A showcase in ticketing

As Transport Ticketing Global celebrates its tenth year, James Day reports on the latest developments in payment technology on show.

Returning to Old Billingsgate in London for the second year in a row, Transport Ticketing Global once again drew a large delegation from all over the world, with attendees from as far afield as North America and New Zealand.

This year, account-based ticketing dominated discussions, with many talks and presentations on how cities around the world are attempting to implement a highly integrated transport network powered by smart, digitised ticketing. Contactless, or EMV, saw a lot of praise, though many speakers were quick to state that it is not at the stage of making other forms of ticketing obselete, such as smartcards.

Host Card Emulation (HCE), where a smartphone operates as a smartcard, was also brought up several times, though the technology appears to be being held back by Apple handsets, which seem to be behind Android in this respect.

What follows are some of the highlights from the first day of the two day event, which CBW attended.[wlm_nonmember][…]

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Digital rollout in the UK

After an introduction from Jessica Williams of event organisers Clarion Events, proceedings were opened by Fiona Walshe, Head of Passenger Experience and Policy at the Department for Transport. She highlighted the progress in ticketing technology adopted by Transport for London (TfL) over the last decade.

She said: “Passengers on TfL services can use their contactless bank cards to pay for their services with the most appropriate fare. Excluding season tickets, around a third of journeys on the TfL network are made using contactless.

“This provides a simple and flexible consumer offer to those who are able to make use of it.”

Fiona said that mobile ticketing is expected to become significantly more prevalent outside the urban areas of the country, with the first trial of ITSO Mobile expected in the coming months.

She continued: “Looking further into the future, once we have widespread acceptance of digital tickets across the network, the possibilities for future innovation are expanded, which is the area of work I find particularly interesting.

“The concept of account- based ticketing continues to gain momentum, as evidenced by Transport for the North’s ambitious multi-modal plans. One of the DfT’s priorities is to improve the quality of journeys, and it is easy to see the benefits of a single point of purchase and a single ticket for a multi-faceted journey.

“By tailoring a travel account to an individual, the service offer can be customised to improve the ticketing experience with the passenger. This could extend benefits to the passenger, such as targeted discounts and improved information on their travelling habits.”

During questions after Fiona’s presentation, CPT’s Steve Salmon drew a laugh from the crowd when he asked: “One of the Hatton Garden bank robbers was caught because he went to the job with his own bus pass. What’s the Government’s vision for the future of anonymous travel?”

“The interesting thing when you look at generational differences is how prepared people are to share their data with companies and Government,” Fiona replied. “Young people are generally more prepared to share data.

“It’s a balance between being able to travel easily against the necessary protections we all expect.

“There are data protection laws out there, though I’d say if you’re commiting a crime and using your bus pass, it is your own account,” she mused.

Keynote Presentation – value of time

The morning’s keynote presentation was provided by Aaron Ross, Managing Director EMEA for Vix Technology.

He began: “The consumers we all strive to serve have many and varied requirements. I want to focus on just one of them – time.

“Time is inherently short in supply. It comes sharply into focus as we and the ones we love approach the final stages of life, when it becomes something we strive to acquire, almost at any cost.

“Yet on a day-to-day basis, time is rarely such a focus and is allowed to tick away, until suddenly a trigger reminds us that it is being taken for granted.”

Aaron described a time in his childhood when he and his family went out to buy his first school shoes, and left a shop because of slow service. He said he ‘quite literally talked with his feet’ and had learned the value of consumer power.

“If the hypothesis that time is a commodity in short supply is true, then it follows that time is expensive. If you take it for granted, customers are not likely to be happy. The indirect costs in brand loyalty and reputation is potentially substantial.”

While payment has developed recently to allow customers to pay very quickly, Aaron noted that there can still be extensive queues at ticket machines, and by extension during bus boarding, though the adoption of EMV in transport had ‘exceeded all expectations,’ and highlighted the company’s success with Stagecoach.

“At Vix, we have some of the fastest ticketing processing technology on the market, and pride ourselves on the ability to handle extensive volumes of transactions in real-time and accounting for every cent.”

Aaron spoke about Vix’s investment into cloud technology, and said the company is enabling any authorised third party to make use of it.

“This enables us to make a unique promise to our customers – we’ll never be the bottleneck.”

INIT – In use with National Express

INIT announced at the event that its EMV system is being trialled by National Express in Coventry.

The system is being used on bus services which serve the University of Warwick campus, tapping into the student demographic likely to try new technologies. The system will support aggregated and capped fares.

Pawel Obszynski, Account and Project Manager at INIT, said: “The service is a powerful combination of account-based ticketing, fare collection and an automatic vehicle location and control system. Its open architecture and cloud-based approach also enables third-party integration.

“With EMV, better operational management can be achieved through integrated operations and fare management structure. As well as EMV, more fare payment options are available, through ITSO smartcards, mobile tickets and NFC phones.

“The system also provides a high level of security and pricing equity for passengers.”

 

 

Mobility as a Service – a faraway dream?

The first panel of the day discussed Mobility as a Service (MaaS). Moderated by Claire Maslen of Consult Hyperion, it featured Kevin Ayton, Future Ticketing Technical Advisor for Great Western Railway; Marius Macku, Senior Associate, Public Policy and Government Relations EU, Uber; Maria Rautavirta, Senior Engineer, Ministry of Transport and Communications Finland; Will Judge, Vice President Urban Mobility, Mastercard; and Suben Govender, Technology Specialist, eThekwini Transport Authority.

Concerning the questions of whether MaaS is a faraway dream, Will Judge was first to answer: “We could start by looking backwards rather than forwards, and thinking about the unifying goal. I think it’s reasonable to suggest that most people are striving to deliver a transport system which is at least as good as the car, if not better. I think we have had a terrific record of success doing this over the last 10 years.

“There is a lot more we could do to achieve the objective of implementing various integrated forms of transport for the consumer. When we talk about integration, it could potentially mean a very wide set of impacts on a transport service, such as integration of pricing, tariffs, product design, customer service, digital information and tools and so on, which all needs to be knitted together. The subject is vast, but the goal is a valid and attractive one.”

Kevin was asked how far away Great Western Railway was from being able to embrace integration: “We cover pretty much every type of rail travel in the country, from long distance commuting on fast trains, to rural services. Alot of other operators don’t, but we have the entire mix.

“The concept of MaaS – we could be very close in terms of retail. In London the Oyster concept has revolutionised transport and other cities are catching up.

“Customers don’t always start their journey by train, they will usually take a taxi or a bus at either end. The thing that concerns me is who supports the customer? With MaaS, the integrated booking is the easy bit. The problem is, in a rural area a bus the passenger needs might operate twice per day, and most of the day might be gone by the time the passenger is able to reach their destination. The rail ticket might be the middle part of their journey and though we’ve delivered them to their destination, the overall journey is not what the passenger wants.

“Who supports the passenger through times of disruption and so on is something we really need to get to grips with before we deliver the performance the customer wants.”

Acknowledging the company’s status as a market disruptor, Uber’s Marius Macku was asked about the importance of partnership with traditional public transport operators, He responded: “I think it’s absolutely key.

“At Uber we have a simple vision, which is about making affordable, accessible transport available to everyone, or in other words providing alternatives to car ownership.

“It would be delusional to think that cars will replace high capacity mass transit. It’s something that simply wouldn’t work. However if you look around while on the road around the world, you’ll see an average of between 1.2 and 1.6 people in each car. It is an incredibly underused asset.

“All this individual car use causes congestion, the cost of which is immense. We really do have an interest in getting people out of their cars and guiding them towards public transport.”

Marius explained that public transport provision can work in Uber’s favour, not compete against it. He said that while the company expected the launch of night tube services in London to affect its business, in reality more people were able to travel into the centre of London from the outskirts and use Uber cars there.

“The better public transport is, the better it is for our business, and vice-versa.”

ITSO Mobile approaches

ITSO was continuing to promote ITSO Mobile, which is expected to launch in the next couple of months.

The service will emulate a smartcard on a smartphone, and claims to be as secure as a traditional smartcard.

Julie Liburd, Marketing and Communications Manager at ITSO, explained: “We are working with a global payment provider and some key operators to provide the service.

“Unlike current ITSO smartcards, where we are providing a certification for companies to follow, with ITSO mobile we will be delivering part of the ticket fulfillment service ourselves.

“For bus operators who have already invested in ITSO-certified infrastructure, we expect that there will be no real cost for them to provide ITSO mobile. The operator may also save money from no longer needing to issue smartcards to some customers.”

ITSO Mobile will initially provide mobile payments through Android Pay, though the organisation is working with other handset manufacturers.

Parkeon – bringing contactless to Lothian

Owen Griffith, Managing Director of Parkeon Transportation Worldwide, explained that the company is further building on its contactless payment systems.

“A lot of people still want to use cash, but it’s important to give them the choice to use cards,” he said. “Doing so will encourage more people to use the bus, since many people prefer not to carry cash.

“With account-based ticketing, operator who gain more data for their analytics, which allows them to better understand their customer base. This allows them to provide special offers, promotions, more targeted marketing and to adapt
their services.”

Lothian Buses is trialling Parkeon’s contactless technology on its Airlink service. The operator has been a Parkeon customer for 30 years.

 

 

 

Giving passengers what they want

Regular speaker Mike Szikszai, CEO of New Zealand-based Snapper, shared how the company ‘gives its customers what they want,’ providing insight into its account-based ticketing.

In its home turf of Wellington, Snapper has issued over 700,000 smartcards, for accounts which work with taxis, on-street parking and urban transport. He explained that the company has increased the number of payment channels open to customers, allowing multiple payment options.

“Over time, we’ve seen a significant shift in how customers pay, driven by customers’ preference for self-service,” Mike said. “In five years, we’ve seen payment at retail kiosks drop from 96% to 60%.

“This tells us customers want to top-up and purchase tickets in the most convenient way for them. Naturally, we want to take that further.”

Mike said the take-up of account-based ticketing is slow, because cities are telling Snapper that they have plenty of life left in their existing systems.

“We found there is a real gap in market research, and little documentation on those who have made the shift to account-based ticketing,” he explained. “Most literature is from a vendor’s perspective, rather than a transport authority’s perspective. We decided to undertake the research ourselves.”

Snapper’s research showed a number of benefits which authorities were seeking. The first was a cost benefit, because there was less need for expensive retail sales points. They were also seeking easier integration with other technology, more convenience and the flexibility to have promotional fare types.

Challenges were also identified. The system takes a long time to implement, with most respondents telling Snapper that the process was longer than anticipated. Latency was also an issue, causing slower transaction times. There was also the issue of the cost of supporting the legacy system which the new system will eventually replace.

“None of these challenges are insurmountable, and all can be overcome with time,” Mike said. “However we didn’t want to wait, and challenged ourselves to leverage our existing card system, to try to install the new system in months, not years.

“The answer given to us by customers was the development of a fully digital channel. Something designed for multiple handsets and payment options, which did not require a system replacement.”

The new Snapper system Mike described allowed customers to sign up with existing credentials or make a new account and manually resolve issues such as locking a stolen card or correcting an instance of forgetting to ‘tap out’ at the end of a journey, avoiding a fine.

“It’s all about ensuring a flawless trip for the customer, and putting the control of that trip in their hands.”

 

The success of contactless

Visa’s Head of Contactless and Transit, Nick Mackie, spoke about the economic value of digitising cities, and specifically digitisiting ticketing in public transport.

He highlighted the cost of cash handling faced by operators, which he stated was several times more expensive than handling digital payments once the infrastructure is in place, and that contactless is becoming normalised, with more than half of all face-to-face payments in the UK now taking place through the new technology.

The presentation highlighted how contactless improves passenger flow, with no need for queueing at kiosks or the driver’s compartment to buy tickets or credit. With passengers using their own bank cards, they will not run out of credit unless their bank balance is depleted, resulting in fewer delays from passengers who forget to top up.

“EMV delivers a service which can drive up customer experience and make the service more accessible,” Nick said. “It also provides huge benefits to the transport operator in terms of how they can manage their costs and drive them down.”

Nick showed a testimonial video, with positive feedback from TfL, Stagecoach Manchester and Lothian Buses, with praise for how the system drives patronage and provides greater control.

Nick acknowledged that EMV has been a challenging system to implement, but said the company is making it easier for cities around the world to adopt ‘London style’ ticketing.

Do subscriptions work for MaaS?

Josh Nicklin, Head of Business Development at Masabi, spoke about whether account-based ticketing was preferable to subscription to delivering MaaS.

He said: “Cities and their transport authorities are responsible for enabling mobility for all. The rise of private operators is driving innovation, but cities cannot accommodate more cars and many of these operators are car-based.

“Many transport authorities are facing budget pressures, declining ridership and increased competition for riders of choice.”

Josh said that a subscription model is a common idea for tackling MaaS, and he said a term he regularly hears used which he find pervasive is ‘MaaS is the Netflix of public transport.’

“I think it’s quite instructive as the way to think about the problems of a purely subscription-based model,” Josh said.

“I have a Netflix subscription, but I also have a NowTV subscription, because Netflix doesn’t have everything. I also have Amazon Prime, and I get my main TV through Virgin Media. These are digital goods, and should be really easy to aggregate and supply through one single digital platform, but for some reason you can’t do that.

“What is it that makes us think we can do all mobility options through one single mobility service provider? To me, that doesn’t seem like it is going to be the case.

“Pre-paid transport probably favours people who are well served by transport already. It is a barrier to people who do not use it already. MaaS subscriptions do fit a niche, but should those two things be synonymous with each other?”

Josh said account-based ticketing broadly works by having a token to travel, which should ideally be something customers already carry with them, and should work be aggregating the trips they have taken and providing the best available fare.

“That means you are able to seamlessly tie together a range of multi-modal services and hide that complexity from the customer. That feels to me much more what MaaS should be about.”

Siemens – the next step in automated payments

The next step in automated fare payment was the focus of the Siemens stand, which was showing its SiMobility JustGo system.

The system utilises Bluetooth technology on smartphones, combined with the BiBo app (Be-in/Be-Out), to allow a bus or train to detect when the passenger boards. This means there is no ticket purchasing process and potentially no barrier for passengers to go through, or even any necessity for them to tap a smartcard or phone. The system detects the passenger’s phone through the app as they bought the vehicle, without the device even needing to be taken out of a bag or pocket.

The system is available for account-based systems, and like other similar systems, costs can be deducted from the passenger’s account after the trip is completed, with passengers automatically given the best price available for the journey they undertook.

The system is currently being trialled with Swiss rail operator Swiss Südostbahn AG (SOB).

The best smart ticket?

Towards the end of the day, a panel discussed and compared the merits of mobile applications, HCE wallets and smartcards. It was made up of Jonathan Donovan, Chief Product Officer for Masabi; Ian Longworth, Director of Public Transport for the Isle of Man Government; Richard Moore, Product Manager at Rambus; and Joerg Schmidt, Co-Chair of the NFC Forum Transport Special Interest Group.

Richard Moore was asked to what extent differing ticketing technologies are opposed to each other. He responded: “There are lots of technologies competing for dominance and space. We need to look upon each of those as having its own benefits.

“It’s a balancing act, but you’re also not looking to have such a plethora of options that the customer is confused. That’s a difficult thing for operators to do.”

Jonathan Donovan added: “From our perspective, if you have a well-designed account based ticketing system, it doesn’t matter what the ticketing is – mobile, smartcard or otherwise. However, the fact is that mobile ticketing works across all smartphones, using a QR code on the screen. You have ubiquity there, whereas HCE has challenges with Apple in supporting that technology along with the divergence in Android, while smartcards cost money to issue.

“For our perspective supporting a variety of formats has the most value, though utilising what passengers have in their pockets already has the most value.”

The panel was asked what the key success factor is in making the right decision.

Ian Longworth replied: “The first thing you need to do is find out who your customer is, and within that base there is market segmentation.

“From a standing start three years ago we now have 63% of our passengers using smartcards, but when we started to look into it we found that there was a rush of cash passengers between 1730 and 2200hrs. When you go out and find who those people are, they are 16-35 year olds.
“We’re going to try mobile ticketing and EMV cards, and we’ll have to see which of those attract that market.

“On the Isle of Man there is also tourist market which we need to connect with. Do I take the money off them before they get to the pub, or do I use an account-based system to charge them when they get home?

“You need to understand clients before looking at the technical options available.”

Joerg Schmidt was asked whether there were new business opportunities for smartcards, since they are often thought of as aging technology. He replied: “If you think the smartcard is dead because of mobile, I have to disappoint you – it’s not going to happen. We just have to make sure we’re able to combine the technology with digital. We have a lot of new approaches for account-based ticketing.

“Because smartcards have been developed for this kind of application, why should we get rid of a good and working system?”
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