Navigating unpredictability in 2022 and beyond: Open Vs closed loop ticketing

For the past two years, passenger ticketing has faced unprecedented levels of unpredictability and continued demand for ticketing flexibility. Planners in 2022 will therefore sharpen their focus on key trends such as MaaS, and agile tariff structures such as Pay-as-you-Go (PAYG). The question of whether to use open or closed loop ticketing or a combination of both, to deliver these services, is one that networks are currently scrutinising. In the second of our three-part 2022 Insights series, CNA CEO, Philippe Vappereau explores the role both solutions have to play and what planners must consider when evaluating their options…

Every network is unique, and the cornerstone of a successful ticketing infrastructure is that is it aligned with individual network and passenger demands. However, as we previously explored, PTOs and PTAs can no longer reliably predict passenger behaviours. To accommodate this unpredictability, ticketing planners are looking at how they can combine flexibility as part of a smart, integrated ticketing experience.

One size fits no-one

One approach being taken is how to incorporate a passenger’s overall payments experience into transit with open loop ticketing. Open loop is when a passenger uses their contactless EMV bank card or digital wallet on an NFC-enabled device for ticket purchasing and validation. It relies on the infrastructure put in place by payment networks e.g. Mastercard, Visa, American Express. However, what’s clear is that open-loop ticketing is not a ‘one size fits all’ solution, and what is likely to emerge is a rich dynamic between open-loop, closed-loop or possibly even hybrids of pure open and closed-loop systems, such as those based on EMV® technologies.

Each solution has its own features and limitations. For example, closed-loop EMV ticketing payments only support account-based ticketing (ABT), so would suit a network looking to only offer ABT – but this could leave some passengers feeling excluded. EMV specifications are built primarily for the global payments industry and do not allow you to write data into the card, only to read it, which can present challenges for PTOs and PTAs who want to offer concession fares to passengers. This can also present a challenge when it comes to supporting flexible fares that passengers increasingly demand to support agile commuting.

ABT, whether it is with a closed loop or open loop architecture, does come with data governance issues, complicating a network’s ability to respect any passenger’s rights and wishes when it comes to privacy. With rigid data protection regulations such as Europe’s GDPR, planners need to ensure they are not falling short in this area when scoping ticketing infrastructure upgrades..

Open standards provide flexibility

True open standard technologies enable operators and authorities to smartly combine account-based and card-based ticketing into their system, avoiding a dependency on the reliability of communications networks and a central system. They also enable passengers to access a mix of every tariff type, including subscriptions, locally-stored value and pay-as-you-go, all delivered with the same level of high performance and data privacy safeguards.

As PTOs and PTAs scope ticketing infrastructure strategies, it is still wise not to “put all your eggs in one basket” and rely solely on one proprietary ticketing system. Factors such as cost, transaction speed at scale, supply chain resilience, nurturing innovation and even supporting unbanked passengers mean that we will continue to see a role for community-led open standard systems over the next decade as ticketing’s accelerating evolution continues.

Get in touch to find out more about being part of Calypso, the ticketing community-led standard shaping the future of transit.