Account Based Ticketing: A Stepping Stone to Open Loop, Mobile, and Wearable Ticketing Acceptance

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By Phil Sealy | 2Q 2017 | IN-4585

Transport authorities continue to evaluate next-generation ticketing technologies as a platform from which they can streamline operations. This evaluation is occurring whether they are already running a well-established ticketing system or implementing a new system to expand and extend network visibility in order to gather valuable user data points and offer new innovative services.

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Account Based Ticketing: Bringing Transportation Authorities into the 21st Century

NEWS


Transport authorities continue to evaluate next-generation ticketing technologies as a platform from which they can streamline operations. This evaluation is occurring whether they are already running a well-established ticketing system or implementing a new system to expand and extend network visibility in order to gather valuable user data points and offer new innovative services. 

This is where Account Based Ticketing (ABT) comes into play. ABT is viewed as a significant system-enabler used to unlock a multitude of opportunities ranging from revenue and cost reductions—in the issuance and ongoing maintenance of existing closed systems—to a platform from which new device and credential medias can be accepted on existing infrastructure.

London Setting the Tone—Others Quickly Follow

IMPACT


London continues to be considered a contactless ticketing pioneer, and Transport for London’s (TfL) system sets the technology bar for many other transportation authorities. Today, TfL expanded to accept open loop payment cards, while still operating its closed loop Oyster system. 

In turn, open loop acceptance in London opened the use of mobile and wearables (Android, Samsung, and Apple Pay), as well as contactless payment cards. TfL set up a system similar to ABT, linking EMV-enabled contactless cards to a non-permanent account  in  a  back-end  infrastructure.

Cubic’s partnership with TfL, and subsequent licensing of TfL technology, resulted in a number of other cities piloting accountbased solutions including Singapore, Irkutsk in Russia, and in Sydney, Australia. A plethora of account basedsystem pilots should be expected, as more cities look to license TfL’s technology to unlock additional value, using the technology as a centralized system from which future strategies, services, and solutions can be built upon.

Opportunity Knocks

COMMENTARY


The fact remains that account based systems, such as the one operational in London, are not mobile-centric systems per se, but have the ability to accept mobile as a bonus by-product of a wider open loop acceptance system. TfL implemented its account based system in order to accept open loop payments. Mobile and wearable acceptance soon followed thanks to Apple, Android, and Samsung Pay, but the fact remains that TfL does not know what type of credential type is used to facilitate a payment, only knowing that it is an open loop credential of some sort.

Having said this, it is clear that account based systems will not only open up the ability to accept open loop payment cards, but additionally allow a platform from which transportation authorities can begin to address other credential acceptance, whether leveraging other open loop mobile payment platforms or leveraging a unique identifier on a particular credential or device and linking to the back-end system.

Although account based systems make next-generation device acceptance arguably simpler to implement, there remains some significant market barriers. After all, a device’s or credential’s unique identifier will be owned, regardless of the device or credential type, and these owners will need partnering in order for a transportation authority to gain access and leverage the unique identifier in question.

This is where ABI Research believes there is a significant opportunity for an aggregator, a centralized vendor that can facilitate the necessary agreements and subsequent opening of unique identifiers across a multitude of different device or credential form factors, issued by a myriad of end markets (payments, government, enterprise, consumer, etc.).

The aggregator role would suit a vendor that has expertise within a multitude of the end markets in question, in addition to having established and trusted relationships with some of the leading device OEMs, as well as financial and banking institutions, governments, and mobile network operators (MNOs).

Nonetheless, smart card and perhaps secure IC vendors—from an embedded perspective in partnership with a smart card vendor—are perfectly positioned to facilitate this aggregator opportunity to allow maximum reach and scale in the unlocking of new device and credential acceptance. An aggregator has the potential to take transportation authorities into the 21st century, uncoupling them from the acceptance of existing closed/EMV certified open loop devices, providing a simplistic platform from which transportation authorities can leverage any credential and device, linking to account details stored in the back-end system. Without an aggregator, transportation authorities will be limited in the credentials and devices they are able to accept (even if they implement an account based system) and the ubiquitous nature from a form factor acceptance point of view that an account based system can enable will not be realized.

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