Digital Push: Advances in AFC systems driving operational efficiency

Advances in AFC systems driving operational efficiency

The network of rail-based urban transportation systems has been developing rapidly in the country and the growth is expected to be sustained over the next few years. With the shift in focus towards improving operational aspects, the automatic fare collection (AFC) market has already witnessed an increasing level of technology penetration. AFC systems provide smart cards for contactless ticketing, resulting in efficient collection of farebox revenues and convenience to commuters. Over the years, new and innovative solutions have been deployed to enhance ease of travel. From 2006, the market increased at a compound annual growth rate of 14.36 per cent till 2017-18, to reach approximately Rs 16.27 billion. The growth has further picked up in recent years, as more projects have become operational. This has also led to innovative solutions for fare collection, further supported by cashless transactions through mobile wallets and quick response (QR) codes.

Current scenario

At present, there are two technologies in place for fare collection – the AFC technology and the near-field communication (NFC) system. The AFC technology is further divided into two systems – closed-loop smart card systems and open-loop bank card systems. A closed-loop system is a prepaid stored value system that is operated and maintained by the transit agency. The soft codes of a closed-loop system are not universally accessible. Hence, such systems pose difficulties in integration and do not support interoperability across modes. On the other hand, an open-loop system links the customer’s payment device directly to a credit or debit card. In addition to metro fare payments, the device can also be used at any retailer that supports contactless payment.

The other technology, the NFC system, enables smartphones to act as smart cards. The NFC device is installed in a phone which acts as an electronic identity document and keycard. Under this system, an antenna chip inserted in the smartphone functions as a smart card. Over the years, several metro systems such as the Delhi Metro, the Bangalore Metro, the Chennai Metro and the Hyderabad Metro have deployed NFC devices for fare collection.

Recent trends

With advancements in communication and mobile technologies, AFC systems are evolving in tandem. As a result, established metro systems such as the Delhi Metro have taken several initiatives with regard to fare collection. In October 2017, the Delhi Metro Rail Corporation (DMRC) adopted an “open gate” system for the Magenta Line (Janakpuri West-Botanical Garden) and the Pink Line (Majlis Park-Shiv Vihar), constructed under Phase III of the project. Under the new system, the flaps at the gates remain open throughout and close only if a passenger tries to enter or exit the system without touching a smart card or token on the reader at the gate. This new technology is expected to increase the number of passengers entering or exiting stations per minute by over 65 per cent.

In June 2017, the DMRC also launched the cashless token sale/smart card recharge facility by using the Bharat QR code displayed at token counters and customer care centres of metro stations. The service which has been provided by HDFC Bank can be availed of through the mobile application of any other bank. Currently, this facility has been made available at five metro stations – Rajiv Chowk, Rajendra Place, Seelampur, Pitampura and Nehru Place – and will be introduced subsequently in a phased manner at all metro stations in the city. Further, dream gates have also been introduced at the Red Fort and Jama Masjid stations of the Delhi Metro Heritage Line. These gates allow passengers to travel using a QR code which they receive on their mobile phones. The new technology provides commuters with the ability to purchase journey passes via e-wallets and instantly receive QR codes once the payment procedure is complete.

The DMRC has also collaborated with Austrian watchmaker LAKS GmbH for launching the “Watch2Pay” smart watch. The watch has a SIM card inside it, which can be removed and reinserted whenever the user wants. The SIM card can be recharged like the usual metro smart card over the counter or through recharge card terminals. In order to reduce human interface, the DMRC has removed token selling counters from 70 of the 164 operational metro stations in the city and introduced token vending machines.

In January 2018, a common mobility smart card was introduced to enable commuters to travel on the Delhi Metro and on 250 select city buses. The initiative is under trial at present. The DMRC has also tied up with IndusInd Bank to launch the Metro Plus Card and with ICICI Bank for the Unifare DMRC platinum debit card. The Metro Plus Card enables IndusInd Bank debit card users to use it as a Delhi Metro smart card in addition to the other regular debit card transactions. The Unifare DMRC platinum debit card has an inbuilt Delhi Metro transit chip which gets automatically recharged with Rs 200, when the balance drops below Rs 100. Earlier, in April 2017, DMRC had also partnered with Ola Money to allow commuters to recharge their metro cards directly through the Ola Money application.

Several other metro systems across the country have also brought in innovations in their fare collection systems. The Hyderabad Metro Rail Corporation launched the TSavaari mobile application which allows commuters to get time and cost estimates of their journeys, buy smart cards and recharge them. Further, the Nagpur Metro Rail Corporation has collaborated with the State Bank of India (SBI) to launch a mobility card which can be used for various purposes. In May 2017, the Chennai Metro Rail Corporation launched its mobile application which provides exhaustive information on every important detail that could be needed by commuters. It also launched a combo card in collaboration with SBI. This card acts as a debit card as well as a metro transit card.

In order to facilitate cashless journeys, Reliance Infrastructure-led Mumbai Metro One Private Limited (MMOPL) launched India’s first mobile ticketing product, Skiiip Q in partnership with Paytm. This facility allows passengers to book tickets up to seven days in advance on their phones. In collaboration with SBI, MMOPL has also launched the OnGo mobile ticketing system to help commuters pass AFC gates using their mobile phones. In June 2017, the Kochi Metro Rail Corporation also launched an open-loop based smart card in partnership with Axis Bank called Kochi Metro Card I, which can be used for both mercantile and internet transactions. In addition, the Lucknow Metro Rail Corporation also launched contactless smart metro cards called Go Smart which work on radio frequency identification technology.

Advantages of smarter fare collection systems

Advancements in transit fare collection systems have the potential to revolutionise public transportation and transform it into a far more efficient and effective service that benefits all stakeholders – customers, operators, industry players, government and urban communities. On the one hand, advanced fare collection systems offer customers greater convenience for everyday payments, seamless travel and value-added services. On the other, they offer operators lower operations cost, higher fare revenue collection, new sources of revenue, reliable ridership and system data, greater throughput, better capacity utilisation and improved environmental sustainability. In addition, they present opportunities for innovation and growth to industry players.

The way forward

Going forward, the demand for AFC systems is forecasted to emerge from Tier II cities, primarily from Lucknow, Indore, Bhopal, Guwahati, Varanasi, Pune and Jaipur, due to several upcoming and ongoing metro rail projects.

With regard to system technologies, various metro corporations are planning to integrate multimodal transport systems through a common payment platform so as to ensure hassle-free last-mile connectivity. In the near future, Kolkata Metro Rail Limited is planning to introduce NFC technology to enable contactless exchange of data between two electronic devices on its upcoming East-West metro. The Mumbai Metro Region Development Authority is also planning to introduce an integrated ticket system to eliminate repeated cash payments for a single trip. Further, Chennai Metro Rail Limited is also in the process of introducing contactless smart cards and e-wallets to facilitate cashless travel. Therefore, the growing demand for advanced AFC systems provides significant opportunities for Indian manufacturers and technology providers to tap the growing market, which is still dominated by global players.

Liya Rashid