Automated Fare Collection Market Size - Global Industry, Share, Analysis, Trends and Forecast 2023 - 2032

The Global Automated Fare Collection Market Size accounted for USD 11.6 Billion in 2022 and is projected to achieve a market size of USD 39.8 Billion by 2032 growing at a CAGR of 13.3% from 2023 to 2032.

Automated Fare Collection Market Report Key Highlights

• Global automated fare collection market revenue is expected to increase by USD 39.8 Billion by 2032, with a 13.3% CAGR from 2023 to 2032
• North America region led with more than 33% of automated fare collection market share in 2022
• According to a UITP report, AFC systems have helped to cut fare evasion by up to 90%, leading to considerable revenue increases for transit agencies.
• According to a Masabi study, mobile ticketing is a developing trend in the AFC market, with more than 60% of transit agencies aiming to use mobile ticketing solutions by 2023.
• The railway and transportation segment is the largest end-use segment, accounting for more than 41% of the market in 2022.a
• In 2022, the smart card technology segment led the AFC market, accounting for more than 29% of the market share.
• Increasing demand for cashless transactions, drives the automated fare collection market size

Automated Fare Collection (AFC) refers to a system that enables passengers to pay for public transportation electronically, eliminating the need for paper tickets and tokens. The AFC system utilizes smart cards, contactless payment methods, or mobile applications to simplify the payment process for public transportation. The system benefits passengers by providing a more convenient and efficient way to pay for transportation, while also reducing the cost and hassle of handling cash for transit operators.

The market for automated fare collection has been growing rapidly in recent years, with increasing demand for cashless transactions and contactless payments. The automated fare collection market growth can be attributed to factors such as the increasing demand for contactless payment methods, the need for improved transportation infrastructure, and government initiatives promoting the use of digital payments in public transportation. The AFC market size is expected to continue to grow as more cities and transit systems adopt the technology to improve their services and meet the evolving needs of their customers.

Global Automated Fare Collection Market Trends

Market Drivers

• Increasing demand for cashless transactions and contactless payments in public transportation
• Need for improved transportation infrastructure and passenger experience
• Government initiatives promoting the use of digital payments in public transportation
• Cost savings for transit operators through automation and reduced cash handling

Market Restraints

• High implementation costs for AFC systems
• Technical challenges and system compatibility issues

Market Opportunities

• Development of new payment technologies, such as mobile payments and wearables
• Integration of AFC systems with other transit-related technologies, such as real-time tracking and passenger information systems

Automated Fare Collection Market Report Coverage

Automated fare collection is a system used in transporting networks, designed to increase the efficiency in the process of collecting fares and improvement in the transaction rate. It can also be called an automated ticketing system. The automated fare collection system also facilitates the transport system in expanding its customer base and its establishment. In addition, this system aids to save time as it removes waiting in queues for purchase tickets. Furthermore, the installation of an automated fare collection system allows the transport authorities to deliver enhanced services to their customers. This is considered a smart payment method used in intelligent public transport systems. This system consists of ticket vending machines, ticket checking machines, automatic gate machines, and recharging terminals. This system enables travelers to access several transportation modes including railways, metro, buses, and taxis, for traveling using pre-paid cards and tickets to pass or cross via the automated electronic gates.

The development of metro and monorail services in developing cities is one of the key drivers facilitating the growth of the automated fare collection market value. Another reason for the growth of the market is the increasing focus of governments on the improvement and advancement of both transportation infrastructure as well as transportation security. The rising preference of people to make payments using their credit or debit cards is also driving the market for automated fare collection systems. Other factors propelling the market growth include awareness to adopt new and smart technology and increased benefits delivered by such systems. Some of the new technologies developed for automated fare collection include commercial vehicle operation, advanced traffic management systems, automated fare collection-enabled theme parks, advanced public transportation, and advanced transportation pricing systems.

The preference and adoption of these systems are increasing due to their ability to deliver more accurate and reliable operations and reduce the probability of errors as compared to the traditional methods used for collecting fare. However, the high cost of installation required for automated fare collection systems and the high cost included in the development of infrastructure are the major factors restricting the market growth. Although, the increasing demand for systems that helps in the enhancement of business operations in order to maximize profitability is anticipated to drive the market in the near future. Many established transport agencies are entering into strategic partnerships with several automated fare collection system manufacturers, financial institutions, and solution providers to incorporate the automated fare collection process and enable them to decrease overall costs.

Automated Fare Collection Market Segmentation       

The global automated fare collection market segmentation is based on component, system, technology, application, and geography.

Automated Fare Collection Market By Component

• Software
• Hardware

According to the automated fare collection industry analysis, the hardware segment leads the market in 2022. The hardware segment of the AFC market is expected to grow due to the increasing demand for cashless and contactless payment methods in public transportation. The adoption of new technologies, such as near-field communication (NFC) and mobile payments, is also driving the growth of the hardware segment in the AFC market. The market for ticket vending machines and fare gates is expected to grow significantly as transit operators modernize their systems and upgrade their hardware components to enhance the passenger experience and improve efficiency.

Automated Fare Collection Market By System

• Ticket Vending Machine (TVM)
• IC Cards
• Fare Gates
• Ticket Office Machine (TOM)

In terms of the system, the ticket vending machine (TVM) segment holds the majority of the market share in 2022. Ticket vending machines (TVMs) are an essential component of Automated Fare Collection (AFC) systems, providing passengers with a convenient and efficient way to purchase and reload smart cards or other electronic payment devices for public transportation. The adoption of new technologies, such as mobile payments and near-field communication (NFC), is also driving the growth of the ticket vending machine segment in the AFC market.

Automated Fare Collection Market By Technology

• Near-field communication (NFC)
• Smart Card
• Optical Character Recognition (OCR)
• Magnetic Stripe

According to the automated fare collection market forecast, the Near-field communication (NFC) segment is anticipated to grow at a rapid pace in the coming years. The NFC segment of the AFC market is growing rapidly due to the increasing demand for contactless payment methods in public transportation. NFC technology offers several advantages over traditional payment methods, such as faster and more convenient transactions, reduced handling of cash, and improved security and data privacy. NFC-enabled smart cards or other electronic payment devices can be used across multiple transit systems, providing passengers with a seamless and integrated travel experience. NFC technology also enables real-time tracking and monitoring of passenger travel patterns, allowing transit operators to optimize their services and improve efficiency.

Automated Fare Collection Market By Application

• Railways & Transportation
• Entertainment
• Parking
• Others

In terms of application, the railway & transportation segment dominating the market in 2022. The AFC market in the railway and transportation segment refers to the systems and solutions that enable automated ticketing and fare collection for passengers using various modes of transportation, such as trains, buses, and subways. The market for AFC systems in the railway and transportation segment is expected to grow significantly over the next few years, driven by factors such as increasing demand for efficient and convenient ticketing and fare collection solutions, growing focus on reducing operational costs, and the need for enhanced passenger experience. Some of the key players in the AFC market in the railway and transportation segment include Thales Group, Cubic Corporation, Scheidt & Bachmann GmbH, NXP Semiconductors, and INIT AG. These companies offer a range of AFC solutions, including smart cards, contactless payment systems, mobile ticketing, and self-service kiosks.

Automated Fare Collection Market Regional Outlook

North America

• U.S.
• Canada

Europe

• U.K.
• Germany
• France
• Spain
• Rest of Europe

Asia-Pacific

• India
• Japan
• China
• Australia
• South Korea
• Rest of Asia-Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

The Middle East & Africa

• South Africa
• GCC Countries
• Rest of the Middle East & Africa (ME&A)