Smartphones are now part of everyday life. The number of smartphone users worldwide surpassed six billion last year according to Statista, which expects that figure to go past seven and half billion by 2026.
As more and more services go digital the proliferation of applications follows, helping people manage their finances, livestream music and videos, locate and book taxis or even pay for parking spaces. Around 4000 new apps are added to mobile stores every day with gaming, finance, housing and leisure the most popular themes.
We have reached the point where not having an app on Google or Apple Store is similar to not having a website at the height of the dotcom boom. Transportation and public services are no exception and the race has started to differentiate the citizen and commuter experience. Digital/mobile ticketing is becoming a must to ensure a high level of service.
What is mobile ticketing?
Mobile ticketing is the process whereby the commuter purchases, submits or validates a ticket through a smartphone, paying for the virtual ticket with their mobile application using either a bank card or a wallet. A QR code or barcode is generated for this single use, which grants access to public transport or other services.
What are the benefits of mobile ticketing?
Reduction in operation costs
The most obvious benefit of the introduction of mobile ticketing for service providers is the reduction in operational and production expenses connected to printing, encoding and distributing physical tickets and selling them to customers. With a digital approach, everything is centralised on the system servers where the QR codes are generated.
Businesses are always trying to find new ways to reach a wider audience. However, without access to data and analytics it is almost impossible (and extremely costly) to understand consumer demand and build a strategy accordingly.
With mobile ticketing, transport operators and public service providers gain a convenient tool for tracking and gathering historical data on customer purchases, preferences, monthly spending and location of spending and can analyse this data for better segmentation and targeted marketing campaigns.
Technology for good
Lower operations costs is not only the benefit connected to the elimination of paper tickets. Municipal authorities that implement mobile ticketing and digitisation of urban environments are following a green agenda that will improve their smart city ranking by decreasing the number of paper used.
Enrollment of commuters to ecosystem
The benefits for the service provider do not end with cost reduction or enrichment of their database. Users are increasingly comfortable with mobile technology and mobile applications, which easens the enrollment of commuters to the system.
According to research from Kibo, consumers are increasingly using smartphones and tablets to make purchases.. With people increasingly using their mobile phones to access all types of services, this trend can be expected to intensify and for mobile phone conversion rates to eventually surpass those of desktop transactions..
Transparency and security
The security aspect of payments is also a concern for commuters. With the increased level of cash-based fraud or card skimming evident since the start of the coronavirus pandemic, mobile-based ticketing provides a safe solution. Operations made by mobile phone are completely contactless as the commuter only needs to either show the screen with the QR code or use the NFC chip in the device to scan for the ticket inside the application. These operations are also transparent, meaning users can check their purchases, ticket costs and other information in real time through the apps.
Mobile ticketing for transit is a relatively small market, but according to Technavio it is poised to expand by $5.6 bln between 2020 and 2024 in line with increased use of QR codes, NFC chips, e-wallets, bluetooth and biometric technologies. According to ReportLinker, the global mobile ticketing market will be worth $4 bln by 2027 - almost four times higher than its current value.
More and more cities are implementing mobile ticketing technology. In excess of 200 cities have already introduced mobile ticketing solutions and an even higher number plan to introduce it in the future according to the Global Mass Transit report.
Starting with urban megapolises, mobile technology is expected to spread to cities and countries where mobile penetration among the unbanked population is high. It is only a matter of time until everyone is using a mobile app instead of a bank card, transport card or paper ticket to pay for travel on buses and trains or to visit museums or attend concerts. The question for service providers is: ‘Will it be your app or your competitors’ that they are using?’
Moving to digital ticketing? Talk to our consultants who support municipalities, transport operators and other ecosystem players to go digital.
Read about our Nairobi, Kenya case and USSD mobile payments