Asia Pacific is expected to be one of the largest upcoming markets for the deployment of automated fare collection (AFC) systems. In 2022, the AFC market size for the region was estimated to be USD3.34 billion, and this is expected to increase to USD5.55 billion by 2029. Contactless smart cards continue to be the most popular fare media in the region, followed by paper tickets, magnetic strip tickets, and contact-based smart cards.

Figure 1 depicts the current fare media spread in 144 cities in the Asia Pacific region.

The smartcard monopoly is expected to be phased out gradually in several countries. Malaysia, for instance, plans to add credit and debit card payments for its transit systems, besides the currently deployed Touch ‘n’ Go card.

Key trends in the region

Enhancing customer experience and increasing operational efficiency are the most important issues  in the region, and these goals are planned to be achieved by increasing the deployment of cashless and contactless ticketing systems on transport systems. As a result of the increasing penetration of mobile phones and bank cards, the need to carry cash, tokens, or separate cards on transport systems is gradually fading.

Some of the key observations and findings in the region are given below.

Open payments and ABT are gaining traction

A number of operators plan to deploy contactless bank cards on the public transport systems for the very first time. This major deployment is mainly attributed to a burgeoning banked population and an increasing focus by transit agencies on the deployment of open loop payments.

Additionally, a total of 91 cities in the Asia Pacific region have announced plans to deploy ABT in the future, of which 58 will be deploying it for the first time.

Bank cards and ABT  are becoming popular in the region. Several cities in Indonesia, Malaysia, and Singapore have already deployed credit cards, debit cards, and ABT. In Vietnam, Ho Chi Minh City’s Department of Transport recently collaborated with several private players to launch bank cards on buses.

Mobile ticketing is on the rise

The use of mobile ticketing apps to pay for transit fare is rising in many cities in the ASEAN region. This is mostly attributed to the increasing penetration of mobile phone internet penetration in the region. As per the Global System for Mobile Communications (originally Groupe Spécial Mobile), or GSMA, at the end of 2021, the number of mobile internet users in Asia Pacific exceeded 1.2 billion, reflecting a penetration rate of  approximately 45 per cent of the population.

Indonesia and the Philippines are deploying app-based and quick response (QR) code-based mobile ticketing.

Nation-wide ticketing is planned to be launched

Several agencies in the region have announced plans to deploy advanced fare media, and this move is being driven mostly by integration on various levels (city/regional/national). Several countries are planning the deployment of bank cards, mobile ticketing, and contactless smart cards.

The Philippines Department of Transportation (DOTr) announced plans to unify payments on different modes of transport by 2023 at a cost of PHP4.5 billion. Contracts are yet to be awarded for several systems in the countries in the Asia Pacific region.

Other new technologies

New technologies, such as facial recognition, palm recognition, and biometric payment are currently being trialled or have been introduced in a few countries.

Facial recognition technology

Facial recognition technology is gaining popularity in the region, with Indonesia taking the lead. The Administrative and Bureaucratic Reform (PAN-RB) Ministry is developing a facial recognition system for identifying passengers using public transportation in Jakarta. The technology is being piloted currently with state-owned train service provider PT Kereta Api Indonesia (PT KAI). The Ministry of Transportation and other stakeholders will continue to develop the project.

Digital wallet-based ticketing

Digital wallets are becoming increasingly popular to pay for transit fare. India is taking the lead in the region. The use of digital wallets to pay for fares on public infrastructure is quite common in Indonesia. The leading apps in the country include GoPay, OVO, DANA, LinkAja, and iSAKU.

The way forward

Integrated ticketing solutions are being implemented to facilitate seamless payments on multiple modes of transport operated by multiple operators on the city, state, and regional levels. These solutions are also expected to provide real-time information and lead to data-driven network improvements.

Close collaboration between transit authorities, municipal agencies,  governments, and private players; technological innovation; increasing penetration of mobile phones; an expanding  banking population; and policies and programmes promoting digital transactions are driving the growth in the deployment of AFC systems for public transit.