Automated Fare Collection Systems Market Report

An automated fare collection system is a combination of hardware and software components working together to deliver quick and user-friendly fare service to the users. These systems are compatible with various payment methods that include open and closed-loop systems, mobile applications, top-ups, and physical ticketing. The urban population has exhibited a significant rise over the forecast period.  In order to facilitate the increasing number of travelers, governments have increased their focus on creating innovative transportation systems.

According to the U.S. Department of Transportation 2023 report, the first round of funding through the new Strengthening Mobility and Revolutionizing Transportation (SMART) funding Program, totaling over $94 million for 59 projects around the nation has been announced. U.S. President Biden's historic Bipartisan Infrastructure Law launched the competitive grant program, which provides State, local, and tribal governments $500 million over five years to utilize technology to build safer, more equitable, efficient, and innovative transportation networks.  Thus, the increasing adoption of automation across industries and the rise in demand for stress-free and efficient transport systems are anticipated to drive market growth.

The increased urban population made it challenging for the transit authority to support more transit. The manual process of collecting fares requires more staff and time, which increases the chance of error. Additionally, during the COVID-19 pandemic, this circumstance presented a risk spreading of infection. As a result, the use of contactless ticketing increased significantly. In addition to this, the reduction of boarding time and cash handling procedures has improved the transit experience. Users can now swipe contactless payment methods owing to the growing adoption of automated fare collection systems. This has pushed the use of a simple and efficient fare payment system. The use of smartphones has increased, accelerating the adoption of these automated payment systems.  Besides, the automated fare collection systems can handle large amounts of transactions and manage records efficiently. Public transit authorities incur financial losses due to fare evasion. To avoid these evasions, smartcard technology is used which provides enhanced security, thus, contributing to the expansion of the market.

• Integration of multiple transportation modes into a unified system.
• The growing use of RFID and NFC for contactless payments.
• Increasing use of smartphone-based ticketing and validation solutions.
• Rising adoption of smart cards for seamless travel.

The automated fare collection systems are built on advanced technologies. The incorporation of advanced technologies in the manufacturing of the systems makes it more complex and expensive. Therefore, the maintenance of such systems becomes difficult. In addition to this, there is a requirement for huge investments to ensure the proper functioning of the system. Moreover, the slow growth in the automated fare collection systems market in underdeveloped and developed nations is another factor that can negatively impact the market growth.  Furthermore, cybersecurity attacks have increased due to the deployment of automated fare collection systems. The number of weekly ransomware attacks on the global transit industry has increased by 186% year over year since June 2020, according to the Bureau of Transportation Statistics. In order to ensure the safety of traveler’s data such as personal and banking details, the transit authorities must partner with vendors that are in compliance with regulatory cybersecurity standards. All these factors are anticipated to restrain the smart market expansion over the forecast period.

The automated fare collection systems market is propelling due to the increasing smartphone penetration. The use of smartphones has caused an ongoing increase in online ticketing. Mobile phone-based cashless ticket payments have made them more convenient, which is helping the market to flourish. Moreover, an exclusively created mobile application that generates a QR code which enables users to buy fares through their mobile devices, thus driving market growth. The smart card is yet another automated system for cashless transactions. Magnetic stripes or chips combined with near-field communication are used in smartcards. This technology is anticipated to be more secure as it holds the travelers’ data or a special token that can be connected to the travelers’ account. On swiping of smartcard, the relevant amount is deducted from this account. The smartcards are rising in demand as they are easy to create and use. Furthermore, EMV technology which refers to Europay, Mastercard, and Visa is another technology that allows users to conveniently purchase fares with their respective bank cards. Owing to this shift in the interaction of people with technology, it is anticipated that such technologies will attract investments and attention.

North America holds a significant share in the automated fare collection systems market owing to the advanced public transportation infrastructure, higher expenditure on the adoption of advanced technologies, extensive penetration of the internet, and a technologically inclined population. The presence of key market participants like Omron Corporation, Thales Group, etc. Furthermore, the automated fare collection market is growing rapidly in Asia-Pacific as well. This growth can be attributed to the increase in funding from governments of developing countries for railway infrastructure, highway network expansion, etc. According to the Asian Development Bank, an investment of $ 1.7 Trillion per year during the forecast period is anticipated in order to maintain growth and respond to climate change. More than 30% of this investment needs to be in transport. Additionally, Europe is anticipated to hold a significant share of the market during the forecast period owing to the rising digital payment system and higher smartphone penetration.

The report provides a detailed overview of the automated fare collection systems market insights in regions including North America, Latin America, Europe, Asia-Pacific, Oceania, and the Middle East and Africa. The country-specific assessment for the automated fare collection systems market has been offered for all regional market shares, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the automated fare collection systems market. These Y-o-Y projections on regional and country-level markets brighten the political, economic, and business environment outlook, which is anticipated to have a substantial impact on the growth of the automated fare collection systems market. Some key countries and regions included in the automated fare collection systems market report are as follows:

• Automated fare collection systems market detailed segments and segment-wise market breakdown
• Automated fare collection systems market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in automated fare collection systems industry)
• Current, historical, and forthcoming 10 years market valuation in terms of automated fare collection systems market size (US$ Mn), share (%), Y-o-Y growth rate, CAGR (%) analysis
• Automated fare collection systems market demand analysis
• Automated fare collection systems market regional insights with region-wise market breakdown
• Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
• Latest developments and innovations in automated fare collection systems market
• Regulatory landscape by key regions and key countries
• Automated fare collection systems market sales and distribution strategies
• A comprehensive overview of the parent market
• A detailed viewpoint on automated fare collection systems market forecast by countries
• Mergers and acquisitions in the automated fare collection systems market
• Essential information to enhance market position
• Robust research methodology