New revenue streams for transit operators through NFC

5460 NXP has claimed the top spot in the contactless ticketing market in 5725 ABI Research’s new market analysis. Shipments of the Mifare range (Classic, Plus, Ultralight, and DESFire) remain strong despite some security concerns around the Classic product. ABI says that overall, Mifare has withstood scrutiny and demonstrates that the highest level of security is not an overriding factor in adoption with the focus on cost effectiveness, convenience, and reliability. The lack of alternative solutions has helped cement a strong market presence early on and the depth and breadth of the current product range gives the brand continued success.

Historically, the market has been dominated by proprietary systems such as Mifare and Calypso, although moves are underway that could potentially open up the market. Open loop payments using the EMV platform are a hot topic and there has already been a large scale implementation throughout 1466 Transport for London’s network in preparation for the 2012 Olympics.

The convergence between open-loop payments and contactless ticketing would allow seamless transaction completion between multiple, international networks and also provide a launch pad for other platforms such as NFC.

Research analyst Phil Sealy comments, “The integration of NFC will present new opportunities to transit authorities. By partnering with local businesses, transit operators are able to offer value added services, providing partnering businesses the opportunity to offer consumers vouchers or marketing via NFC handsets. This will generate new revenue streams for transit operators.”

Open standards are coming to market with the OSPT having already published the specifications for Cipurse, a microcontroller-based solution. Pilots are expected to begin in 2012, with other specifications supporting a memory-based and a RFID disposable solution to follow.

Group director John Devlin says, “We expect to see Cipurse deployments start in Europe and then follow in other regions as more cities see the benefit in smarter transportation systems. A broader and more flexible product range will help it to develop like Mifare.”

ABI Research’s “Contactless Ticketing for Transportation” study provides regional shipment data on smart card and disposable RFID solutions by region and product type. The report provides ABI Research's view of the most likely future market changes and developments.