Open-loop ticketing continues to roll out in multiple large cities, with transit authorities expanding traveler payment options to provide a catch-all ecosystem and encourage an upwards trend in ridership post-COVID.
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More Cities Look to Roll Out Open-Loop
Open-loop payments are to be introduced by bus operators in 33 small to mid-tier cities throughout Greece, with the first bus agency aiming to introduce the service in June 2022. The solutions provider for the ticketing validators and back-office infrastructure, AMCO, confirmed that the first city in line to accept contactless payment cards will be Larissa, one of Greece’s five largest cities, with the aim for other cities to follow including Patras and several tourist cities, such as Rhodes, Corfu, and areas of Crete.
Similarly, bus travelers in Cannes, France, are now able to make contactless fare payments with their payment card or leverage mobile payments with Apple Pay, Google Pay, or Samsung Pay. The operator, Palm Bus, has rolled out the open loop contactless ticketing system on more than 200 buses across its network, enabling passengers to pay their fares by using their contactless enabled device on an on-board validator without requiring registering or purchase a proprietary transit card.
Meanwhile, the transit authority of Vancouver, TransLink, has finalized a project with Interac, a debit scheme in Canada for TransLink to roll out upgrades for travelers to use their contactless Interac and payment cards to pay for fares. Dubbed the “Transit Open Payments Agreement”, the project will require TransLink to help promote use of Interac debit on its transit system and to ensure the project launches by August 2022.
How Will the Projects be Managed and Current Landscape
At the present time, the ticketing ecosystem in Greece is not yet fully fledged as it relates to open-loop payments, though with a high number of tourist cities, it is expected that the upgrades will see high usage among travelers who prefer the streamlining of transit payments as well as infrequent travelers and tourists. The ticketing infrastructure already in place will receive additional firmware upgrades to accept open-loop while also accepting the closed-loop Mifare card as well.
Furthermore, the backend infrastructure is road mapped for the future to enable interoperable fare capping among 33 operators, with payments for alternative transit such as renting bicycles potentially able to be deployed upon an Account Based Ticketing (ABT) deployment in the ecosystem. The role of merchant acquirer is being fulfilled by the National Bank of Greece, while Visa will likely provide their processing and fraud management company Cybersource.
As it relates to Vancouver, the primary focus of the project is to expand TransLink’s underutilized open-loop payments service, launched in 2018 across the agency’s network of buses, trains, and ferries. Upon launch, the open-loop service only supported Visa and Mastercard branded credit cards and NFC wallets, with the American Express brand being introduce in 2019. Visa and Mastercard branded debit cards have to be accepted through a separate scheme.
Currently, the presence of open-loop payments in the Vancouver ticketing ecosystem is very low at a penetration rate of around 2% of rides. This is heavily driven by the existing fare policies which offer travelers a 20% discount to pay with closed-loop Compass cards rather than with contactless credit. TransLink also only accepts open-loop payments for single rides and aligns open-loop card fares and wallets alongside fares paid with cash.
TransLink did state that Interac, one of the most-used contactless payments debit brand, would also be integrated, which will likely go a long way to increasing uptake among the use of open-loop in the ticketing environment. However, changing fare policies to align open-loop with closed-loop payment fares would go even further to achieving this goal and should be considered as an option to fully commit to providing maximal choice to the traveler.
How Does This Align with the Wider Market?
While the overall trend in the global ticketing ecosystem is heading towards open-loop and providing travelers with more and more options to pay, what is also clear is that open-loop is not a silver bullet. The trajectory for the ticketing market will result in an enriched dynamic which will feature a combination of closed- and open-loop ticketing solutions, though whether this will be based on proprietary protocols or EMV is still largely dependent on many factors such as cost, existing infrastructure, ridership levels, and PCI compliance.
A hybrid solution would cater for the widest range of traveler types as offering only closed-loop EMV ticketing supports ABT, which is good for a transit network looking to offer only ABT but this doesn’t cater for all travelers. Current EMV specifications have been designed with the global payments market in mind, which doesn’t allow write functionality for data onto the card, providing a significant obstacle for transit authorities looking to offer concession fares to travelers.
Modernizing public transit networks by including contactless payments and EMV as a standard will add an important tier of payment choice for consumers navigating this pandemic-influenced era. Indeed, as Transit Authorities are looking to continually open up and expand their offerings as part of an overall drive towards bringing riders back into the public transit network after COVID-19, traveler choice is the name of the game and considerations such as cost, supply-chain strength, and transaction speed will continue to push open standards over at least the next few years.