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24-Sep-2019 13:55:25
by James Gooch

What is Fare Payments-as-a-Service?

Around the globe the Software-as-a-Service (SaaS) platforms have revolutionized industries, bringing leading solutions to companies of all sizes, quickly and cost-effectively. We now expect software to be available on a pay as you go (or subscription) basis, to update and improve all the time and to have the flexibility to switch provider if we are unsatisfied with the service we receive.


However, this trend has not yet taken hold in the Fare Collection industry (mobile ticketing aside), which is still dominated by Automated Fare Collection (AFC) providers offering bespoke and customized solutions that agencies purchase and are stuck with for years (sometimes decades) using a Design, Build, Operate, Maintain (DBOM) model.

Introducing Fare Payments as a Service for Public Transit


Design, Build, Operate, Maintain (DBOM) Bespoke Fare Collection Systems

A Design Build Operate Maintain approach to delivering a new system to an agency does exactly what it says on the tin. Each agency has to invest time and money developing what they need, getting a supplier to build a system for them (from scratch) to meet strict and detailed specifications set out in the agency’s RFP. The system then needs to be operated and maintained usually for a significant amount of time.


With a Design, Build, Operate, Maintain model for systems delivery, each agency purchases its own solution to fit bespoke specifications, using bespoke software and hardware. As a result, these systems are expensive to build, operate and maintain. They are also slow to deploy and updates are expensive and time-consuming (if they happen at all).


However, there are now multiple ways agencies can deliver fare collection technology to riders. These factors are rarely discussed as until recently there was no real alternative to delivering core ticketing services via a Software as a Service (SaaS) model using a platform with cloud-native infrastructure. However, today this is no longer the case, so it’s important to understand the different ways technology can be delivered to agencies and why these matter.


What is Fare Payments-as-a-Service?

Fare Payments-as-a-Service is a new and better way of delivering ticketing services for transit agencies and operators. Instead of needing to run a DBOM project and implement a bespoke solution, agencies can sign up to a Fare Payments platform and pay for services on a pay as you go/subscription basis. This enables the delivery of the latest ‘tap and ride’ innovations to riders extremely quickly and grow capabilities as they get released onto the platform, removing the complexity of running ticketing services. There are a number of Fare Payments-as-a-Service characteristics which are important to mention;

  • Subscribe, Go and Grow: agencies can subscribe to a fare payments platform taking the complexity out of buying, managing and updating their fare collection system. Agencies can be live with a proven platform in weeks and grow capabilities as the service expands.
  • Software as a Service Platform: each agency uses the same platform configured in different ways for different agencies needs, meaning the system is far more cost-effective, as well as being quick to deploy and constantly being updated. 


Fare Payments-as-a-Service holds a number of significant benefits for cities and agencies, these include:

  • Cost-effective: Agencies are able to reduce the overall cost of fare collection as the cost of supplying the service is less as everyone is on the same platform. Services are usually available on a percentage of ticket sales basis with reduced capital, maintenance and update costs.
  • Speedy: Once capabilities are added to a Fare Payments platform, existing subscribers can use the new functionality after their next update. It also means new deployments can be live in weeks instead of years.
  • Constant Updates: With a fare payments platform, new updates are delivered regularly, meaning all agencies on the platform get shiny new functionality enabling them to keep up with the pace of technology change.
  • Mobility as a Service Enabled: Fare Payments platforms help enable Mobility as a Service (MaaS) for public transit through SDKs and APIs linking tickets, fares and payments with other best-of-breed MaaS services. Agencies can also deploy Account-Based MaaS via Account-Based Fare Payments capabilities. This enables passengers to use a stored value account to tap across multiple operators, with passengers being charged ‘best fare’ post their journey.
  • Open Integrations: An open API architecture means fare payment platforms can link to existing (or new) systems and connect with other best of breed services. This helps make deploying Fare Payments platforms easier and allows the platform to connect with existing or new services, as required.
  • Account-Based Tap and Ride Experiences: FPaaS platforms deliver tickets to riders but they also enable the latest innovations for agencies by enabling account-based fare payments using a mobile phone, smartcard or contactless bank card - meaning riders no longer need to buy a ticket or understand fares to travel. The ultimate convenient passenger experience.
  • Future-Proof Roadmap: With a roadmap of new features and capabilities, a platform approach takes the complexity out of Fare Payments and allows experts to guide agencies on their ticketing journey, allowing them to concentrate on what they do best, providing safe, reliable and convenient journeys for riders.


Increasing Public Transit Ridership

From mobile to Account-Based Fare Payments, to enabling Mobility as a Service for public transport, Fare Payments platforms help increase public transit usage through increased accessibility, discoverability and convenience. We believe this, together with facilitating more money to be put back into running transit services and increased data insights, will help agencies attract more people to ride public transit services, reducing congestion and making our cities better places to live, work and visit.


For more information download Masabi’s Guide to Fare Payments-as-a-Service for Public Transit 

Written by James Gooch

Head of Marketing at Masabi.
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