The use of Near Field Communications (NFC) for mobile ticketing

For several years now, we have been involved in developing business cases and building cost/benefit models for e-ticketing for transport.

As part of this research, we have recently been working with a company called Detica in the UK to conduct a study entitled The benefits and costs of a national smart ticketing infrastructure. This report was used to prepare the latest consultation document on e-ticketing for the UK Department for Transport (DfT).

The report examines how Near Field Communications (NFC), a short-range high frequency wireless communication technology that enables the exchange of data between devices, can be used to support paperless ticketing.  Recent developments in this area (such as the use of NFC in London’s Oyster Card Scheme) are the result of a strategic collaboration between some of the world's leading mobile technology developers, smart card manufacturers, service providers, and standards bodies, including members of GlobalPlatform, ETSI, NFC Forum and the GSMA.

With this high-tech approach, so-called "contactless tickets" make use of smart card technology using radio waves (rather than physical contacts) to communicate with the chip inside the card. As such, these electronic tickets – also known as e-tickets – can be used to help reduce the production and distribution costs connected with traditional paper-based ticketing channels, and can also increase customer convenience by providing new, secure and simpler ways to purchase tickets. 

Clearly, transport is a sector where this kind of technology can make a huge and positive difference, bringing down journey times while increasing capacity, comfort and convenience. As such, the DfT is already considering various strategies for smart and integrated ticketing schemes. The required technology is already out there, and the DfT is keen to see it used not only to help passengers, but also to reduce congestion, pollution, improve the local environment, and help plan more effective local transport systems.

This project for the DfT included a live six-month trial to demonstrate the potential for NFC as an alternative to traditional printed tickets, with 40 trialists using NFC phones with three different bus fleets in Lancashire and Cumbria. Not only did the technology work extremely during the trial, but the majority of users were very positive with their feedback, as well.    As a result, our research was able to show that NFC technology is suitable for use as NFC customer media today.

One of the main benefits of electronic ticketing for transport providers is operational cost reduction.  By allowing contactless payment smart cards (EMV) to be accepted or using NFC-enabled mobile phones, significant operational cost savings can be made.  At the same time, e-ticketing will reduce cash-handling costs.  Not only is the cost of collecting, transporting and securing cash significant, the ability to minimising the use of cash will also reduce the risk of theft, particularly from buses.

The technology that supports product development in this area continues to improve apace. Two significant factors are at play here. Firstly, NFC mobile phones have emerged. These have the ability to act as both smart cards and smart card readers. This means that, in the near future, the phones in people’s pockets will be able to store transit e-tickets that can be read simply by tapping them on a reader. If this sounds slightly futuristic, it's not; Sony Ericsson has already claimed that all of its handsets will soon support NFC.

The second significant factor is that international payment organisations like MasterCard and Visa are writing specifications to allow their chip and PIN cards to work contactlessly and then bill the transit journeys directly to the credit card statement.  As this technology becomes more established, tickets will be loaded onto mobile phones instead of smart cards, allowing people to buy their ticket over the air, check timetables and real time travel information and view their stored tickets all on their phone.

The list of possibilities for this kind of technology is endless, which is why the DfT – as well as a growing number of transport providers all across the globe – want to pursue smart and integrated ticketing solutions, whilst also examining any barriers which could prevent their adoption.  With this approach, transport operators can continue to build upon their strategic vision in this area, and move towards a reality that will benefit everyone.

John Elliott is head of Public Sector at Consult Hyperion.