Open loop fare collection has been successful in major cities, and is considered as the future of transit payments. It brings passengers the ease and convenience of using their contactless bank card or contactless-enabled device for fare payment without needing a ticket.

Riders love the simplicity of tapping their contactless emv card on a payment reader to board vehicles, with the correct fare charged automatically for their travel.

As more cities move to this approach, the ‘tap and ride’ payment experience is becoming universal. For riders, there’s no more worrying about having the right cash in their pocket or getting the best value ticket from a range of options. There’s no need to learn a new fare payment system when they visit a distant or overseas city.

Building a system from scratch

The passenger appeal is clear, and yet many transit agencies assume that the technology is out of reach. It’s too costly to build and deploy, and too complex to manage.

Traditionally, system integrators have delivered contactless transportation payment systems through a design, build, operate, and maintain approach. They have been built from scratch for a single transit agency to detailed specifications. The hardware is expensive, and projects can take years to complete. 

Once the system is live, it needs investment to operate, maintain and upgrade. With a contractual lock-in to a sole vendor, there is no scope for widening the net when procuring new hardware and this lack of competition drives prices upward. Upgrades can become a costly headache.

A new approach is needed

Breaking apart the pieces of an open loop payment system to three essential components – payment readers, payment processing platform and acquirer – it’s possible to create a modular solution that can be used by any transit operator.

The payment platform is the core and a range of hardware and acquirer choices can be integrated using standard APIs. The same system can be configured by each transit agency to meet their needs, using the certified hardware and acquirer of their choice. If needed, a back office (ABT system) can also be connected.

Modular approach versus system integration – comparison chart

Weighing up the pros and cons of alternative models of procurement for an open loop payment system, it’s important to consider the cost not just of the initial build, but of operating, maintaining and upgrading the system. For small and medium sized operators and agencies in particular, the modular route makes open loop fare collection accessible – simpler, cheaper and faster to introduce.