ABT – the opportunities of transitioning

Osmodal Group’s Mick Spiers and Consult Hyperion’s Lawrence Sutton consider the benefits of Card-Based to Account Based ticketing (ABT) and determine factors to consider with transition

Transit agencies and authorities of major cities around the world are facing a dilemma.  There is a new era of automated fare collection and mobility payments now upon us.  As with all generational changes this will present new innovations and new possibilities. But also new challenges.

There is little doubt that Account Based Ticketing (or Back-office centric ticketing) will unlock new opportunities for transport operators and agencies to simplify their operations and bring new customer experiences to the travelling public.

ABT will enable faster adoption of new payment means; new fare types; and will introduce new paradigms for customer service. 

The AFC ( industry has developed amazing features with card-centric ticketing, but they have always been constrained; the need to manage a vast network of smart devices and the ability to read, and write, to the contactless smart card.  Moving all the fare logic and customer service operations to the back office will revolutionise and simplify many aspects of AFC operations.  This includes expediting the process for fares and topology updates through to simplifying the customer experience for online reloads, processing refunds, or applying concessions.

ABT promises to allow transport authorities to let their imaginations go wild.  It will give more freedom to use fare policy levers to attract new customers to public transport and to give new and more convenient ways for people to choose how and when they pay for their fares.

Furthermore, the evolution to ABT opens an opportunity to rethink enterprise architecture and procurement strategies.  The AFC industry has been dominated by end-to-end suppliers that provide a complete solution from readers all the way through to the back office.  This has generally attracted a perception that vendors gain a monopolistic position in that city for a decade or longer.  The generational shift to Account Based Ticketing, combined with the use of open architecture and APIs, makes it feasible to consider a multi-vendor environment.  And this would reduce the considerable barrier to entry and create an environment of innovation based on competitive tension.  A move to open architectures and APIs will make is easier for more nimble and agile players to bring new innovations to the market.

So, with this utopian world in mind, where are the challenges?  Many cities have achieved great success with penetration of their card-centric solutions.  In some cases, these solutions have become an everyday part of life in some of the world’s most iconic cities.  One could argue that the cities with the most successful card-centric schemes have created a rod for their own back.  It is extremely difficult to innovate and evolve a solution that has injected itself into every aspect of daily life as you need to consider the regression and impact to a plethora of existing real-life use cases.

Does the business case stack up? Will the benefits of ABT be worth the costs (and pain) of the migration? I would argue in most cases the answer will be yes.  However, there will be some level of expense and disruption to deal with.  In democratic cities with short election cycles this may be a dificult pill to swallow. The move to ABT will reduce the cost of fare collection in the long run but will come at increased cost in the short term. The move to ABT will improve customer service and operations but one could argue that current card-centric solutions are not “broken”.  The business case will need delicate consideration.

Migration or transition from legacy systems to account based ticketing will be complex.  This includes cities moving from card-centric solutions and those that have already implemented open payment as an overlay to their existing systems.

Several critical decisions will need to be made. These include:

1. Do we migrate or do we transition?  A migration would see card holders migrate their existing purse or credential to the new system.  A transition would see the old system phased out and require users to open new accounts in the new ABT. (essentially a “start over”)
2. Do we automate a card “flip” or issue new tokens? An automated card flip would see an automated creation of a new account in the ABT back office when the existing card is presented to a reader.  Issuing new tokens has its own logistical challenges; customer communications; and disruptions.
3. Will there be a period of parallel operations?
4. How do we validate the new system against the old?
5. Do we migration / transition by geography, by mode, or a big bang?
6. Do we replicate existing fares policies in the ABT or do we immediately transition to new fare types?
7. How do we communicate these changes to operators and the traveling public?
8. Do we replace readers or migrate existing readers?
9. Do we take the opportunity to address any obsolescence in the existing solution?
10. Do we go with a single end-to-end vendor with total system performance responsibility? or do we create a multi-vendor competitive environment?
11. How do we ensure a level playing field that attracts new vendors to enter and compete against the incumbent?

As you can see there are many challenging questions to address.  They all need close consideration and diligent research before embarking on an ABT strategy. It is likely that there will not be a single repeatable answer that works in every single city.  There will be unique issues that will need to be considered. 

However, there are some common principles that should be considered regardless of which strategy is selected.  These include:

1. We must build the trust of customers that their funds and privacy are secure before, during, and after the migration.
2. Continuity of service must be maintained.
3. Customers must be able to travel across the breadth of the network as they do today (eg not having different cards and accounts for different modes or geographies in the network)
4. Keeping the migration as simple as possible (from the customer and operator perspective)
5. Having clear communication of what the migration is all about, what the benefits are, and what is expected of all stakeholders.

There is little doubt that Transport Authorities have wonderful opportunities in front of them, but also some major headaches and challenges to deal with.  They will need the support of the AFC industry and independent consultants to get this right.  We will all need to collaborate for the greater good to ensure the full benefits of ABT can be realised in cities that already have a well-established card-centric ticketing system in place.

Many cities are also like to use the migration to ABT as an opportunity to rethink their architecture and procurement strategies.  Shifting to a multi-vendor environment will require a highly skilled, experienced, and independent partner to help with definition of enterprise architecture, information architecture and APIs, and with independent testing and certification of the solutions and products put forward.

The most critical factor of all will be to maintain the integrity of the system and to maintain the trust and confidence of the travelling public throughout.