Selecting the Right Fare Collection System: From Bespoke Systems to SaaS Platforms and the Modular Trend

The evolution of fare collection systems in public transportation has been marked by a shift from bespoke, design-and-build solutions to more agile, cloud-native platforms. This transformation has been driven by the need for cost efficiency, flexibility, and the ability to integrate with other services. As the landscape continues to change, selecting the right system becomes critical for transit agencies and transport authorities and operators looking to meet modern challenges and passenger expectations.

Here are some of the key changes and trends taking place and crucial to understand when selecting your next fare collection solution.

Trend 1: From Design and Build Systems to SaaS Ticketing Platforms

Traditionally, fare collection systems were built from the ground up to meet the specific requirements of a transit agency and transport authority/operator. These bespoke systems were inflexible, closed, and costly to implement, maintain and upgrade. The development of these systems was often a lengthy and expensive process, typically resulting in monolithic solutions that were over budget and years behind schedule.

This "build-to-own" model locked agencies into long-term contracts with single vendors, limiting their ability to innovate or respond to changing needs without incurring significant costs.
Recognizing the inefficiencies and constraints of these traditional systems, Masabi introduced a Software-as-a-Service (SaaS) platform for fare payments, known as Fare Payments-as-a-Service (FPaaS). This approach leverages the power of the cloud to provide a flexible, multi-tenant platform that multiple agencies/authorities can share, reducing costs and accelerating deployment times.

The Benefits of SaaS Fare Collection Platforms and Fare Payments-as-a-Service

A SaaS-based fare payment platform, like Masabi’s, offers numerous benefits over traditional bespoke systems:

1. Cost Efficiency and Scalability: By utilizing a cloud-native platform, agencies can significantly reduce the total cost of ownership. There is no need for costly design and build systems or extensive bespoke software development; instead, agencies benefit from shared infrastructure and continuous updates. A report by Consult Hyperion highlighted that SaaS solutions can lower operational costs and improve return on investment by eliminating the need for costly legacy systems.
2. Continuous Updates & Multi-Tenant Architecture: The key advantage of a SaaS platform lies in its multi-tenant architecture, which allows multiple transit agencies/transport authorities/operators to use a single platform while maintaining their unique fare policies and configurations. This shared environment means that all agencies benefit from continuous improvements and innovations without the need for individual, costly upgrades or to manage their own systems. It also ensures that best practices and security updates are applied consistently across the platform.
3. Flexibility and Faster Deployment: SaaS platforms enable faster deployment times compared to traditional build-to-own systems because the platform is already live instead of being built (or a shared code base copied and built upon). With advanced APIs and SDKs, agencies can quickly integrate the platform with their existing infrastructure, reducing the time and cost associated with implementation. This flexibility also allows for rapid adaptation to new technologies or changing passenger needs.
4. Open to Support Modular and Best-in-Class Solutions: As the transit ecosystem becomes more complex, larger agencies and authorities are increasingly looking for modular solutions that allow them to select best-in-class components from different providers. A SaaS platform like Masabi’s supports this trend by providing open APIs and SDKs, making it easy for agencies to integrate various technologies—such as payment gateways, validators, or data analytics tools—into their fare collection system. This approach reduces vendor lock-in and enables agencies to customize their solution based on their specific needs.

Trend 2: The Shift to Modular Solutions

The next trend in fare collection is the move towards modular solutions. Unlike traditional, vertically integrated solutions, modular systems are built from best-of-breed components that can interact and integrate with each other. This flexibility is essential for larger agencies that want to maintain control over their systems while also benefiting from the latest innovations in the market.

Modular systems are designed to be interoperable, allowing different components from various vendors to communicate seamlessly. By using APIs and SDKs, platforms like Masabi’s enable agencies to connect and integrate new tools, services, or data sources without costly overhauls. This openness fosters a collaborative ecosystem where new solutions can be added or swapped out as needed, keeping the fare collection system agile and future-proof.

A modular approach allows transit agencies to select the best tools for each specific function, such as validation, retail networks, or ticket vending machines. Rather than relying on a single vendor for every component, agencies can choose specialized providers that excel in their respective areas. This ensures that the overall system is optimized for performance, cost, and customer satisfaction.

Procuring SaaS Fare Collection Platforms and Modular Fare Collection Solutions

As more agencies move away from legacy, bespoke systems, procurement strategies need to evolve too. Buying a SaaS fare collection platform—or a modular, best-in-class system—isn’t just about issuing a traditional RFP and selecting the lowest bidder. It requires new thinking, a shift in structure, and a focus on outcomes over features.

Here’s how to procure for success in the era of SaaS and modular fare systems:

1. Design Your Procurement Around Modularity
Instead of issuing a single, monolithic RFP for an entire fare collection system, consider breaking it into lots or functional components (e.g., mobile ticketing, validators, back office, TVMs, etc.). This allows specialist vendors to bid on what they do best and encourages innovation.
Alternatively, structure the RFP to encourage consortium bids—bringing together multiple vendors who can collaborate to deliver an interoperable, best-in-class system under a unified architecture.

2. Procure for SaaS: Think Platform, Not Project
SaaS platforms like Masabi’s Justride are pre-built, tested, and proven. You’re not buying a custom system to be delivered in years—you’re subscribing to a continuously updated service. That means:

• You don’t need to specify how to build the system—just what outcomes it should deliver.
• You’re buying access to a live, working platform, not commissioning a new one from scratch.
• Procurement should reflect this with an emphasis on agility, configurability, and fast deployment.

Procurement Tips to Drive Innovation

Whether you’re buying a SaaS platform, modular system, or both—these tips, based on Masabi’s procurement best practices, will help ensure success:

1. Focus on Outcomes.  Define your goals—like reducing cash handling, enabling Account-Based Ticketing, or increasing accessibility—not rigid specs that stifle innovation.
2. Enable Modular Procurement. Allow for separate lots or encourage vendor partnerships. This reduces risk, fosters innovation, and avoids vendor lock-in.
3. Support APIs and Interoperability. Require vendors to integrate with other systems. Avoid “walled gardens” that lock you into a closed ecosystem.
4. Procure for SaaS, Not Custom Build. Ask for a working product, not a development project. Ensure platforms are configurable, not bespoke.
5. Insist on Vendor-Hosted Platforms (When Appropriate). Letting vendors manage their own infrastructure to reduce your burden, risk, and time to go live. Insisting on on-premise hosting will exclude innovative platform providers.
6. Don't require IP Ownership.  Multi-agency (Multi-tenant) platforms are not bespoke systems, so they can't hand over IP ownership. Any requirements around this without accepting alternative solutions will exclude innovative platform providers.

For a deeper dive into modern procurement, check out our full blog on procurement best practices.

Interested in learning more about which fare collection is right for you?

Check out our next blog in this series: Finding the Right Fare Collection Fit: Off-the-Shelf SaaS Platforms vs. Enterprise SaaS for Public Transit