Contactless ticketing volume may exceed 1 billion in 2024

Worldwide contactless ticketing could exceed 1 billion transactions in five years, according to a study published Oct. 10, 2019, by ABI Research. Transportation agencies are migrating from memory-based cards to chip cards with enhanced security and fast response times, ABI researchers found.

As the trend continues, analysts expect memory card shipments to decline from 175 million in 2018 to 144 million in 2024. Conversely, use of cards with built-in microcontrollers is expected to rise from 240 million units in 2018 to 385 million in 2024, according to the study.

Sam Gazeley, digital security analyst at ABI Research, observed contactless ticketing is especially strong in affluent regions. “In Middle Eastern nations, there is a notable trend in the deployment of Account-Based Ticketing and mobile ticketing platforms, particularly across affluent areas, including the UAE and Saudi Arabia,” he stated. “In Asia, several contactless ticketing trials are taking place. QR codes have long existed in China as a means of digital payment and are now being trialed on localized mass transit applications.”

Gazely further noted that WeChat’s Ride Code is popular in China. He expects Hong Kong to launch a QR code-based transportation payment system by 2021. “If this finds traction in other regions as well, there is the potential for an impact on the traditional closed-loop ticketing market,” he stated.

Tech-fueled innovation

ABI researchers attributed global growth in contactless ticketing schemes to a small group of innovative ticketing solution providers, which includes Gemalto, Paragon ID, IDEMIA and G+D. These technology-focused firms are encouraging transportation companies to migrate to open-loop systems that have become popular in the United Kingdom and Australia, they found.

“For example, transportation integrator Cubic Corporation is looking to pursue a pivotal project in Australia utilizing an open-loop system similar to the system in London,” researchers wrote. “At the same time, the U.S. Department of Transportation is planning to implement new ticketing systems, including account-based ticketing, to provide commuters with a range of device options to use as their contactless ticket.”

Gazely agreed that established vendors are well-positioned to continue to drive global migration from legacy ticketing systems to innovative, digital-first schemes, including mobile and account-based ticketing. “The use of mobile ticketing can help vendors seize opportunities in areas of high smartphone penetration to improve convenience for travelers,” he noted.

More information about the ABI Research study is available at www.abiresearch.com/market-research/product/1030054-contactless-ticketing/  

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