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Transit Ticketing & Fare Collection in APAC: Key takeaways from our Singapore conference in September 2017 [free access]

October 1, 2017

Global Mass Transit organised its second annual conference on ‘Transit Ticketing and Fare Collection APAC 2017’ on September 6-7, 2017 in Singapore. The conference brought together experts from the government and industry directly involved in the deployment of advanced fare collection systems in cities in the Asia Pacific region.

 

The speakers included policymakers, transit executives, transit managers, technology providers, representatives of ticketing associations, and consultants. There were five sponsors – Arsenal Testhouse, INIT GmbH, MasterCard, NFC Forum and Snapper Services Limited.

 

The key takeaways from the conference are noted below.

  

Mobility-as-a-Service (MaaS)

  

Gopi Rengasamy, Director, Global Strategy Group, KPMG Singapore stated that MaaS is the full and seamless integration of private and public mobility services. It combines trip planning, ticketing and payment into one integrated platform. This brings a paradigm shift because transport options are being planned around commuter needs and not vice versa.

 

Account-based ticketing (ABT) is a precursor to MaaS. The shift towards ABT diminishes the need for existing end-to-end integrated solution providers, who dominate the automated fare collection (AFC) landscape with 89 per cent market share.

 

Open standards in ABT allow enable cost-effective consumer off the shelf (COTS) offerings to meet the needs of transport agencies and operators.

 

Figure 1 indicates the type of AFC contracts awarded over the years.

  

Figure 1: AFC contracts awarded by type in 2014 and 2016

 

image001_754

 Sources: Global Mass Transit Research, Transparency Market Research

 

Payment systems are also a key enabler for MaaS. Merchants have widely kept up with this evolution in order to deliver convenient and seamless buying experience. Disruption is expected to continue and innovative solutions such as payments via social payments are set to further transform all sectors and industries. Figure 2 highlights the evolution of consumer digital payments.

  

Figure 2: Evolution of consumer digital payments

 

image003_754_01

Sources: Payments Source, Press search, Statista

 

Achieving interoperability is a key challenge for launching MaaS. Further, cyber security is expected to play a vital role in protecting the digital MaaS ecosystem.

  

Developer/Operator Perspective

  

Silvester Prakasam, Senior Advisor, Fare System Division, Land Transport Authority, Singapore discussed if ABT is an optimal solution for Asia. There are success stories of large-scale ABT implementation in London and Chicago. However, there are also cases of successful implementation of closed-loop smartcards in Asia in Hong Kong, South Korea and Japan.

 

The merits of closed payment have to be weighed carefully before implementing ABT especially in case of large under-banked population.

 

The advantages of ABT are as follows:

 

 

The drawbacks of ABT are as follows:

 

 

Singapore LTA has conducted a mobile ticketing pilot this year. Figure 3 indicates the transaction distance for various handset models.

  

Figure 3: Transaction Distance Across Various Handset Models

 

 image005_1024_03

Source: Singapore LTA

 

Singapore LTA’s observations from the pilot include the following:

 

 

The implications include:

 

 

Singapore LTA shared an optimised risk transaction model as indicated in Figure 4.

  

Figure 4: Optimised risk transaction model

 

image007_754

Source: Singapore LTA

 

Dr Padet Praditphet, Director - Common Ticketing Office, OTP, Ministry of Transport, Thailand spoke about the upcoming common ticketing system in Thailand.

 

The new integrated fare product will include Mangmoom smartcard and near field communication (NFC)-based mobile ticketing. Mangmoom is a contactless smartcard which will include discount cards, day passes, limited time/limited trip cards, fixed journey cards, concession cards, etc

 

Figure 5 indicates features of the planned common ticketing system, which is scheduled to be launched in June 2018.

 

Figure 5: Planned common ticketing system in Thailand

 

 image009_1495_02

Source: Common Ticketing Office, OTP, Ministry of Transport

 

Zakaria Md. Tap, Head of Transit Acquirer Division, Land Public Transport Commission (SPAD), Malaysia spoke about the upcoming integrated common payment system (ICPS) in Malaysia. The Greater Kuala Lumpur region has several transit operators including the LRT Kelana Jaya, LRT Ampang, KL Monorail, ERL Airport Train, KTM Komuter and MRT 1; therefore, ticketing integration is key to provide a seamless travel experience.

 

The ICPS will include deployment of account-based payment (EMV) in both plastic and mobile formats. The project is planned to be completed by 2020.

 

Figure 6 illustrates the implementation plan of ICPS.

 

Figure 6: ICPS implementation plan

 

image011_754 

Source: SPAD Malaysia

 

Integration and Interoperability

 

Dr Chandra Segaran, Senior Advisor (IT) and Head (Special Projects), Transit Link Pte. Limited, Singapore provided an overview of the role of TransitLink as Singapore’s sole Transit Acquirer.

 

TransitLink is a key node in Singapore’s Public Transport Ecosystem and a critical interface between commuters and the transit system. Its main activities include:

 

-          Apportion fares, refund claims, and manage public information and transport schemes as transit acquirer.

-          Provide top-up services for all card issuers as master load agent.

-          Provide card sales, refund and replacements for card issuers as agent for card issuers.

-          Implement and support national projects through TransitLink’s service touch-points.

 

 

He also highlighted TransitLink’s role in setting affordable fares and a concession card in Singapore.

 

Graham Alston, Program Director - Integrated Fares and Ticketing, Greater Wellington Regional Council, New Zealand provided an update on the upcoming national ticketing programme. The planned solutions are based on four main parameters:

 

-          Account-based ticketing/open loop payment

-          Provision of a prepaid transit card

-          Multi-tenanted ticketing service solution

-          Support for relevant emerging models (e.g. MaaS)

 

The Greater Wellington, Regional Consortium, Environment Canterbury Ticketing Solution (GRETS) timeline has remained on track. The indicative business case was completed in June 2017 and the market study in July 2017.

 

The two-stage procurement is expected in 2017-18 and the initial implementation in Wellington Rail is scheduled for 2019-20.

 

The GRETS team conducted a comprehensive market sounding exercise over a six-week period during May-July 2017. Some of the key results included:

 

-          Strong and universal support for ABT approach

-          Majority market support for open-loop platform

-          Several ticketing service providers suggested closed-loop tokens in addition to open-loop tokens

-          Strong and universal support for a multi-tenanted solution

-          Reservations about exclusive use of an EMV transit prepaid card

-          Positive support for cashless on-board ticketing

 

Paul Gwynn, Managing Director, INIT Asia-Pacific described MaaS as a shift away from personally owned modes of transportation and towards mobility solutions that are consumed as a service.

 

MaaS combines transportation service information from public and private transportation providers through a unified gateway to create and manage trips, which can be paid for with a single account. It enables integration of multiple modes of transport into seamless trip chains, with bookings and payments managed collectively for all legs of the trip.

 

The MaaS system is flexible, open and integrated.

 

 

Mr. Gwynn also discussed INIT’s integrated mobility solution and case studies from Portland (Oregon, US) and Turku (Finland).

 

Deployment of Bank Cards for Transit Ticketing

 

Shubhrendu Khoche, VP, Enterprise Partnerships, MasterCard Asia Pacific spoke about the potential role of MasterCard in a transit project.

 

The benefits that MasterCard brings to a transit project include:

 

 

MasterCard provides open loop payments in London. Transport for London (TfL) overcame the following three barriers to making contactless payments successful in public transport.

 

 

Singapore LTA and Mastercard conducted the first open payments pilot project in Asia. The key features of the pilot were:

 

 

Smart Ticketing for Smart Cities

 

Alvin Tang, Chief Solutions Architect, Octopus Holdings Limited and Nora Tang, General Manager - Technical Department, Octopus Holdings Limited, Hong Kong stated that Octopus has evolved into one of the world's leading smartcard payment systems.

 

Some of the key features of the Octopus system include:

 

 

Octopus is a trusted brand and payment platform. It is used for small value retail payments, access ID (access to residential and commercial buildings) and as an identity proof (staff card, student card, etc.).

 

Octopus also has a rewards and loyalty programme, which function as marketing platforms. 

 

The Octopus mobile SIM allows instant review of remaining value and the last 40 transactions through the Octopus App.

 

The Octopus Online Payment Service is the first mobile payment solution that uses contactless smartcard to process online payments on NFC-enabled mobile devices. 

 

Octopus O! ePay was launched in April 2016 as the first network-based mobile payment service allowing person-to-person payment.  

 

In addition, the Octopus system is an important data source for real-time monitoring and big data analytics. 

 

Some of the key smart city pilot projects underway in Hong Kong include:

 

-          Traffic light time extension through tapping of Octopus card

-          Use of Octopus for payment at on-street parking meters and toll gates

-          Integration of mobile and Octopus services

 

Lee Kyang Jai, Global Director, Korea Smart Card Company (KSCC) and CEO, T-money Asia spoke about on-board ticketing service (E-Pass) for intercity bus express. E-Pass was launched in 2015 for eight major bus companies operating 2,300 buses and 130 bus terminals.

 

KSCC provided consulting, planning and project implementation services for 14 months. The objectives were to provide seamless travel, streamline ticketing as well as introduce passenger information and mobile app service.

 

With the launch of the multifunctional on-board unit, the boarding process has become streamlined. The system also enables fleet management.   

 

Mark Streeting, Partner, L.E.K. Consulting spoke about key trends in smart ticketing for smart cities. He highlighted the following key points:

 

-          Governments play a key role in the governance of and provision of regulatory frameworks that support open standards

-          The role of traditional payment providers in delivery is expected to continue.

-          Mobility payments are expected to expand beyond price, quality, time, and preferences.

-          A range of integrated technologies will significantly change customer travel habits and expectations. Machine learning is expected to be a key change agent.

-          The ‘personalised experience’ resonates as the future of mobility planning, with provision of mobility services that suits lifestyle and not just transport needs.

-           Standardised and open payments are a key principle to future mobility payments.

-          A single account for all mobility services is unlikely in the near term, although account functionality is undisputed as the way forward.

-          Users are interested in integrated solutions for journey planning and payment

 

Mobile Ticketing

 

Kelvin Lim, Senior Manager and Assistant Chief Specialist for Fare System, Singapore spoke of the challenges in the deployment of NFC for mobile ticketing, with the example of Singapore. The existing mass rapid transit (MRT) network in Singapore spans 200 km. The city-state reports 3.2 million daily trips on the MRT and LRT network.

 

Singapore launched the first ABT system in Asia. The MRT system uses contactless credit and debit cards with EMV chips to pay for bus and train rides.

 

Singapore has piloted NFC-based mobile ticketing in collaboration with telecommunication companies and EZ-link. There are more than 30,000 acceptance points across the island.

 

The deployment of NFC in mass transit necessitates high performance, high reliability, ability to cope with passenger flow of 40 passengers per minute and smooth passenger flow even during the peak period, etc. Table 1 provides the transit acceptances.

 

 Table 1: Transit acceptance criteria for NFC

Parameter 

Acceptance criteria 

Unconfirmed transactions

<1.2%

Failure to detect CSC

0%

Card transaction time only

<140 cms

Detection range

0 to 8.5 cm

Source: Singapore LTA

 

Singapore’s experience reflected that the effective maximum range was up to 10.5 cm with no failures for approved cards, up to only 4 cm for newer handsets, and up to 2.5 cm for older handsets.

 

The areas of concerns that emerged during the pilot are noted as follows:

 

 -          Increase in waiting time

-          Variation in transaction time based on several factors including the Java platform, key length and user interface

-          Involvement of too many stakeholders

-          Need to accept many types of e-wallets and options (eSE, NFC SIM, HCE)

-          Differences in performance among handsets

-          Slow performance (< 1 second transaction time)

-          Gate freeze, handset freeze and few rejections

-          Display intermittent error message by gate transaction machines

-          Handsets hanging user interfacing device or themselves.

 

Nina Ive, Head of Sales and Marketing, Snapper Services Limited shared the company’s experience with extending a traditional card-based ticketing scheme to a new generation ABT model.

 

The new ABT system has the following features:

 

-          Designed for iOs, Android and web users

-          Supports multiple payment options

-          Based on account-based architecture

-          Deployment in the cloud

 

The solution aims to leverage the existing card-based infrastructure and require no major change. The key difference is that passengers are charged after the journey is over and not prior to start of journey.

 

The existing security processes are used to authorise the card, transactions are securely passed through the account-based channel, and the best fare is calculated on the basis of fare policy. It is possible to provide fare discounts for special-category passengers and use limited-validity passes.

 

Snapper has plans to undertake system trials in the next few months.

 

Joerg Schmidt, Co-Chair Transport SIG, NFC Forum spoke of the initiatives of the NFC Forum in the harmonisation of globally relevant contactless standards for NFC mobile devices. The NFC Forum Transport Special Interest Group (SIG) coordinates transport industry stakeholders. 

 

The NFC Forum has enabled the following to promote interoperability:

 

 

 The other achievements of the NFC Forum include the following:

 

 

Trevor Findley, Managing Partner, Clevor Consulting Group spoke about the experience in the United States (US). In the US, there are 6,792 transit agencies, 5,231 card issuing banks (1.1 billion cards issued and 453 million active accounts), and five mobile network operators (417 million mobile subscribers). The transit agencies vary vastly in the deployment of ticketing technology.

 

Table 2 provides comparison of different fare systems deployed in the US.

 

Table 2: Disparity in fare system technology deployment in the US

Fare media

Category

Fare system/metropolitan area

Cash, tokens, paper tickets, magnetic tickets

Legacy systems

New York Metropolitan Transportation Authority (MTA)

First generation smartcards

First generation systems

Charlie Card (Boston), ORCA card (Seattle), Clipper Card (San Francisco), SmarTrip (Washington, D.C.), TAP Card (Los Angeles)

Contactless open payments, visual and bar-code mobile ticketing

Next-gen systems

Chicago (Chicago Transit Authority), Portland (TriMet)

Closed loop NFC

-

None

Source: Clevor Consulting Group 

 

Most transit agencies in the US are moving towards NFC-based fare systems, but the path differs based on their current situation.

 

Legacy Systems have the most straightforward path to a greenfield implementation. First-generation systems have to choose between upgrade or “burn and replace”.

 

Agencies using non-NFC mobile ticketing can use NFC to gain the following advantages:

 

 

Cybersecurity in Smart Ticketing

 

Paul Gwynn, Managing Director, INIT Asia-Pacific stated that while eliminating cyber threats is impossible, transport organisations must take a full-spectrum risk based approach.  

 

Cyber security is not an information technology (IT) department problem, it has manifested to become a critical management issue that requires engagement at the executive level and implementation at all levels of the organisation.

 

Cyber security risks must be assessed similar to legal, regulatory, financial or operational risks. This can be achieved by embedding an information risk management regime across the organisation, which is actively supported by the Board, senior managers and an empowered Information Assurance (IA) governance structure.

 

Developer/Operator Experience from India

 

There were three presentations in this session.

 

Sunil Mathur, Director (RS & S), Maharashtra Metro Rail Corporation Limited (Maha Metro) spoke about plans for deployment of open-loop smartcard ticketing system for the upcoming 38.2-km Nagpur Metro Rail Project.

 

A common mobility card, mobile app, and digital wallet will be deployed for all modes of transport in the city.

 

The private consortium supplier will have the exclusive rights to issue cards to commuters and receive 4 per cent fare-box revenue share.

 

Maha Metro will not make any capital investments in the fare system (leading to saving of INR2.5-2.6 billion) and will not bear any maintenance cost for 10 years. In addition to fare-box revenue, Maha Metro operator will receive a share from other transit and non-transit transactions and a premium from the private consortium (INR300 million for 10 years). 

 

Bibhudatta Mishra, Head-AFC, L&T Hyderabad Metro Rail Limited spoke about the closed loop AFC system deployed for the Hyderabad Metrorail system. Samsung SDS is the system integrator. Migration to the open loop payment system is planned, which has been designed in 2017.

 

Mahesh Savkur, Chief Telecom Expert / General Consultant, Lucknow Metro Rail Corporation spoke about maximising revenue from non-fare box and advertising in public transport. The closed-loop AFC System of Lucknow Metro is designed and implemented by a consortium of Datamatics and Mikroelktronika.

 

Some of the funding sources adopted by transit operators in India for non-fare revenues include leasing of commercial spaces, parking charges, station naming rights, space for telecom operators, leasing optical fibre to telecom operators, air space commercialisation, royalty for access, tying up with Uber/Ola for last mile connectivity, etc. 

 

New Standards and Technologies

 

Joerg Schmidt, Chair of the Marketing Working Group, OSPT Alliance spoke about CIPURSE and EMV in AFC – one application and different solutions.

 

The benefits of CIPURSE include the following:

 

 

EMV is an open standard requiring bank account. CIPURSE is an open standard for multiple applications and can be used in various form factors (mobile HCE, paper tickets, cards, wearables, etc).

 

While there is no major difference for the end user, CIPURSE has a more extended reach (ability to serve unbanked customers) and enhances mobile ticketing. CIPURSE and EMV can co-exist.

 

Conclusion

 

The conference provided a platform to discuss the current status of and future outlook for transit ticketing in Asia Pacific, which is one of the biggest markets for upcoming metro rail, light rail and BRT projects. Cities with new systems are directly deploying advanced fare collection technology and cities with legacy systems are moving towards advanced and integrated fare systems. These trends offer many opportunities for advanced fare collection technology providers and vendors.  The third annual conference for Transit Ticketing & Fare Collection in APAC will be held in 2018 in Singapore. Please contact Global Mass Transit for further details and interest in speaking and sponsorship opportunities!