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Easy Ride: Increasing use of smart applications in global transit industry

October 16, 2014
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Taking advantage of the increasing popularity of smartphones and availability of Wi-Fi infrastructure and services, diverse industry verticals are developing applications to cater better to their customers’ needs. The transit industry is a prime example of a sector that has benefitted from the proliferation of smartphones. Transit system operators are moving away from traditional methods of payment, such as cash and paper tickets, and  are adopting a variety of electronic payment methods, including near field communication (NFC)-based mobile ticketing.

Smartphones are also being used in the transit industry to pay parking fee, provide real-time service information to customers, display interactive route maps and service schedules, report maintenance conditions,  set off alarms in case of an emergency, and access Wi-Fi at stations and in trains. Across the world, many transport providers are providing free internet access to passengers, enabling them to manage personal ticketing accounts, buy and reload tickets, view transaction history and access real-time vehicle schedule information.

Types of mobile ticketing

Mobile payments can be made through two key methods:

NFC-enabled mobile devices – In this case, the mobile phone is equipped with an NFC antenna and the buyer’s smartphone functions as a contactless payment card. Payments can be made either through a prepaid mobile account, a direct debit to a bank account, or a linked bank card (debit or credit card).

Mobile point-of-sale solutions (mPOS) – Under this, a mobile payment application is downloaded on the device. The application enables the device to function as a point-of-sale terminal and a secure card reader.

Ticket delivery schemes may use the mobile phone network to transmit either a text message description of a purchased ticket (SMS ticket) or a bar-coded ticket, which can be scanned by an instrument installed in buses or hand-held devices used by ticket inspectors. To purchase mobile tickets, passengers may have to send a message to a certain number to receive the payment receipt and the ticket.

Smartphones as smart wallets

Smartphones are also being used as e-purses and smart wallets, wherein the money is credited to the customer’s account through a bank account transfer. This transaction is typically done online and is PIN-protected; it is similar to a cash withdrawal from an ATM. In addition, the e-purse or smart wallet can be used to pay parking fees and make retail purchases.

Google Wallet is a special mobile payment system developed by Google that allows users to store debit cards, credit cards, loyalty cards and gift cards, among others, as well as redeem sales promotion offers/points on their Android mobile phones. Users receive instant notifications on their phones when they make a purchase. Currently, New Jersey Transit accepts Google Wallet payments on select bus lines and at Newark AirTrain station. Google Wallet is also accepted at New York Penn Station’s ticket vending machines and ticket windows, and at the Port Authority Bus Terminal.

Region-wise trends

The use of smartphones in the transit industry is most popular in the European and North American regions. NFC-based mobile ticketing is gaining prominence in these regions primarily due to the high penetration of smartphones, passenger demand for real-time schedule information, popularity of environment-friendly and convenient ticketing, availability of value-added services, high modal share of public transport, and free onboard Wi-Fi services.

To further explore the utility of smartphone applications, the European Union is funding a project, MobiCloud. The project aims to promote the use of mobile-based services using cloud technology and support the emergence of a European ecosystem of mobile cloud-based applications. It is a collaborative platform for developing, deploying and managing mobile cloud applications for business-critical scenarios such as public transport and field service or construction.

In its initial demonstrations, MobiCloud has developed an application for Swedish rail operator Tågkompaniet to allow maintenance staff to access a portfolio of services stored in the cloud. For Tågkompaniet, MobiCloud provides a resource visibility application (capable of finding the nearest colleagues), fault reporting application (allowing train drivers to document technical problems, attach pictures and assign to maintenance) as well as traffic disruption application (allowing staff to provide relevant information to passengers on board).

In Asia, Latin America and the Middle East and Africa (MEA), mobile ticketing is still at a nascent stage; however, it is gaining popularity with the ongoing development of modern public transport systems. In Latin America, Rio de Janeiro in Brazil became the first city to launch an NFC-based mobile ticketing pilot project in October 2013. In the MEA, only Dubai and Nairobi use mobile ticketing. In Asia-Pacific, mobile ticketing based on NFC technology is being used in China, Japan, Malaysia, Singapore and New Zealand.

As far as India is concerned, Indian Railways as well as most airlines are offering both SMS-based and application-based mobile ticketing services.

Conclusion

The availability of NFC-enabled mobile phone handsets and the development of infrastructure based on contactless technology have encouraged operators to deploy mobile ticketing. By 2017, one in three mobile phones is expected to be equipped with NFC. The estimated penetration rate of NFC-ready point-of-sale terminals by 2017 is about 90 per cent in Europe, 80 per cent in North America and Latin America, and 40 per cent in the rest of the world. This is expected to drive the growth of NFC-enabled mobile ticketing further.

 
 
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