Automated Fare Collection System Market: Core Technologies & Applications
As a computerized version of manual fare collection, an automated fare collection (AFC) system entails a diverse range of components that automate a public transportation network’s ticketing system. The innovative system is typically the foundation for integrated ticketing, comprising a smartcard-based contactless back-to-back solution for fare collection as well as payments. According to Inkwood Research, the global automated fare collection system market is estimated to grow with a CAGR of 11.63% during the forecast years of 2023 to 2032.
Automated ticketing systems enable operators to execute variable as well as flexible fare plans based on time, means of travel, or type of commuter. In addition, it also equips operators to cater to the demands of passengers through the customization of travel fare options, such as unlimited ride passes, discounted passes during off-peak periods, free intermodal transfers, and other modes.
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With the growing advantages of enhanced convenience and minimized operational costs, commuters, consumers, and operators alike are rapidly transitioning to automated fare collection systems from conventional ticketing solutions. While these systems help operators avoid manpower expenses and cash leakage, it also enables customers to avoid fare-related frauds and subsequently avail of efficient transaction processes.
Moreover, the rise in mass rapid transportation systems (MRTS), such as light rails, bus rapid transit systems, and metro rails, has led to unprecedented passenger volumes. This factor has created a significant need for smart, next-generation automatic fare collection system technologies. In addition, these systems and solutions also pave the way for more intricate operations and also minimize the risks associated with infections amid the novel coronavirus pandemic.
Aligning with this, here are the top three technologies projected to facilitate the rapid adoption of automated fare collection systems over the upcoming years –
- Optical Character Recognition (OCR) – Optical character recognition (OCR), also known as optical character reader, is the mechanical or electronic conversion of images of typed, printed, or handwritten text into machine-encoded text, whether from a photo of a document, a scanned document, or other formats. By eliminating the need to type in or write down information, optical character recognition enables inspectors to instantly scan passenger IDs and ticket barcodes, thus enabling a smoother transit process.
- Inkwood Research estimates that the optical character recognition (OCR) segment, under the technology category, is projected to record a CAGR of 11.89% during the forecasted years of 2023 to 2032.
- Smartcards – A smartcard is a credit-card-sized plastic board embedded with a microprocessor. The card is portable and easily fits in a wallet. Moreover, it only requires a connection to a battery or other power sources when read or written. Smartcards are preferred over paper tickets owing to their increased data-storage capacity as well as high levels of security encryption. In countries such as Australia & New Zealand, governments have significantly influenced the adoption of public transportation in order to aid the shift away from private vehicles via the implementation of smartcard ticketing.
- As per Inkwood Research, smartcards are expected to be the dominating technology in the global automated fare collection system market by the end of the forecast period.
- Leading players operating in the market, including Scheidt & Bachmann GmbH (Germany), are engaged in providing fare collection systems such as smartcard ticketing and ticketing software.
- Near-Field Communication (NFC) – Near-Field communication (NFC) entails a wireless technology that facilitates two-way communication between electronic devices. Over the upcoming years, NFC technology is projected to provide a secure system of fare collection and subsequently incorporate myriad capabilities, such as ease of use as well as minimized cash handling. Likewise, the reduction in cash handling, in addition to enhanced traffic control, is set to foster the demand for NFC predominantly in the avenue of public transport.
- Under the technology category, the near-field communication (NFC) segment is estimated to grow with the highest CAGR of 13.07% between 2023-2032.
Automated Fare Collection Systems: An Application-Based Perspective
Inkwood Research estimates that the global automated fare collection market is projected to capture a revenue of $21652.05 million by the year 2032, as the advantages of contactless payment systems gain traction, and transportation infrastructure continues to develop on a significant scale. For example, governments across the Asia-Pacific, including Japan, China, and recently India, have been focusing on enhancing the transportation structure as well as security systems, including the High-Speed Railway (HSR).
Aligning with this, the transport & logistics segment, under the application category, is expected to capture the highest revenue share of 54.86% by 2032. The automated mode of fare collection revolution in this segment is further fuelled by the surging adoption of bank cards as well as smartphones, thereby making the ticketing and transit process relatively seamless.
In essence, automated fare collection systems offer a significant advantage by aggregating tremendous amounts of data that can be utilized to optimize the operations of parking facilities as well as the media and entertainment industry. In this regard, while validators collect data on the number of passengers or demonstrate a user’s eligibility to attend an event, the data pool plays an integral role in improving the overall customer experience. Hence, owing to the shift in how users interact with technology, combined with the demand for easier-to-use and safer technologies, the global automated fare collection system market is projected to grow substantially during the forecast period.
Which are the key players operating in the global automated fare collection system market?
LG CNS, Atos SE, Dormakaba Group, Cubic Transportation Systems Inc, Lecip Holdings Corporation, etc., are among the key players operating in the global automated fare collection system market.
What are some of the major findings of the global automated fare collection system market?
As per Inkwood Research, the major findings of the global automated fare collection system market include customized travel fare options, efficient transaction processes, and reduced manpower costs.