Most traditional transport ticketing systems are ‘Card Centric.’ This means the travel information and the right to travel on public transport is stored on or in the ticket. This is the same for magstripe paper or smartcard ticketing systems.
These ‘Closed-Loop’ systems, where the fare media is supplied by the transport provider, have been around for years and provide a robust solution in which transactions are primarily stored on the card and only secondarily in the readers and then in the local and/or central back-offices.
In recent years, thanks to advances in communications technologies, innovative transport providers have launched new transport ticketing systems that allow passengers to use contactless bank cards, mobile phones, wearables, or other IDs to travel.
These new technologies allow for ‘Open-Loop’ and ‘Account-Based’ systems. They provide a greater degree of convenience for passengers than ‘Card Centric’ and cash based ticketing systems, while saving transport providers money.
Account-Based Ticketing is defined by the Smartcard Alliance as: “The transit fare collection system architecture that uses the back office system to apply relevant business rules, determine the fare, and settle the transaction.”
Essentially right to travel is managed by the central back office and the ‘ticket’ the passenger has acts as a 'token' or proof of the right to travel and identifier of a customer’s account - hence, Account-Based. The back office stores the tokens usage patterns and also settles the transaction (based on usage). As such, the back office is the primary source of truth, unlike in a Card Centric system where, as described above, it is the card.
Because of this, passengers are able to use what they have in their pocket to travel, be it an cEMV contactless bank card, smartcard, phone or a smart wearable and the payment will link with their ‘account’ residing in the back office. This means passengers no longer need to buy a ticket or understand fares to travel, safe in the knowledge they will be charged 'best fare'; for their journey.
Account Based Ticketing systems are also better placed to take advantage of the advances in technology to run and scale more efficiently, with the back-offices often being managed from the ‘Cloud’.
For the transport provider the benefits are significant. With legacy Card Centric systems, transport providers have to act as a local currency, exchanging cash or card payment for a ticket to travel. These paper or smartcard systems are expensive to install and expensive to operate and update.
Account Based Ticketing allows transport providers to move to an ‘open loop’ system (open tokens such as contactless bank cards) and away from the cost of issuing physical ticket media and the cost of handling cash. (However, we would recommend using 'Open Loop' tokens and stored value accounts as detailed in this post, to ensure equity.)
Account-Based Ticketing is revolutionising the passenger experience because it is effectively a ticketless way of allowing people to travel. Instead of needing to select a fare and buy a ticket before traveling the rider simply taps their secure token. The amount of taps and location of these taps calculates the fare, which is charged to the passenger after they travel.
It's important to remember that having an account does not make a system 'account-based' and if passengers need to purchase a ticket before traveling (you can be pretty sure) it's not account-based.
Mobile ticketing can operate both as a traditional proof of payment style ticket (data on the ticket - suitable for last minute tickets) and also enable Account Based ticketing (static token & data primarily in the back office), allowing you to feed in and experiment with account based products as you move to full Account Based Ticketing.
Further reading:
Masabi’s Justride Platform
Masabi is bringing Fare Payments-as-a-Service to public transit agencies of all sizes around the globe. Through our Fare Payments platform, Justride, transport agencies and operators in cities of all sizes receive the latest ticketing innovations quickly, using a platform which is constantly updating and adding new features. This not only improves the journey experience for passengers but also helps transport agencies keep up with the pace of technology change while reducing the total cost of fare collection, meaning more money can be put back into running transport services.