Transit systems shouldn't confuse open loop pay with EMV

An interesting observation has occurred to me during industry conferences and articles I’ve read that I felt important to address: Account-based ticketing is rarely distinguished from EMV.

While an EMV transit system is a form of account-based ticketing (ABT), this assimilation is problematic. And crucially, it’s prohibiting transit operators from being able to make the best decisions for their local markets.

Under pressure to deliver more digitalized, on-demand and value-added services, transport operators are facing an influx of information and choices to make. And, as an enabler of mobile and contactless services, ABT is a compelling solution. The increasing reference to ABT when a pure EMV system is being discussed, however, is impairing the ability of decision makers to differentiate between the nuances and benefits of ABT models with and without EMV.

A universal truth is that each transport market is highly unique. While EMV may be the best solution for some, the reality is that a standardized deployment of this model is not best suited to everyone. To help bring some clarity, let’s do a few fact checks.

A definition frequently cited by U.s.-based industry body, the Secure Technology Alliance, defines ABT as: “the transit fare collection system architecture that uses the back-office system to apply relevant business rules, determine the fare, and settle the transaction.” Essentially, the "smart thinking" moves from the front end (fare media, such as a card) to the back end (a cloud-based system managed by the operator).

The benefits are numerous: simpler system management, reduced operational costs (including the dematerialization of tickets), quicker throughput, more competitive business models, simplified connection with adjacent services. For consumers, it also empowers them to top-up remotely and use a range of fare media, whether that be a card, mobile or wearable. In the age of mobility as a service (MaaS), migrating to an ABT system makes perfect sense to most operators.

So, why the confusion with EMV? Most would likely point to the most frequently cited ABT success story – Transport for London (TfL), which uses EMV. But there are distinct differences in implementation and important considerations needed before deciding to launch EMV.

The important takeaway is that account-based systems can take many forms: with or without EMV, with or without a closed-loop card, online or offline. Indeed, a hybrid form of an ABT system with an EMV plug-in is even possible.