India is transforming at a rapid pace. The economy is growing, and unprecedented urban development have accelerated the changes in the society. Digitalization has emerged as a significant enabler of innovative and cost-effective solutions to resolve the new challenges faced by the society.
With an expanding populace and increasing pace of urban living, the cities in India are in a critical need of better and smarter commuting experience. In response to such pressing demands, the government has planned to construct over 1,000km of metro line (1) in prominent cities across India. These transit routes will further expand as India’s urban population grows to reach an estimated 814 million by 2050.(2)
As a result, today, an urban commuter in India has more choices of transit modes, ranging from traditional mass transport systems, app-based cab services to buses, autos, two-wheelers and metro rail. Concurrently, advancements in digital technologies have made available more secure payment modes and varied digital payment solutions, enabling commuters to pay through smartphones and smart cards issued by service operators. These new payment solutions in India have helped in enhancing the commuting experience.
Closed-loop Payment System
Despite the prevalence of a smart card or mobile phone, a majority of the urban mass or public transport operators are still using a closed-loop payment system. The closed-loop system enables consumers to load money into a propriety payment account linked to a payment token – for example, a smart card of a specific operator. The propriety payment token allows commuters to pay the fare and validate their access to travel. In such a scenario, a commuter with a particular Metro smart card is unable to use the same card to pay at other metros or for bus travel and/or retail payments. As closed loop cards are not interoperable across multiple transport systems, it means that customers would have to keep multiple cards for various uses, making it cumbersome for the customer.
Open-loop Payment System
To create a new customer experience of ticketing for public transport users, Hitachi co-created open-loop card-Based Ticketing service in strategic collaboration with State Bank of India, the largest state-owned commercial bank in India. Recognized as the first open-loop card based ticketing system implemented in India on Q-Sparc 2.0 standards, the payment solution delivered for Noida metro is pioneering the transition from conventional closed-loop to an open loop payment system in public transport and shall serve as a benchmark for upcoming open-loop metro projects in India. The open loop system is “purse-based” and provides efficient interoperability as it is based on National Common Mobility Card (NCMC) specifications.
Hitachi Payment Services' transit payment solutions roadmap also includes developing and managing open-loop account-based ticketing systems that enables direct debit from customer bank account, thus providing for a seamless and convenient payment mechanism.
Open-loop account-based ticketing systems uses more flexible standards-based payment schemes and solutions such as contactless cards and NFC-based mobile phones. The electronic payment system allows the users to pay for their travel using their existing credit, debit or prepaid cards, mobile devices, or any other enabled payment media.
Overall, the open loop payment systems remove the use of transit-specific or operator-specific card and thus reduces the operational cost for Transport Operators.
HPY's open loop payment system is designed to help millions of people use the same card or token for both transit as well as retail payments seamlessly which provides additional convenience. This allows the country to take one step further towards Digital India vision, given that transit use-case opens a whole new segment of population who will start using cards on a regular basis which in turn shall throw open myriad possibilities for Social Innovation.
Comprehensive Cash & Digital Payment Solutions
Hitachi Payment Services Pvt. Ltd., a Hitachi Group Company, with vast pool of IT X OT expertise, is at the forefront of revolutionizing digital payment platforms in the country. A leading player in the Indian Payments space, the company manages over 46,000* ATMs (includes White Label ATMs), 16000 CRMs and 1.1 Million POS devices (includes mobile POS & QR) besides Toll & Transit Solutions across the country. With quality engagement, HPY is a preferred partner to deliver cutting – edge payment solutions to leading financial institutions and merchant aggregators.