Ticket in a tap – the rise of contactless ticketing

12 September 2016

Contactless ticketing has become widespread among the world’s rapid transit systems, but what’s next for fare management, and what will it mean for operators and passenger convenience? Urban Transport Agenda finds out from Michael Gwinn, director of revenue at Chicago Transit Authority, and Chris Tucker, director of revenue operations at the Tri-County Metropolitan Transportation District of Oregon.

It’s a cold, wet Monday morning and you’re running late for work. You dash down the road and into your local rail station, but as the train pulls up to the platform, you realise you don’t have a ticket. At the vending machine, just yards away, people are queuing up agitatedly, one by one punching in their credit-card numbers and fumbling for loose change. The train chugs away into the distance, without you.

A few hours pass and you’re leaving work to meet some friends for lunch. Outside the office, your bus pulls to the curb. As you step on board, you realise that you’ve run of money on your travel card. You start scrambling around for change in vain before the driver curtly orders you off. The bus clatters down the road, leaving you behind again.

When Chicago Transit Authority’s (CTA’s) new mobile app went live in November last year, it quickly became the number-two trending search on the Apple App Store. To date, it has been downloaded 820,000 times and, for anyone familiar with these two scenarios, it is easy to understand why. Among a host of new functions, the app allows customers to buy tickets for the train and replenish smart-card accounts on their phones. In one fell swoop, the days of missing trains and buses, and queuing in the cold at packed ticket machines, appear to be over for Chicago’s public-transport users.

All about the apps

“What the app does is give customers immediate, real-time management of their account,” says Michael Gwinn, director of revenue at CTA. “That means you can check your balance, make purchases and top up; and it even gives you push notifications if your balance gets low or your pass is about to expire.”

As well as providing convenience for the people of Chicago, the app is a sign of just how far things have come in the world of transit ticketing. Not too long ago, ticketing systems were predominantly based on cash and paper: either you bought a ticket on board with physical money, or you got a paper ticket in advance from a machine or retailer.

"In London, TfL has open payment but information is still written to the card itself. With us, all of that pricing, all of the computing and managing of fares, exists in the cloud on the back-end."

The advent of contactless smartcards changed that model. Armed with Oyster cards and Metrocards, transit operators were able to reduce labour costs and mitigate fraud while passengers could enjoy the convenience of having a single, reusable ticket. But smartcard technology has its drawbacks, too. As a closed-loop system, operators face significant upfront infrastructure costs and customers are denied the payment flexibility they so desperately crave.

Today, signs suggest that things are beginning to change. Over the past few years, a number of new ‘open-loop’ ticketing systems have been launched that allow passengers to dictate how they want to pay. In the US, Utah was the first transit authority to deploy a fully open-loop contactless fare-collection system, in 2009. And in 2011, Chicago broke records with Ventra, an open-standards system that was the largest automated-fare-collection contract placed in the US.

“The biggest reason we went to Ventra was obsolescence,” says Gwinn. “We had a chip stock that was no longer being manufactured in some of our contactless cards and equipment that was approaching 20 years old. It was an opportunity to get a brand new system.”

The Ventra system has two main benefits, according to Gwinn. Firstly, it offers the flexibility of an open-payment system. “You can use a specific transit-only Ventra card and any kind of open, contactless payment,” he says. “When we launched, there were contactless bank cards, and they have been supplanted by mobile payment. Anybody with Apple Pay, Google Pay or Samsung Pay could use that on our system. Open payment is a great way to remove barriers for people to pay without having to take the steps of getting a specific fare card.”

Secondly, Ventra uses an account-based model, meaning passenger data and stored value is moved from the card to the back-office alongside fare policy, pricing and products. That gives CTA the ability to manage changes more easily, and affords customers greater security and convenience. “This part is really important, and where a lot of the benefit and innovation comes from,” says Gwinn. “In London, TfL has open payment but information is still written to the card itself. With us, all of that pricing, all of the computing and managing of fares, exists in the cloud on the back-end.”

System spreading

Other transit authorities are following suit with similar systems. In 2017, the Tri-County Metropolitan Transportation District of Oregon (TriMet) will unveil a new open-loop electronic fare system called Hop Fastpass. “It will bring even more options and flexibility for our riders,” says Chris Tucker, director of revenue operations at TriMet. “It will work with a fare card, smartphone (using our app or services like Apple Pay, Android Pay and, likely, Samsung Pay) or your credit or debit card. Plus, it will be implemented aboard TriMet, C-TRAN and Portland Streetcar, our regional transit partners. Supporting open payments makes it seamless for people visiting the region or occasional riders as they can use a contactless bank card that’s already in their pocket, purse or smartphone – just as they can at other merchants.”

TriMet’s new system comes after the introduction of smartphone ticketing in the district in 2013. It was the first transit agency in the US to implement a genuinely multimodal mobile ticketing system that could be used across its entire transport network.

“Other transit agencies had launched mobile ticketing for rail before, but we were the first to make a multimodal system available on TriMet buses, light rail, streetcar and commuter rail lines,” Tucker says. “Our TriMet Tickets app allows riders to buy tickets anytime, anywhere. As our app use has gone up, we’ve seen drops in all other fare-sale channels, including at ticket vending machines, fareboxes and retail outlets. This has reduced service calls for ageing and more expensive fare-collection equipment. July 2015–June 2016, mobile ticket sales made up about 14% of our fare revenue.”

"As our app use has gone up, we’ve seen drops in all other fare-sale channels, including at ticket vending machines, fareboxes and retail outlets. This has reduced service calls for ageing and more expensive fare-collection equipment."

When asked about the future, Tucker is clear that mobile ticketing offers some of the most exciting opportunities. “Our goal is developing and implementing fare collection systems that best meet rider and agency needs,” he says. “Of particular note, we envision a future where there is a virtual Hop Fastpass card loaded to mobile wallets on smartphones (similar to the Starbucks card, except we would use near-field communication, not barcodes). This would provide all of the Hop Fastpass benefits virtualised inside a smartphone; there would be no need to carry a physical card.”

Fast fare access

In Chicago, Gwinn has a similar aim for the Ventra app. “The really exciting frontier for us is when you combine the app with a closed-looped transit-only credential that gets loaded onto the phone, called a Virtual Ventra card. You could provision a Ventra Card into Apple Pay and make sure it’s always on, so you don’t have to log in or unlock the phone. You could be on Facebook, walk up to the gate, tap the gate and be let in. That’s what’s really cool.”

In the past, the need to move hundreds of thousands of people a day through fare gates held back technological changes like these in the transit industry. But as more operators introduce new kinds of systems, the benefits are becoming harder to avoid.

“Whenever I talk to other transit agencies, I say that the transition to an account-based system, even with all of the challenges we had at roll-out, is 100% worth it,” says Gwinn. “I think that’s the way to go for enhanced customer convenience, interoperability, flexibility and scalability.” 

A screenshot from the Ventra app.
Work to install the elements of the Hop Fastpass will include platform closures, but the Rose Quarter Transit Center Station will remain open.
TriMet will unveil its Hop Fastpass fare system in 2017, with virtual cards loaded on smartphones for easier, faster operation.

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