Enghouse Transportation Affords a Primer on Automated Fare Assortment – Streetsblog San Francisco
(This is the first in a series of articles from Enghouse Transportation, one of our advertising sponsors. Enghouse is hosting a free webinar on April 5th about modern fare collection systems and how they benefit transit operators, passengers and employees.)
Transit industry leaders are beginning to adopt new fare payment technologies that can help revolutionize the industry.
For decades, many transport companies have required passengers on their systems to pay in cash or to obtain an official account with a transport card or passport. They often require passengers to purchase tickets from kiosks or ticket offices, which can be plagued by long queues or frustrating delays. The cards and passes were independent of other payment systems customers might use, such as credit cards or debit cards, and some required minimum balances.
Enghouse Transportation is part of a paradigm shift in the industry, away from such “closed-loop” payment systems and towards new open-loop contactless payments that allow public transport passengers to use the same credit and debit cards they already use use for routine purchases. Experts say that these payment systems are the wave of the future.
Enghouse Transportation has established itself as an industry leader in open-loop payment systems in the Netherlands and Central and Eastern Europe and brings this know-how to the US market.
His recently published guide “What to Look For in an Automated Fare Collection Solution” [we should add a link for this] explains how an Automated Fare Collection (AFC) system works.
There are four basic elements of an AFC system:
· The network connection – The Payment Acceptance Device (PAD) must have an internet connection at the station or on board the transit vehicle.
· The Customer Transaction – A driver holds their contactless smart card, smartphone or handheld device to the PAD to validate the payment.
· The Back Office – The payment processor’s back office applies the agency’s fare rules, rebookings and fare caps to calculate the correct and best fare.
· The bank transaction – The transaction is forwarded to the merchant’s acquirer and the funds move from the customer’s account to the agency’s account.
The advantages of contactless, open-loop AFC are enormous. The software enables transport companies to limit daily, weekly or monthly tariffs and to grant discounts to certain customers. It enables fast tap-and-pay transactions that reduce boarding times. The contactless nature of payments is useful in reducing contact with potentially contaminated surfaces. The software also provides access to a customer portal where public transport passengers can download receipts, view their travel history and pay for account balances. The system can also make travel planning easier.
The transit industry is moving towards open-loop payment systems. In Visa’s Future of Urban Mobility study, [link?] 88 percent of passengers surveyed said they expect to be able to pay with their fingertips on trains and buses. The report also says more than 700 U.S. transit projects are underway that involve rolling out tap-and-go contactless payment methods.
It’s time to say goodbye to outdated fare systems, prepaid rides, confusing kiosks, paper tickets, proprietary public transit apps and cash handling. Open-loop contactless transit solutions allow riders – whether they are frequent commuters, locals or visitors – to simply use their existing credit card, debit card or mobile wallet to tap and pay for a ride in less than a second.
A development that is accelerating the use of these payment cards is the global switch to chip-enabled payment cards. According to EMVCo, more than nine out of ten card transactions were made with chip-enabled payment cards in 2021. The US saw the highest year-on-year increase, rising nine points from 72.8 percent to 81.7 percent of transactions.
This worldwide acceptance of chip-enabled card technology makes it easier for transport companies to switch to open-loop systems.
To learn more about modern fare collection systems and how they can benefit transit operators, passengers and employees, register for Enghouse’s free webinar on April 5, 2023 at 11:00 am PDT / 2:00 pm EDT.