We already know that transit riders like open payments because they simplify their transit experience. They don’t have to figure out fare structures, know where to get a transit card, download an app, or make sure they have the right amount of bills and coins on hand. They just get on the bus and tap their bank card or scan their mobile wallet, and rest assured they are paying the right fare with the payment method they already have in their pocket or wear on their wrist. With an estimated 9 billion EMV cards and mobile wallets in circulation globally, open payment makes fare collection easy and clearly has a broad appeal.
As many benefits as open payments provide to riders, they present an even bigger opportunity for transit agencies to streamline their operations, reduce costs, and increase ridership and revenue.
“Three really big things happen when a transit agency goes to open payment,” says Sara Edney, Product Manager at Genfare. “One is the cost of cash collection goes down when less cash is collected. The next is reducing dwell time, which increases route efficiency. The third is that it increases opportunities for frictionless travel across borders or modalities with greater interoperability. These benefits, along with a few others, have major impacts.”
Decreasing Cash Collection
Collecting, validating, sorting, counting, and transporting cash is expensive and time consuming. For every dollar bill a rider inserts into a farebox, it costs the transit agency 40 to 70 cents to process it. As an ardent supporter of equitable mobility, Genfare recommends not completely eliminating cash fares, but it’s clear that reducing the amount of cash collected by adopting open payment has many operational benefits to the transit agency:
- Reduced maintenance of hardware: Most of the moving parts in a farebox or ticket vending machine are involved in the handling of bills and coins. Rollers and hoppers need regular cleaning, maintenance, and parts replacement to deal with the degraded bills, sticky coins, and the various flotsam that gets dropped into fareboxes from the bottom of the riders’ pockets or purses. And that’s not even considering fixing the jams that may occur when a crumpled bill or foreign object gets dropped into a farebox. Less cash coming in means lower maintenance and parts replacement costs, and less time a farebox is out of service.
- Fewer trips through the vault lane: Imagine how much faster buses could return to the garage if they only had to have their fareboxes probed and emptied once or twice a week instead of daily. That means more time on the road, transporting passengers.
- Better security: There are many places in the cash handling process where money can go missing, whether intentionally by theft or accidentally. When using open payments, every cent is accounted for and no humans are touching the money. Today’s encryption and tokenization methods are extremely secure, reducing the risk of a credit card data breach.
- Faster access to revenue: Even when fareboxes are emptied daily, it can take a couple days before the cash is processed and banked. This keeps cash revenue and reporting lagging behind closed-loop cards and open payment transactions. With open payments, payments are processed in frequent batches and are available the same day, often within hours of when the card gets tapped.
- Less staffing pressure: Transit agencies are challenged with filling open positions while anticipating a wave of retirements in the coming years. The less money there is to count and move, the fewer people agencies will need to staff the counting rooms, allowing them to focus on filling customer-facing positions from the limited pool of candidates.
Reduced Dwell Time
Statistics on dwell time suggest that approximately half the time a bus is in service is spent on boarding. When riders aren’t searching their pockets for and inserting individual bills and coins, and drivers aren’t answering questions and addressing issues related to cash collection, more time can be spent moving. Open payment is tap (or scan) and go, allowing riders to board faster and cutting back on driver interaction with passengers.
Reducing dwell time has the effect of shortening the amount of time it takes a bus to complete its route. This in turn, makes it possible to run the route more frequently without adding buses, increasing the capacity for riders as well as making the bus a more convenient and attractive choice for riders who have other options. The overall impact is increased ridership and revenue.
“Imagine if you could drive to work in a half hour, but riding the bus to work takes an hour. Even if parking costs double the bus fare and gas brings the cost of driving to triple the fare, you might choose to drive more often than not,” says Sara. “But if the bus ride can be shortened to 40 minutes by reducing dwell time, and buses were coming more frequently, you would be more likely to consider saving money by riding the bus thanks to the added convenience. Transportation is the second-largest household expense after housing, so faster bus routes may be an incentive for a household to save almost $10K a year by living with one less car, increasing ridership for the agency.”
Open payments and the software that supports them simplify the connection of adjacent transit agencies, bike and scooter share, parking, and other modalities that move riders along their journeys. When riders can easily and conveniently pay for first-mile/last-mile modalities or transfer from an urban transit agency’s bus to a suburban bus or regional commuter rail without needing a wallet full of smart cards that don’t talk to each other, the providers can more easily coordinate discounts, incentives, and trip planning. And that translates to increased ridership and while not adding the administrative burden of shared fare media.
And Wait, There’s More
The reasons for transit agencies to adopt open payment go well beyond reducing cash and dwell time and increasing interoperability. It all adds up to a compelling reason to introduce open payment as soon as possible. By adopting open payment, your agency will:
- Reduce reliance on fare media: As riders adopt the use of open payment fare media, the cost and overhead associated with the maintenance of agency-issued closed-loop smart cards or other fare media issuance will decline. The cost of smart cards rose considerably during the pandemic, when the demand was low, and several vendors shut their doors. The lead time on ordering cards also grew to months rather than weeks. With open payments, banked customers will no longer need to use dedicated fare media, so not only will you need to buy fewer cards, but your workers can also spend less administrative staff time distributing cards and performing customer service functions.
- Fewer discrepancies: Records of open payment transactions are logged in real-time and reported back frequently. The fares collected will more closely align with the ridership data. If something is off, administrators will know well before the bus returns to the depot for probing.
- Easy application of fare structures: When a rider uses the same bank card or mobile wallet for every ride, fare capping and other fare structures can be applied just like they are with a smart card. This means riders can be assured they are paying the lowest fares for their rides.
- Real-time monitoring: Genfare Link, the software that supports open payment, is connected to the cloud, allowing for regular updates and security patches to be applied. Data is also connected continuously, so you can see irregularities or discrepancies on a route instantly and react accordingly. Genfare Link uses a buses’ existing Wi-Fi router or CAD/AVL connectivity to transmit data in real time.
- Reduced driver interaction: Open payment systems require just a tap or scan and communicate acceptance of payment with their displays and sounds, letting the driver focus on driving and not assisting passengers with paying their fares. The only time the driver may need to press a button with open payment is for the approval of student, senior, or other discounted fares.
Adopting Open Payment Technology Is Easier (and Less Costly) Than You Think
If your existing fare collection solution is nearing the end of its life, it just makes sense to include open payment technology when you replace it. But if you still have years left on your current fareboxes, you have options:
Existing Genfare Fast Fare Fareboxes can be upgraded to accept open payments by adding a kit. If you have a legacy Genfare farebox and are not ready to invest in Fast Fares, an Open Link Validator can be mounted to a stanchion or pole and connected to the farebox.
Genfare Link, the software at the hub of the latest Genfare solutions, also allows for greater interoperability. Genfare Link can be configured to work with Mobile Link or third-party mobile ticketing apps, GenPay or other payment processing platforms, first-mile/last-mile apps such as bike and scooter share vendors, and other partners.
To learn more about how your transit agency can adopt open payment for fare collection, read our white paper or contact your region’s Business Development Director: