Smart Card Technology in Public Transportation

When it comes to public transit, passenger demands are clear: commuters want convenient, affordable and efficient options for travel. Smart card solutions—in the form of electronic ticketing—promise to deliver on those demands. Smart cards are more convenient, they can be purchased and "reloaded" using automated processes. Because cards can be personalized, they can be canceled if stolen. They are also more efficient to use, allowing more rapid movement through stations and onto different modes of travel.

Related Services

• Fare Management for Integrated Electronic Ticketing
   

Related Research & Insights

• Building an eTicketing Business Case
• Maximizing the Potential of Road-User Charging
   

Accenture launched a global study of leading smart card decision makers at operators, municipal governments and eTicketing card companies. All study participants had experience in eTicketing and represented leading-edge implementation of the technology within the industry.

The results were clear. Many smart card programs have achieved their original objectives and 50 percent of all survey participants reported that their efforts were "a success.” However, for many respondents implementation was more complicated than originally anticipated. eTicketing was often viewed too simplistically, increasing the risk of difficulties in implementation and limiting the benefits to customers. The research also revealed an abundance of lessons learned and highlighted areas that were critical success factors.

The Accenture study sought to gauge how successfully smart cards were meeting performance objectives and what additional value was achieved. Participants were asked if smart cards were effective across a range of issues from increased ridership to decreased operational costs.

The objectives participants felt were most successfully met by smart cards centered on customer convenience—which was also the area of highest importance mentioned by most operators. Those surveyed specifically mentioned increased customer satisfaction, improved speed of boarding, reduced queuing and greater ease of access.

eTicketing programs substantially over-delivered in a number of areas, including the optimization of fares by destination, the ability to enter new business areas such as retail, improved customer relationship management abilities and one-to-one marketing opportunities. Political awareness was another area in which participants found that benefits exceeded expectations.

Although the return on operational costs reported in the study was not as high as customer satisfaction, companies still saw improvements in distribution, equipment maintenance and ticket printing—as well as increases in the number of new customers.

According to comments received in the interview segment of the research, many operators underestimated the complexity of implementing e-ticketing solutions and viewed these in terms of their technical implications only. Despite this finding, it should be noted that some operators reported that they had achieved a 15 to 30 percent decrease in related maintenance costs through their programs.

In terms of additional value driven by smart card adoption, 40 percent of all respondents had achieved unexpected benefits from their eTicketing projects. The more noteworthy benefits included:

• Smart cards were perceived as being a catalyst for change in an industry that has a reputation for being staid and old-fashioned.
  
  
• Smart cards can serve as the foundation for revitalizing cities and their citizens. In areas with saturated urban centers, effective transportation can expand commercialism into outlying areas and revitalize inner city areas with limited access to public transit.
  
  

Accenture has developed its own views on best practices for smart card delivery based on its experience with the world’s most successful—and complex—implementations. Some of the most critical areas to address and actively manage include:

• Project governance and management: Creating and maintaining a single vision within one organization can be challenging, and much more so across multiple entities. It is critical at the beginning of any eTicketing effort to articulate the expected benefits and adopt a project management approach that strives to achieve those goals. Without all main stakeholders continuously aligned, the project is bound to be steered in the wrong direction.
  
  
• Supplier relations/technical issues: The issues are nearly one and the same because of the disparate systems associated with using multiple suppliers. The key to success is to integrate technologies and processes across systems and suppliers so that a tight loop of operations is created. This will eliminate inefficiencies and lay the groundwork for expanding projects outside transit-only applications.
  
  
• Distribution/usability: The survey found that after the initial project management-related issues were addressed, other challenges in distribution and usability were confronted. Accenture has developed methods to help transit operators anticipate areas downstream that could be problematic if overlooked or inappropriately planned.
  
  

Smart cards are the ticket to the future for most of the world’s transit operators.

According to Accenture’s global research, some implementations have been successful, and many have achieved their original objectives. But smart card implementation was viewed by many respondents as being more complicated than originally anticipated: many viewed eTicketing solely as a means of systems implementation. This limited view increases the risk of a difficult implementation and limits the ultimate benefit to passengers.

Yet smart cards represent transformational change for most operators. And major change requires a broader, more holistic view, one that considers alliance partner management, supplier relations and knowledge of the uptake patterns of eTicketing projects.