Automated Fare Collection System Market Statistics, 2027
The global automated fare collection system market was valued at $6,639.10 million in 2019, and is projected to reach $12,753.75 million by 2027, registering a CAGR of 11.6%.
The driving factors which boost the development of automatic fare collection systems industry that leverage Cloud Services and incorporate user-friendly NFC technology. The companies in the U.S. plan to introduce a pure wrist pitch for NFC payment that allows consumers to pay for payment at any contactless terminal with a single touch. In addition, the U.S. regulatory authorities have signed an agreement with NFC forum to promote NFC technology on public transport. Moreover, recent developments such as use of NFC technology in the Indian Metro rail in Asia-Pacific fuels the process of issuing tickets to the customers.
Changing payment outlook of the passengers eliminates the hard cash requirement and minimizes the transit time that helps eliminate the long ticket queues is a significant driving force for the market. Automated fare collection system is a contactless, end-to-end solution for collecting fare payments and replacing traditional ticketing system with automated ticketing. It comprises automatic gate machines, ticket vending machines, recharging terminals, and ticket checking machines. This system facilitates efficiency in fare collection, improves the overall transaction rate, and saves extensive amount of time, thereby, minimizing waiting time in queues and searching for cash to buy tickets. In addition, it is an easy method for revenue collection. It offers travelers to carry one card to use for all transit modes.
The market report is segmented on the basis of component, application, technology platform, and region. On the basis of component, it is bifurcated into hardware and software. By application, it is divided into bus, toll, car rental, and train. On the basis of technology platform, it is categorized into smart cards, near-field communications, optical character recognition, and others (magnetic strips and bar codes). Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
By Application
Train Segment is projected as the most lucrative segment
The installation of automated fare collection system incurs high cost. The installation of AFCS in transport companies include installing payment collection equipment and checking devices, setting of communication network (wired networks), and installing network equipment (all kinds of networks), fixing the installed system hardware, fine-tuning and testing system hardware, and interaction between system components. Bus and taxi transportation service providers require handheld collection devices, while subways and train facilities require much bigger infrastructure. This increases the overall installation cost, which hinders the growth of the market.
By Component
Hardware is projected as the most lucrative segments
Using wireless NFC technology, two-way communication is possible between electronic devices. People are able to perform contactless transactions with just one touch owing to this technology. This advanced technologies is utilized in public transportation, including bus, train, taxi, and tickets for flights, among other modes.
By Technology Platform
NFC is projected as the most lucrative segments
NFC and Cloud data are proving to be a perfect combination not just for the Internet of Things, but also in terms of more efficient and user-friendly Automated Fare Collection (AFC) systems. In recent years, the advent of Near Field Communication (NFC)-equipped smartphones has opened up a channel to invade into the AFC network from the mobile Internet, i.e., by Host-based Card Emulation (HCE) over NFC-equipped smartphones.
By Region
Asia Pacific would exhibit the highest CAGR of 14.4% during 2020-2027.
Major players in the global automated fare collection system market such as Atos SE, Cubic Transportation Systems, Inc., dormakaba Holding, LECIP Group, LG CNS, NXP Semiconductors, OMRON Corporation, Samsung SDS, Scheidt&Bacchhan Gmbh, and Thales Group.
Key Developments
- In June 2019, Dormakaba Holding signed an agreement to acquire Alvarado Manufacturing Co. Inc., a leading manufacturer of physical access solutions such as speed gates, turnstiles, and others.
- In January 2019, LECIP HOLDINGS CORPORATION launched its new LV-700 validator for electronic fare collection schemes in public transport
- In March 2019, NXP Semiconductors signed an agreement with Public Transport Victoria (PTV), Australia to implement NXP’s end-to-end MIFARE 2GO cloud service with Google Pay to take its myki transit card mobile. NXP’s MIFARE 2GO cloud service is expected to work with Google Pay to enable mobile ticketing in multiple transportation modes and scalability across all compatible android NFC-enabled phones, giving citizens convenient and efficient travel options in smart cities.
- In August 2018, Cubic Transportation Systems, Inc. signed an agreement with Delerrok to expand cloud-based offerings for small and mid-sized transit operators. Cubic leverages Delerrok’sTouchPass solution in combination with its Transit Management as a Service (TMaaS) platform to deliver a comprehensive payment and real-time information solution at an affordable price.
Top Impacting Factors
The significant impacting factors in the growth of the market include contactless open payment, increased demand for smartphones, enhanced efficiency, low fraud rates, enhanced transport infrastructure and security system, and flexible fare plans. Further, factors such as increase in high speed of public transport, rise of technology payment, and global inter-operability show a positive impact on the market. Each of these factors is anticipated to have a definite impact on the market during the forecast period (2020–2027).
Contactless open payment
The need for convenient and user-friendly mode of fare payment has increased tremendously. Contactless open payment benefits customers, as their debit or credit cards act as a ticket office, thereby resulting in a hassle-free fare payment. By adopting an automated fare payment system that is based on the industry’s open standards, transit agencies can enable riders to tap contactless open payment method for point-of-entry payments. Therefore, passengers need not carry cash or wait in long queues for purchasing tickets. Contactless open payment means agencies no longer need to support extensive fare media management and distribution systems. Contactless open payment only reduces the need for own custom built ticketing system and its associated costs, but often enables companies to aggregate small transactions with fewer charges. Transit operators accept contactless bank cards as a mode of payment for commuting. Bank cards systems can be layered on to most existing systems to allow customers to choose their preferred payment method. Thus, because of the reduction in operating cost and improved customer service, the contactless open payment will drive the market growth in near future.
Owing to spread of the COVID-19 pandemic, reopening of the public places is focusing toward safety of the passenger during commute. The contactless payment is a way to pay for fares with maximum safety measures and reduced operational time. For instance: Visa has expanded contactless payment for the urban transportation service to around 500 cities across the globe as the COVID-19 health crisis continues to disrupt social activities. The company is expecting that around 65% cards in the market will be no-contact payment cards by the end of 2020 owing to safety concerns along with speed & convenience.
Increasing demand for smartphones
Smartphones have become an essential tool for online ticketing thereby boosting the overall growth of the automated fare collection system market. Smartphones make purchasing of tickets easier and more convenient with standalone smartphone applications for travelling in buses and railways, which fuels the market growth. It allows customers to purchase any type of ticket and make cashless payment.
Moreover, one of the biggest advantages of mobile application-based ticketing is that it lowers boarding time and reduces in cash-handling procedures. Nowadays, customers value the comfort of using preloaded cards for transactions to enhance transit experience of travelers.
Enhanced efficiency
Automated fare collection system eliminates cash payment and concerns associated with language barriers between drivers and passengers, thereby facilitating hassle-free payment using smartcards. With every swipe of card, valuable data is collected and instantly incorporated in a database to enable efficient handling of payments, faster transactions and less processing time. In addition, it enables merchants to manage records efficiently and handle large amount of transactions. Moreover, AFC systems allow quick service as well as self-service options, ensuring minimal or no waiting time for consumers, which reduces the overall operational time and improves efficiency of the entire process. Furthermore, faster validation of transactions allows the staff to generate fare tokens and tickets quickly. The Automatic Fare collection (AFC) system has improved the efficiency of fare box collection and made the journey convenient for the commuters and thereby, drives the market growth.
Low fraud rates
Smartcard technology is preferred over paper tickets due to high data-storage capacity of these systems and high level of security encryption. Public transport providers incur financial losses due to fare or ticket evasions. Automated fare collection systems allow access to only those customers who have collected the token by making the payment or have sufficient fund balance in their smart cards. The implementation of this technology tends to reduce the number of frauds and prevent counterfeiting.
AFC enables transit operators to improve their financial control and track media sales, transfers, and cash transactions. With fully automated fare collection, ticket fraud can be reduced and effective controls can be implemented owing to the powerful reporting capabilities of the platform. It also allows operators to reduce or restrict the cash handling responsibilities of staff, thereby reducing frauds and boosting the growth of the automated fare collection system market.
Enhanced transport infrastructure and security system
The governments of Singapore, China, and others, have focused on improving the transportation structure and security system of their respective countries. The land transport authority (LTA) has deployed more than 4,800 public buses in Singapore. A multi-modal AFC solution for public transportation in Malaysia permits passengers to travel effortlessly by means of train, bus, light rail transit, or express rail to different cities using the same payment mechanism, which is a single contactless smart card. This increases the adoption rate of such systems, as these are appealing as well as convenient for travelers.
COVID-19 Impact Analysis
In the current COVID-19 health crisis, unprecedented times call for creative solutions, and the payments technology industry offers many different opportunities to people to support each other as well as the communities in a safe and effective manner with little to no physical contact. Due to COVID-19 impact analysis, the major impact is experienced by the public mobility as people are suggested to stay at home and prefer work from home wherever possible. From March 2020, public transport in majority of the big cities have been completely or partially shut down. Though, the restriction on public mobility has been lifted partially since the past two or three months, however, the world’s major cities are experiencing 70% to 90% reduction in the public-transit ridership.
In the current scenario, payment environment has witnessed drastic change across the globe as passengers are inclining toward digital payment solutions to perform contactless payment operations. In the post COVID-19 situation in the near future, high health concern and penetration of digital technologies, contactless and automated payment system is going to gain momentum in the upcoming decade. Social distancing, lockdowns, and other restrictions imposed due to the COVID-19 crisis are enforcing people to increase the use of automated fare collection systems.
Key Benefits For Stakeholders
- This study comprises analytical depiction of the automated fare collection system market trends with current trends and future estimations to depict the imminent investment pockets.
- The overall potential is determined to understand the profitable trends to gain a stronger foothold.
- The automated fare collection system market analysis report presents information related to key drivers, restraints, and opportunities with a detailed impact analysis.
- The current growth and automated fare collection system market forecasts quantitatively analyzed from 2019 to 2027 to benchmark the financial competency.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the market share.
- The study also comprises the market opportunity, which helps key players in decision making.
- The leading players in the industry are expecting high revenue margin from market returns.
Automated Fare Collection System Market Report Highlights
| Aspects | Details |
 By APPLICATION |
|
 By COMPONENT |
|
 By TECHNOLOGY PLATFORM |
|
 By Region |
|
 Key Market Players | ATOS SE, SCHEIDT & BACCHHAN GMBH, LG CNS, CUBIC TRANSPORTATION SYSTEMS, INC., OMRON CORPORATION, THALES GROUP, DORMAKABA HOLDING, SAMSUNG SDS, LECIP HOLDINGS CORPORATION, NXP SEMICONDUCTORS |
Analyst Review
The automated fare collection system is the new era of public transportation front where majority of the public transportation providers are focused to develop easy fare ticketing, validating as well as collection technologies to ease the fare collection operations with time effective output along with unmanned process. In recent years, numerous plans were proposed to reform the fare system used in public transport. The adoption of automated fare collection systems would replace passes and paper-based tickets with electronic fare payments. The introduction of national integrated card systems is expected to provide fare concessions to students and pensioners using public transport. Nowadays, there is a notable increase in the demand for automated fare collection ticketing system due to the increase in demand for contactless open payment solutions and smart phones, reduction in fraud rates, flexible fare plans, reduced traffic congestion, and enhanced transport infrastructure.
Automated Fare Collection System (AFCS) is an advanced payment system that allows transit operators to collect revenue. The system comprises five levels namely, Level-0, Level-1, Level-2, Level-3, and Level-4. Level-0 is the basic level of AFCS, which includes ticket media. Ticket media comprises printed paper tickets, smart cards, bar codes, and mobile devices. Level-1 comprises field devices (devices that allow inspection of fare ticket media). These devices include ticket vending machines, fare gates, platform validators, and others. In addition, Level-2 is active on station level, which includes the involvement of IT systems. Level-3 provides data to system at back end. At this stage, the management monitors devices, tariff management, route management, reporting, and statistics. Lastly, in Level-4, multiple transports are combined by the IT system. For instance, one smart card or one ticket can be used for three different transport systems: buses, metros, and monorails. As public transportation includes only railways and roadways, airways and waterways are not considered a part of the AFCS market.
Furthermore, the system comprises NFC, RFID, OCR, magnetic stripes, and smart cards. Asia-Pacific is emerging as a big market and is already well equipped with some of the prominent AFC system producers. China manufactures more than 70% of these systems for various AFC vendors. Magnetic stripe cards were previously used in the market but are currently replaced by smart cards. OCRs cannot be used for mass transit fare collection, as they are vulnerable to revenue loss and frauds. AFCS prefer using smart cards as a primary ticketing solution with the provision of accepting NFC as well as the hardware that supports NFC by default support smart card, due to operational complications between payment services, bank, transit authorities, and AFC service providers.
The key players operating in the global automated fare collection system market are Atos SE, Cubic Transportation Systems, Inc., Dormakaba Holding, LECIP Group, LG CNS, NXP Semiconductors, OMRON Corporation, Samsung SDS, Scheidt & Bacchhan Gmbh, and Thales Group. Automated fair collection system market is consolidated market where leading eight market players are holding around 75% share of the overall global market. Market players are focused on agreement/contracts and acquisition to gain competitive advantage. For instance, in August 2020, Scheidt & Bachmann signed an agreement with OC Transpo, the public transit agency, to install contactless fare payment technology on the OC Transpo’s bus fleet and at O-Train stations with fare gates. This partnership will result in OC Transpo having one of the most advanced fare payment systems in Canada, giving customers flexibility to choose from a range of payment options.
Ongoing commute restrictions, increasing health concerns and social distancing norms are creating long term impact on the passamgers, owing to which they are adopting the digital transactions. Changing digital payment outllok is expected to support the growth of the market.
The report sample for global automated fare collection system market report can be obtained on demand from the website.
Agreements, partnerships, product developments, and product launches are the top most competitive developments which are adopted by the leading market players in the global market
Public transit service provides of Rail transit, Bus transit, Tolls system and car rental solutionsare the major players in the global autmoted fare collection system market.
The company profiles of the top ten players of the market can be obtained from the company profile section mentioned in the report. This section includes analysis of top ten player’s operating in the industry along with their last three year revenue, segmental revenue, product offerings, key strategies adopted, and geographical revenue generated
Based on the automated fare collection system market analysis, Asia-Pacific accounts to be highest revenue contributor in 2019 and expected to see a lucrative growth provides more business opportunities during the forecast period
By Application, Train is expacted to gain traction over the forecast period as well as domainate the market share in the global automated fare collection system market
US, Japan, Germany has wirnessed as a key matured markets growing in the global automated fare collection system market.
"The key players operating in the global automated fare collection system market are Atos SE, Cubic Transportation Systems, Inc., Dormakaba Holding, LECIP Group, LG CNS, NXP Semiconductors, OMRON Corporation, Samsung SDS, Scheidt & Bacchhan Gmbh, and Thales Group. "
Loading Table Of Content...
