Electronic payment and fare management (EFM) systems can represent a significant improvement in the operations of public transport systems, benefiting both customers and the transport company.
Payment transactions and the complexity of fare structures pose real and psychological barriers to the use of public transport – especially for new customers – which must be reduced or removed entirely.
For this reason, one vision of the future sees the tickets currently in use being replaced by e-ticketing, in which transferrable or non-transferrable transit cards allow for easier access to buses and trains and are valid for all modes of transport within the network, while at the same time providing the company with vital data for billing, planning, customer-oriented marketing and payment transactions.
Three different variations are possible:
- In the case of cards which only function for payment, cash is replaced by credit cards or smart cards.
- Payment and ticket functions also allow electronic tickets (digital tickets or mobile tickets) to replace paper tickets.
- And in a third step, the correct fare is determined by means of automated fare calculation, such as Check-In/Check-Out (CICO) systems in which passengers must check in when boarding and check out when alighting and Be-In/Be-Out (BIBO) systems which detect and register the presence of a smart card in a public transport vehicle.
Different standards such as Calypso in France, ITSO in the UK, and VDV-Kernapplikation in Germany are aiming to create a form of interoperability within the European Union.
The use of contact smart card systems would require the installation of a slot in the terminal and could lead to operational delays when there are large numbers of customers. With this in mind, contactless smart card systems with proximity (< 10 cm), vicinity (< 100 cm) or wide-range (< 30 m effective distance) technologies have been developed. In the case of wide-range technology (BIBO), passengers do not have to hold the card in their hand to check in and check out; such "hands free" systems only require them to have the card about their person. However, complete technical reliability and a near-zero booking-error rate are essential here.
Near field communication (NFC) mobile telephones can also function technically like standard contactless smart cards. EFM raises data-privacy questions which must be addressed (e.g. separation of personal data and route logs).