In open loop fare collection systems, passengers use a contactless credit or debit card; mobile wallet; or prepaid EMV card, as their ‘ticket to ride’. Payment is issued directly from their bank or credit card account.
Passengers tap their contactless card, or contactless-enabled device, on a payment reader to validate it and access transport services. The tap is processed by a back office, which handles fare calculation and settlement.
If the transit operator configures fare caps, taps will be aggregated over a given period and fare caps applied, so passengers automatically pay the best value fare.
Top 5 operator benefits for open payments
1. Lower costs, greater efficiency
Open payment systems enable passengers to ‘tap to travel’ using their cEMV bank card or smartphone. Operators who switch to open loop transport payments as an enhancement or replacement for cash and closed loop systems can reduce the cost of cash handling, paper ticketing and smart card infrastructure.
2. High customer satisfaction levels
Payment simplicity equals better passenger experience – and that’s good for business. The rapid uptake of open payments in transport tracks growing consumer enthusiasm for a frictionless journey experience. In Belfast, after launching on buses, Flowbird’s account-based ticketing with open payments achieved one million journey taps within the first few months.
3. Minimal losses thanks to debt recovery
Open payments offer strong revenue protection. In the post-pay environment, if the payment can’t be settled, the card scheme takes the ‘first ride risk’ and guarantees to pay the operator. The tokenised card ID is placed on a deny list, which is updated every few mins, and a debt recovery process begins. Once debt is settled, accounts can be reinstated.
4. Better operational performance
A ‘tap to travel’ approach means no more passenger queues for tickets, leading to enhanced productivity – faster boarding and better schedule adherence. This ease of use, along with value from automatic fare capping, creates customer confidence that helps to boost ridership.
5. Enabler of seamless multimodal travel
Open payments are an enabler of integrated, multimodal transport networks, which can form part of a wider Mobility-as-a-Service scheme. When a MaaS app is deployed, like Flowbird’s white-label app, new revenue opportunities open up. The app can be used to find and pay for transport and mobility services, and can also host a marketplace for local events and attractions.
Open payments on transport simplify ticketing for operators and their passengers. For a deep dive into passenger benefits, take a look at this post.
Find out more about our open payment platform.