AUTOMATED FARE COLLECTION SYSTEM MARKET ANALYSIS

Global Automated Fare Collection System market is estimated to be valued at US$ 27.94 Bn by 2030.

Basic station equipment called an automated fare collection (AFC) system includes an automated gate machine, a ticket vending machine, and a ticket checking machine. This system used primarily in public transportation, offers a more efficient alternative to traditional ticketing methods. Implementing an automated fare collection system allows transport authorities to provide improved services to passengers. Additionally, the integration of advanced technologies such as smart cards, contactless technology, and electronic payment with the AFC system has reduced costs associated with manual ticketing systems in the transportation industry. To ensure smooth passenger flow during peak hours, stable and integrated platforms are crucial for the AFC system. Furthermore, all the data collected will be transmitted to a central location.

The Sacramento Light Rail Transit Project in California implemented a system that enables the use of EMV (Europay, Mastercard and Visa) cards and QR code technology for contactless ticketing. SC Soft, a company involved in the project, provided Validators that are certified for EMV L1 / L2 standards. These Validators, along with an AFCS (Automated Fare Collection System) Central Management System, are connected to LittlePay and Elavon. The project has been operational since June 2021, covering all 54 stations across three lines.

Global Automated Fare Collection System Market: Regional Insights

• In 2022, the Asia Pacific region held the largest share in the global automated fare collection system market, representing 45.0% of the market value. North America and Europe followed by APAC, hold subsequent shares. The industry is benefiting from the growing demand for technologically advanced solutions. Market players are incorporating the latest technologies, real-time data analytics enhances the functionality and convenience of automated fare collection systems.
• Moreover, North America region has emerged as the primary market for growth, with the highest contribution to the automated fare collection system market. This can be attributed to substantial investments by local and federal authorities to upgrade and modernize the region's public transportation system, leading to a significant transformation.

Figure 1. Global Automated Fare Collection System Market Share (%), By Region, 2022

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Global Automated Fare Collection System Market- Impact of Coronavirus (COVID-19) Pandemic

Globally, most countries were affected by COVID-19 and had implemented lockdowns. COVID-19 has significantly disrupted almost all industries including electronics & semiconductors, automotive, manufacturing, media & entertainment, and others. The Covid-19 pandemic affected the Automated Fare Collection System market negatively. It led to a global shortage of chipsets and supply chain disruption. Certain companies in the market have commenced operations again, and they are encountering difficulties in swiftly ramping up production capacity while also recovering from the previous setbacks caused by the temporary halt in manufacturing activities. COVID-19 has a significant impact on the supply side as well as the demand side of the semiconductors industry. A slowdown in production by set-top box manufacturers due to the COVID-19 crisis resulted in demand variation for set-top box SoC chipsets.

Global Automated Fare Collection System Market- Drivers

• The enhanced user experience provided by AFC systems: The adoption of automated fare collection systems is expected to increase due to the elimination of ticket counters, time-saving benefits for travelers, and enhanced convenience. These systems simplify ticket distribution and checking for transport authorities, leading to operational efficiency and cost reduction. These factors are anticipated to drive market growth as various transit authorities embrace automated fare collection systems. Additionally, the use of smartcard systems makes fare payment faster and easier for travelers, with transaction times through AFC systems being approximately 3-5 times faster than manual ticket payments.

• Transportation authorities' proactive measures to encourage technology adoption: Transport authorities worldwide, particularly in mature markets, are increasingly embracing the AFC system to achieve economies of scale. This trend is expected to continue, especially in countries like India and China, where a large number of daily commuters rely on public transportation. Transport authorities are facilitating adoption by offering smartcards that include a refundable security deposit. Emerging economies in South Asia, including India, China, Malaysia, Thailand, and Singapore, are actively adopting the AFC system, supported by increased government investments in transportation infrastructure projects. These factors are anticipated to drive market growth in the forecast period.

Global Automated Fare Collection System Market- Opportunities

• Investments in transportation infrastructure and emerging economy projects: The ongoing transit infrastructure projects in developed and emerging economies present a substantial growth opportunity for market players. AFC system providers can offer supportive services during and after the installation of the system. For example, the 'Smart City' project initiated by the Government of India aims to incorporate various transportation modes such as Metrino driverless pods, Bus Rapid Transit (BRT), Monorail, Metro Projects, and Light Rail Transit (LRT). These projects are expected to integrate automated fare collection systems, creating market opportunities for service providers in the coming years.

• The upgrading of existing transit projects: Government authorities in several countries, particularly in Europe, are prioritizing the renovation of existing transit infrastructures. This approach is favored as it requires less funding compared to the installation of entirely new systems, increasing the likelihood of technology adoption. As a result, it is anticipated that automated fare collection solution providers will have significant business opportunities in the forecast period.

Global Automated Fare Collection System Market- Trends

• The enhanced user experience provided by mobile apps is anticipated to expedite the adoption of AFC systems.: Transit authorities globally are prioritizing smartphone users by utilizing mobile apps to enhance user experience and improve transport services. For instance, Cubic Corporation offers Ventra Mobile App which allows commuters to book transit services in Chicago through their smartphones. This app streamlines fare collection for the Chicago Transit Authority (CTA), Metra, and Pace. Additionally, Thales Group also offers a live ticketing app for Android phones which enables online ticket bookings.

• Integration of Advanced Technologies: Integration of Advanced Technologies: AFCS systems are incorporating advanced technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and data analytics. These technologies enable better passenger flow management, predictive analytics for demand forecasting, and enhanced security measures.

Global Automated Fare Collection System Market- Restraints

• "Challenges Ahead: High Installation Costs Impede Growth of Global Automated Fare Collection System Market": The considerable upfront costs associated with implementing automated fare collection systems can act as a deterrent for government authorities considering its adoption. Additionally, it may not be economically viable for the government to provide services to only a small segment of travelers. These factors are anticipated to hinder the growth of the global automated fare collection system market in the forecast period. Furthermore, the implementation of this technology involves various software and hardware components, including central computer systems, cards, integration software, handheld devices, station computer systems, fare gates, and mobile application software.

• Component integration issues may hinder the growth of the global automated fare collection system market.: Component integration issues have the potential to impede the growth of the global automated fare collection system market. The successful implementation of automated fare collection systems relies on the seamless integration of various hardware and software components such as central computer systems, cards, integration software, handheld devices, station computer systems, and fare gates. Any challenges or difficulties in integrating these components can lead to operational inefficiencies, system malfunctions, and suboptimal user experiences.

Figure 2: Global Automated Fare Collection System Market Share (%), By Application, 2022

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Global Automated Fare Collection System Market- Segmentation

Global Automated Fare Collection System Market report is segmented into system components, application, end use, and region.

• By System Component: Direct Hardware, Software, Services
• By Application: Bus Rapid Transit, Light Rail Transit, Train, Others
• By End Use: Public Transport Authority, Private Transport Authority
• By Region: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa

Global Automated Fare Collection System Market: Key Developments

Major market players are focusing on product launches, in order to enhance their product portfolio.

• For instance, in June 2022 Seiko Epson Corporation, an electronic company, expanded its inertial measurement unit1 (IMU) lineup with the development of the M-G370PDG ("M-G370G"), an IMU equipped with a high-performance, six degrees of freedom sensor. The M-G370G will enter volume production in July 2023.
• For instance, in January 2023, TSC Printronix Auto ID (TSC), a renowned provider of barcode label printing solutions, announced a new collaboration with Distribution Management (DM), a prominent national distributor of print and imaging solutions. As part of the partnership, Distribution Management has been authorized to distribute TSC's range of top-quality, high-performance thermal printers in North America, along with OEM labels and supplies.
• In June 2023, SATO Holdings Corporation, plans to expand the use of renewable energy and promote energy efficiency and conservation in pursuing decarbonization. The company’s targets are to halve groupwide Scope 1 and 2 emissions from FY 2016 levels by FY 2030 and reach net zero by FY 2050.

Global Automated Fare Collection System Market: Key Companies Insights

Major players operating in the global Automated Fare Collection System market include Cubic Corporation, TSC Auto ID Technology Co., Ltd, TEC Corporation, Bixolon Co., Ltd, Citizen Holdings Co., Ltd., Star Micronics Co., Ltd, Seiko Epson Corporation, SATO Holdings Corporation, Brother International Corporation, and Others

*Definition: The Global Automated Fare Collection System refers to a comprehensive electronic ticketing and payment solution utilized in public transportation systems worldwide. It automates the fare collection process, replacing traditional manual ticketing methods. The system typically includes various components such as ticket vending machines, automated gates, validators, smart cards, mobile apps, and a central management system. It enables passengers to conveniently purchase tickets, access transportation services, and make payments using contactless smart cards, mobile devices, or other electronic payment methods. The AFC system offers benefits such as improved efficiency, reduced ticketing errors, enhanced passenger experience, and better data management for transport authorities. It is widely deployed in buses, trains, trams, subways, and other modes of public transport to streamline fare collection operations and provide a seamless and convenient travel experience for commuters.