Bus Automated Fare Collection (AFC) System Market Trend 2031

Report Description

Bus Automated Fare Collection (AFC) System Market Outlook 2031

The global bus automated fare collection (AFC) system market size was valued at USD 2,413.9 Million in 2022 and is projected to reach USD 5,090.3 Million by 2031, expanding at a CAGR of 8.9 % during the forecast period, 2023-2031.

A Bus automated fare collection system (AFC) is composed of both hardware and software elements that provide a convenient and efficient fare service to customers. Hardware components include electronic validators, point-of-sale terminals, fare gate systems, and ticket machines.

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Software components include account-based fare collection systems, which process and transfer Passenger as well as payment information in the back-end panel. It allows customers to select fare platforms according to their convenience, such as mobile apps, smart cards, electronic payment cards that is a payment & validation tool, and paper tickets. Customers verify their tickets by single swiping or tapping their card.

Bus Automated Fare Collection (AFC) System Market Macro-Economic Factors

Transportation Infrastructure

Ongoing construction of transportation infrastructure in developed and developing nations offers the market participants a significant opportunity to boost their market share. Supportive services are provided by automated fare collection (AFC) system providers during and after the system has been installed.

Thus, the demand for bus AFC systems is increasing with the increasing development in the transportation industry. For instance, the Smart City initiative launched by the government of India promises to include a variety of transport options, including electric buses. These transportation options are anticipated to incorporate AFC systems, providing growth opportunities for the market.

Government Regulations

Government regulations have a significant impact on the automatic fare collection (AFC) systems market in North America. The government has mandated the use of advanced technologies, including Near Field Communication (NFC) and Radio Frequency Identification (RFID) in public transit, which are fueled by AFC systems.

AFC systems have gained momentum, strengthening its market position in the region, due to these mandated requirements. The regulations of European Union for security transactions in public transport, including buses, are causing significant changes in AFC systems in Europe. The conventional ticketing systems are expected to be replaced by AFC systems under these laws, to simplify the ticketing process for passengers.

Technological advancements

Technological advancements in the bus automated fare collection system have transformed the market over time. Key players in the market are adopting innovative technologies and methods to meet the requirements. Manufacturers are focusing on several aspects, including reputation, availability, performance, and product making.

Furthermore, bus AFC system manufacturers are focusing on security systems & transport infrastructure and providing flexible fare plans, which are influencing the market growth. For instance, in 2022, Masabi and Roaring Fork Transportation Authority (RFTA) launched the RFTA Tickets Contactless Fare Payments System. This mobile application allows customers to buy tickets anytime and anywhere.

Bus Automated Fare Collection (AFC) System Market Dynamics

Major Drivers

Growing Demand for Efficient, Reliable, and Secure Systems for Collecting Fares

The growing demand for efficient, reliable, and secure fare collection systems drives the market. The bus automated fare collection (AFC) system eliminates the requirement for human ticketing and payment methods, resulting in quicker, efficient, and convenient transportation transactions for passengers and transit operators.

While manual bus fare collection systems necessitate security and a significant amount of manpower is expended counting money and reconciling trips with the amount collected.

Mobile ticketing applications, contactless Europay, Mastercard and Visa (EMV) cards, and smartcards reduce these costs while allowing ticket inspectors to spend more time targeting areas with a high incidence of illegal or irregular card use. For passengers, this system is a fast and convenient payment means, with short wait times, and an improved overall travel experience

Increasing Focus on Reducing Operational Costs

A bus automatic fare collection system decreases the amount of labor payments to employees, as it replaces a human collector. It reduces maintenance costs, problems associated with manual ticketing systems, and paper ticket processing.

Many transit agencies used to print ‘pay on the way’ tickets, which required employees to count each ticket after completing their shifts and enter the data into transit management systems (TMS). An automatic fare collection system can be programmed to generate a ticket with the same information on it when it scans a card, eliminating the need to count the tickets manually.

Furthermore, by eliminating the need to establish ticket offices, and expenditures associated with cash collecting and encoding, processing, and distributing tickets, the entire cost of operating the system can be significantly reduced.

AFC systems' flexibility allows agencies to avoid being bound into single-vendor contracts, allowing them to more readily upgrade or add components such as parking integration as technology evolves or becomes cost-effective. These factors are driving the market.

Major Restraints

High Implementation Cost for Automated Fare Collection Systems

High implementation cost is one of the major factors that restrains the growth of the bus automated fare collection (AFC) system market. Installing an automated fare collection system is more expensive than installing alternative fare collection systems, such as manual tolling. The system requires regular maintenance, which raises the costs further.

As a result, it is economically challenging for transportation authorities to provide services to a limited number of commuters. Furthermore, the lack of consistency among AFC systems and the necessity for modification based on different regions add to the system's cost and complexity. Small agencies cannot afford the high cost of proprietary smart card solutions typically offered by major fare collecting system manufacturers.

Emerging Opportunities 

Potential Integration with Other Types of Transit Systems

Potential integration with other types of transit systems create opportunities for the growth of the bus automated fare collection (AFC) system market. Integration of AFC systems with Mobility-as-a-service (MaaS) enhance the convenience and satisfaction of passengers by allowing them to use one card or device for all modes of transport, such as buses, trains, metros, and trams.

This reduces the hassle of buying and carrying multiple tickets and enables them to benefit from targeted schemes, such as subsidies, discounts, or credit trips. It increases the efficiency and security of transport operators by enabling real-time data transfer and processing, remote monitoring and management, and seamless coordination of different modes of transport.

This helps in optimizing routes, schedules, fares, and services based on passenger behavior and demand. It creates new revenue streams and business models for the transport operators by integrating with other transport services, such as parking, bike-sharing, and car-sharing.

Increasing Investments in Smart Cities and Intelligent Transportation Systems

Many people are likely to use digital payment methods for public transportation, due to the growth of smart cities. ATC systems seamlessly integrate with various payment options, making it convenient for commuters.

NEC Corporation India Private Limited and Surat Municipal Corporation (SMC) launched the AFCS project in Surat with the purpose of creating a cashless and contactless public transit ticketing system. This system was created to reduce the requirement for cash payments and paper tickets, increasing the efficiency of public transportation systems.

Adoption of intelligent transportation systems such as contactless and mobile ticketing options to enhance passenger convenience and satisfaction is projected to gain huge traction in the near future.

Scope of Bus Automated Fare Collection (AFC) System Market Report

The report on the global Bus Automated Fare Collection (AFC) System market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Bus Automated Fare Collection (AFC) System Market Segment Insights

The global Bus Automated Fare Collection (AFC) System market is segmented on the basis of by Component, Bus Type, Technology and Boarding Type.

Component Segment Analysis

Based on Component, the global Bus Automated Fare Collection (AFC) System market is divided into Hardware and Software. The Hardware segment have significant share in 2022 and is projected to expand at a significant CAGR during the forecast period.

This is due to expanding transportation industry, rising infrastructure developments in developing countries, and growing government initiative to introduce intelligent and automated fare collection systems for buses.

For instance, in May 2022, Indra Sistemas SA announced that the company is designing, developing, and providing ticketing systems, access control systems, and automatic ticket vending machines with technologies such as QR codes and contactless cards with the integration of instruments including mobile phones for the Cairo monorail in Egypt.

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Bus Type Segment Analysis

Based on Bus Type, the global Bus Automated Fare Collection (AFC) System market is fragmented into Electric bus and internal combustion engine (ICE) bus. The Electric bus segment accounted for significant share in 2022 and is projected to during the forecast period, owing to the rise in the demand for low emission, fuel-efficient, and high-performance electric bus.

For instance, around 66,000 electric buses were sold globally in 2022, accounting for 4.5% of all bus globally. China is a major producer and has the highest sales of electric.

Regional Outlook

The market in Asia Pacific is projected to expand at a significant share during the forecast period, this is due to rapid urbanization, growing middle class which is leading to increased demand for public transportation in the region. Also, various initiatives taken by the government across the region is also boosting the market in the region.

The market in Europe is to expand at a significant CAGR during the forecast period, this is due to rise of contactless payments, growth of mobile ticketing, as many bus operators are now offering mobile ticketing apps. This makes it easier and more convenient for passengers to purchase and store fares on their smartphones.

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