly.

TfL released figures in April 2018 stating that over half of all journeys completed on TfL’s transportation network were conducted via contactless payments, EMV payment cards or mobile wallet/apps. Further figures released by TfL indicated a growth of 25% YoY between 2016-2017 in Mobile and EMV contactless ticketing adoption. Of these, TfL estimated that 1 in 8 were made by mobile devices using either Apple, Google, or Samsung Pay.

The success of TfL’s and Cubic’s open loop acceptance system has not gone unnoticed with New York, Sydney, Miami and Boston at various stages of establishing open loop ticketing systems on their respective networks.

However, the global rise in open loop acceptance is not only driven by London’s success.  In the Asia Pacific region India, Hong Kong, and China have been expanding and integrating payment apps into their respective ticketing systems allowing growth in the use of mobile and smart wearables in the ticketing market.

Gemalto is assisting the integration of the Octopus Card into Samsung Pay (Hong Kong), and it is safe to say the digitalization of the smart card not only will provide growth for Samsung Pay, but also inspire more changes that will have a direct impact to the accessibility of mobile payment options. The inclusion of Hong Kong’s Octopus Card onto Samsung Pay will not only provide growth to mobile ticketing (especially mobile ticketing functioning with NFC technology) but also shows a trend in payment platforms moving to include ticketing as part of their services.

Samsung isn’t the only one advancing within the transport smartcard and mobile ticketing market, with Apple incorporation of the Felica protocol in Japan and Googles recent partnership with NXP’s MIFARE 2GO, driving the market onwards to expand the availability of secure mobile ticketing worldwide.  Felica’s inclusion onto Apple devices will manifest growth in the APAC market as Japan, the main contributor of the Felica protocol, has a high smartphone penetration rate of which a large portion are Apple device users. MIFARE 2GO allows Google to branch out from an NFC payment app to a multiapplication app where a user can have control over payments and ticketing alike.

London is considered the major transport smart ticketing hub in the world, its system one of which many transportation operators aspire to, but in many other regions within the U.K. there are other mobile initiatives, especially in bus and tram services in the north of England. These services tend to use Apps rather than TfL’s solution involving EMV and NFC access as it removes many of the challenges in partner creation-ship in order to access the NFC secure element. These apps vary from picture display tickets to QR codes. The lesser need for security allows for the use of more dated ticketing methods such as QR and Picture tickets. That being said there is still interest by Transport Authorities in growing NFC mobile ticketing outside of the capital.

India has been rapidly updating its ticketing systems to include several options from pre-paid cards, mobile QR codes, RFID cards/coins and even open loop EMV ticketing in Mumbai. India is transforming its transportation networks, beginning in the high urban areas, enabling the acceptance of several device types to widen the catchment of users taking into account the wide disparity of device type access. The rise in smartphones in the region will provide mobile solutions a strong growing presence in India.

Smart ticketing systems are increasingly migrating to incorporate mobile ticketing solutions, but public adoption is not fast and in most cases, taking years before reaching a substantial level of inclusion such as those in London which lacked the advantage of precedence in open loop ticketing and many of the affiliated technologies. In part, this may be due to London being one of the leaders in large-scale smart open loop ticketing system. New projects such as those outlined will be able to successfully harness mobile ticketing and incite adoption as there are now more examples of successful, secure and trustworthy systems for the user to become comfortable with the use of mobile. The new projects set to launch in the U.S. will need to remain as simple and easily accessible for the projects to take off with rapid success. While the use of smart cards is not unusual in the U.S., it is still more common to use a paper ticket.  As such it may be prudent to provide incentives to draw customers to the handset or smart card device.

Even with the growth outlined in the TfL report, many users still prefer to use smart cards over mobiles (as only 1 in 8 transactions use a mobile device). It has long been said that the smart card market is not in danger from the mobile device and this remains true. Over the next 3-5 years, mobile ticketing will remain a growth market but will not become the sole ticketing or even main ticketing method in transport. This is due to a few reasons;

1. Many still view mobiles as insecure devices and have more trust in a smart card or a paper ticket to conduct a ticketing function
2. Not all users will have access to a mobile device or EMV enabled payment card, as such smart cards and paper tickets will still be necessary for any ticketing project.
3. Mobile ticketing is often portrayed as the companion to smart cards and therefore approached as more of a gadget rather than a main ticketing device. This point is changing as mobile wallet producers are digitizing smart cards (Apple pay, Samsung Pay, Google Pay). As such, mobile ticketing is still considered as a companion or secondary device to the primary ticket type issued.

However, while ABI Research does not believe this to the case as mobile adoption has been slow both in roll out and in adoption. The opportunities are still there and the following steps will provide clarity as to how to harness a mobile ticketing opportunity:

• System operators will need to provide mobile ticketing as the more accessible and primary method of ticketing without excluding the current user base and users who lack smartphones.
• Make ticketing apps more appealing than a smart card. This can be achieved by either providing marketing incentives and exclusive deals to mobile ticketing users via the app or to tie in multiple applications into the existing app.
• Combine with other functions, including payments, identification, and access control to help not only flesh out and expand services but additionally used as a platform from which to enter new markets, most notably within the area of smart cities.
• Tie in multiple city transport types (see TfL for example) and even intercity transport into one app/device. Creating a smooth and easy to use app for a larger area should be the aim of every TA. Also work in concert with other transport agencies for a mutually beneficial solution that provides an easy to use experience for the user.