17-Aug-2016 09:00:00
by James Gooch

What is ‘Open Loop’ ticketing?

The term ‘Open Loop’ references the fact that the ticketing system leverages existing open ‘tokens’ and processes that are not proprietary to the transport network in question.

 

For an ‘Open Loop’ system to work there needs to be a token available within the transport network’s ridership which is ubiquitous enough that a ‘token’ does not need to be issued by the transport provider (or media issuance is kept to an absolute minimum).

 

Two devices well suited to be used as ‘tokens’ in most Western cities today are smartphones and contactless credit cards (contactless EMV).

 

The level of ubiquity for smartphones is generally very high, being around 65-85% in Europe and the US. EMV contactless is more sporadic than the smartphone, in some cases being very high and others not yet in-market, but is growing in most regions around the globe. The smartphone has many different ways of communicating a token - from NFC to Bluetooth Low Energy and, of course, a screen which can be used to display a barcode.

 

The ‘tokens’ in a contactless EMV system allow the secure payment infrastructure put in place by the payment networks (e.g. MasterCard, Visa, American Express, Discover etc) to be used to uniquely identify individual customers.

 

Open Loop tokens are typically paired with an Account-Based back-office system to calculate the correct fare for a rider based on the travel patterns captured by the token’s use within the transit network.

 

Moving beyond contactless EMV and smartphone devices, an ‘Open Loop’ system can also support the ability for passengers to use other ‘tokens’ such as a library, student or national identity card to travel.

 

Open Loop, therefore, is the term for allowing passengers to use the items that are already in their pockets, such as contactless bank cards, mobile phones or other standardised media, as ‘tokens’ rather than having to purchase proprietary media (e.g. smartcard & paper tickets) to travel.

 

This simplifies the experience for the passenger, as there is no longer a need to queue for a ticket, and reduces the cost of fare collection for the transit provider as it no longer needs to issue and manage the fare media.

 

About Masabi and JustRide

With JustRide we are building a platform that is ready for the future of transport ticketing. While we provide mobile ticketing, we are effectively agnostic about whether or not mobile (be it barcode, NFC or BLE) is used as the ticket medium. All of our validation and back-end systems are architected to support all major transport ticketing technologies, while at the same time offering a clear migration path to full account based ticketing.

Learn more about JustRide.

Written by James Gooch

Head of Marketing at Masabi.
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Transport & Smart City Blog