Written by Richard Moore, Product Manager at Rambus
What is Account Based Ticketing (ABT?)
Account Based Ticketing (ABT) offers passengers a convenient tap-and-travel experience, with ticket purchases automatically calculated and charged after the completion of a journey.
This seamless travel paradigm frees customers from having to decide what ticket or pass to pre-purchase or buy at the station. For operators, ABT moves processing and calculations away from crowded gates, effectively shifting complexity from the front end to the back office.
ABT Benefits: Passengers
ABT can help build a future in which smart ticketing and frictionless travel are the rule, rather than the exception. In such a future, transit systems will automatically charge passengers the most appropriate fare based on a best value calculation. This is often referred to as the concept of a “best fare promise,” with the system always selecting the cheapest ticket for passengers – saving customers money by automatically buying a weekly, monthly, or annual season ticket rather than a lot of singles or returns. Beyond cost savings, an ABT implementation offers passengers a flexible travel experience, allowing them to conveniently alter travel routes on-the-fly. Last, but certainly not least, ABT eliminates the demand for “exact fare” on bus journeys.
From our perspective, ABT represents a stepping stone towards a frictionless, smart ticketing future, where beacons or other geolocation technologies automatically monitor passenger journeys and seamlessly charge customer accounts. There is no need for tapping at all – no taking a token from a pocket – no friction whatsoever. ABT is the first step in achieving this futuristic vision, as it provides the critical back office support required for calculating the necessary charges.
ABT Benefits: Operators
For operators, ABT involves a fundamental shift of business logic from front office devices to the back office, where infrastructure is cheaper and easier to configure and maintain. ABT also has the positive side-effect of making it easier and quicker to update business rules. These are typically enforced by a single back office system, meaning there is one location to update when rules change. In addition, there is no propagation to worry about, or maintenance of individual devices.
Finally, some of the tokens themselves offer additional benefits.
As an example, EMV tokens don’t have to be issued or managed by the operator, so these costs are removed for the operator – and indeed customers don’t have to apply for a separate token in advance. Moreover, registered tokens offer operators something valuable in return – information about a registered customer. By signing up and registering their token, the passenger and their travel history are linked to a single identifiable reference point. Operators can then add value for passengers and improve their travel experience.
Challenges
In addition to the above-mentioned benefits, ABT presents a unique set of challenges that operators and suppliers must face together. The first is the complexity of calculations for best-fare engines, which become more complicated when spanning multiple journeys, ticket types, operators and modes.
The second challenge relates to revenue protection. This is actually more of an issue for operators than suppliers, because it involves balancing whatever risks a scheme is willing to accept. Specific considerations include whether operators are dealing with registered or anonymous users. For registered customers, operators can institute some way of pre-authorizing who the users are, whether they are trustworthy and if they can be easily blocked. Indeed, operators can even institute a pre-pay model, or some type of deposit, to reduce the risk of non-payment. For anonymous users, there is obviously more of a risk involved with customers failing to remit payment. Here, operators may want to consider negotiating a risk sharing deal with the banks –as Transport for London (TfL) have done.
Deployment is another issue for operators to consider. As an example, operators can collaborate with suppliers to devise a way to implement ABT in stages, because a big bang approach to deployment is likely to prove challenging.
Lastly operators need to consider whether ABT will deliver an increase in profits or a reduction. Passengers will pay the same or less into the system than they do currently because their fares are optimized, and in addition the system will require an initial investment to deliver back office services and changes to front end devices. It is only through an expected increase in patronage that operators can hope to increase profits through ABT. However, it must be asked if this assumption is justified outside of major metropolitan areas with sufficient transport capacity and infrastructure to support an ABT model. Perhaps we are in the midst of an “if we build it they will come” moment – although this hypothesis needs to be tested with real-world deployments outside of cities such as London.
ABT: Link to Mobile
We could potentially see real ABT innovation when the technology is seamlessly integrated with mobile devices such as smartphones and wearables. Imagine an app that can be instantly downloaded and signed-into with an easy, intuitive account registration process. This will allow passengers to simply tap through gates, or integrate with beacons to travel with their mobile devices, effectively jettisoning the hassle of searching for or buying tickets and using a device that the customer already owns rather than needing to apply for and wait to acquire a new token.
ABT on a mobile platform also allows operators to provide instant feedback to customers on fares and charges. In short, when combined with mobile, ABT eliminates complex fare and ticket systems, removes the friction of a separate smart card and gets customers to where they want to go with as little hassle as possible.
In conclusion, Account Based Ticketing holds a wealth of promise, presenting a future vision of meaningful benefits for customers and operators alike. At Rambus, we are excited about that future and proud to be playing a part in achieving it.
