Automated Fare Collection Market by Component (Hardware and Software), Technology (Smart Card, Magnetic Stripe, Near-field Communication (NFC), and Optical Character Recognition (OCR)), System (Ticket Vending Machine (TVM), Ticket Office Machine (TOM), Fare Gates, and IC Cards), Application (Railways & Transportation, Parking, Entertainment, and Others), and Region (North America, Europe, Asia-Pacific, and LAMEA): Opportunity Analysis and Industry Forecast, 2023-2032

Automated Fare Collection Overview

A system called Automated Fare Collection (AFC) is used in public transport networks to streamline the ticketing and fare payment processes. By switching to electronic and contactless technologies in place of manual fare collection techniques, it streamlines the passenger experience and boosts productivity for both users and transportation providers. Buses, trains, trams and subways are just a few of the transportation vehicles that frequently use AFC systems.

Global Automated Fare Collection Market Analysis

The global automated fare collection market size was $9.4 billion in 2022 and is predicted to grow at a CAGR of 11.4%, by generating a revenue of $27.5 billion by 2032.

COVID-19 Impact on Global Automated Fare Collection Market

During the pandemic, public transport usage substantially decreased as a result of lockdowns, social isolation measures, and travel limitations. Reduced passenger numbers resulted in lower fare collecting earnings for transport providers.

Ridership on public transport is anticipated to progressively increase as a result of immunisation campaigns and the relaxation of restrictions. AFC systems will see more use when people start using public transit again and more fare will be collected.

Efficiency and Convenience to Drive the Market Growth

Fast and contactless transactions are made possible by AFC systems, which streamline fare collection procedures. Passengers can easily access networks of public transit, which shortens boarding times and boosts overall operating effectiveness. The use of AFC systems has been prompted by the rising popularity of contactless payment options such mobile wallets, contactless cards, and NFC technology. Touchless payment methods are more popular with travellers, making AFC solutions more desirable. The broad adoption of AFC systems is a result of ongoing technological developments in NFC, RFID, and biometric authentication that have improved their security and usability.

High Initial Investment to Restrain Market Growth

The installation of tariff gates, ticket vending machines, infrastructure for smart cards, and backend systems are among the considerable upfront expenses associated with putting an AFC system into place. For some transport authorities and operators, the upfront cost can be prohibitive, particularly in smaller cities and areas with tighter budgets. It can be difficult and time-consuming to integrate AFC technology with legacy systems and transportation infrastructure already in place. The adoption process could be slowed down by compatibility problems and the need for data migration. Strong security measures are essential because AFC systems handle sensitive passenger data and financial transactions. Passenger trust in the system could be damaged by security flaws or hacks.

 Smart City Integration to Drive Excellent Opportunities

For seamless connection with other urban mobility solutions, AFC systems will be a key component of smart city projects. A more effective and linked urban transportation ecosystem will be produced by integrating AFC with intelligent transportation systems, traffic management, and real-time passenger information. AFC systems will be a crucial component of platforms that provide mobility as a service, giving consumers a seamless and integrated travel experience across various modes of transportation. Adoption of MaaS will be significantly influenced by AFC's role in allowing simple access to diverse transit options.

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Global Automated Fare Collection Market Share, by Component, 2022

The hardware sub-segment accounted for the highest market size in 2022. The need for contactless fare media and card readers in AFC systems has increased as a result of the development of contactless payment technologies including Near Field Communication (NFC) and Radio Frequency Identification (RFID). Convenience and speed of contactless payment encourage greater passenger adoption. In AFC systems, smart cards are a typical type of fare medium. For efficient fare collection and validation, there is a need for secure and dependable smart card infrastructure, comprising card readers and validators.

Global Automated Fare Collection Market Share, by Technology, 2022

The smart card sub-segment accounted for the highest market size in 2022. Smart cards provide a contactless payment option that enables users to board public transport by merely tapping their cards on price gates or validators. This method eliminates the requirement for direct physical touch and enhances the boarding process. Fast and effective fare validation made possible by smart cards shortens boarding times and improves traffic flow at transport hubs, particularly during rush hours.

Global Automated Fare Collection Market Share, by System, 2022

The Ticket Vending Machine (TVM) sub-segment accounted for the highest market size in 2022. TVMs provide users with a simple and convenient option to buy or reload fare media without requiring human assistance or help from ticketing staff. In keeping with passenger preferences for touch-free fee payments, especially in a post-pandemic era, modern TVMs offer touchless and contactless payment alternatives, such as NFC and contactless cards. TVMs can be connected to Mobility-as-a-Service (MaaS) platforms, allowing users to buy tickets or get fare information for numerous modes of transport from a single device. TVMs produce useful information on fare purchases, travel choices, and passenger travel patterns, thus giving transportation authorities’ information for service planning and resource allocation.

Global Automated Fare Collection Market Share, by Application, 2022

The railways & transportation sector accounted for the highest market size in 2022. Railways frequently carry enormous crowds of passengers, making effective fare collection procedures necessary. AFC systems assist in controlling large passenger loads and shorten boarding times, resulting in more efficient operations. Through the use of AFC systems, smooth ticketing integration is made possible for a variety of rail services, including diverse train types, classes, and routes. Through this connection, travellers can buy a single ticket that covers numerous legs of their journey.

Global Automated Fare Collection Market Share, by Region, 2022

The North America automated fare collection market accounted for the highest market share in 2022. Due to the region's emphasis on modernising transportation infrastructure and improving passenger experiences, the AFC market in North America has shown consistent growth in recent years. Large North American cities with dense populations, including New York City, Chicago, Los Angeles, and Toronto, have considerable demand for public transportation. The efficient management of the numerous daily passengers and fare collecting depends on AFC systems.

Competitive Scenario in the Global Automated Fare Collection Market

Product development and geographic expansion are major strategies adopted by the players functioning in the highly competitive global automated fare collection market. For instance, in October 2022, Eau Claire transportation in Wisconsin chose TransLoc, a provider of transportation orchestration solutions, and Masabi Ltd. to deliver a next-generation fare payment system. A convenient, transparent, and accessible account-based ticketing system will be made available to passengers thanks to the collaboration.

Some of the leading automated fare collection market players are Advanced Card Systems Ltd., Siemens AG, Atos SE, Thales Group, Cubic Transportation Systems, Omron Corporation, GMV, Indra Sistemas SA, LECIP Holdings Corporation, and LG Corporation