Mobile ticketing and contactless payment in local public transport in Germany
With increasing amounts of people now owning a smartphone, Deputy Chairperson of Kontiki e.V, Anne Grünkorn, highlights the trend of mobile devices being part of the daily lives of people using public transport, plus what m-ticketing and contactless technology is currently available to allow passengers to access new sales channels in order for them to efficiently and effectively purchase their public transport tickets.
One in two people in Germany now own a smartphone1. People no longer read the daily newspaper at the breakfast table or on their way to work by train in printed form but via a mobile application (app) on their smartphone or tablet. The smartphone is also taking on greater significance as a medium in other walks of life – whether as a navigation device, for the exchange of e-mails, a mobile diary, camera and photo album, access point for social networks, mobile shopping basket for online ordering, as an information portal, and so on. New apps are being developed for mobile devices every day.
This trend has also taken unrelenting hold in the area of mobility. Mobility as such is very relevant, as it takes up a lot of everybody’s time each day and costs money depending on individual mobility requirements. In this respect, it assumes great importance and has to face major challenges both now and in the future. The political framework and ecological aspects and requirements placed on transporting people have an influence on the transport providers’ scope for action. Therefore passengers have ever increasing demands on mobility and the range of mobility solutions offered today and tomorrow. They want to get from A to B as quickly and as simply as possible and have up-to-date information about timetables, routes, the latest news and alternatives available at all times during their journey. Ideally the medium ‘mobile telephone’ combines this information with the possibility to purchase a ticket and to pay the fare automatically. There are already a number of very promising approaches via mobile platforms such as switchh, moovel and Qixxit, to name just a few.
A whole range of initiatives and solutions in the area of e-ticketing and m-ticketing show that local public transport in Germany is actively shaping and driving this development. The declared aim is to make access to public transport more attractive – and compared with the familiar paper tickets more convenient – for passengers. For transport companies, the migration to e-ticketing and m-ticketing systems means greater efficiency in operations and improved planning opportunities. However, this requires greater initial investment and, in the medium-term, reorganisation of the business structures.
Kontiki e.V. was founded in Dresden in March 1998 as the ‘Working party for contactless smartcard systems in electronic ticketing’. The name reflects its mission. It bundles knowledge about new technologies and applications for public transport in order to promote multi-modal, interoperable mobility services. Kontiki sees itself as a network for the exchange of experience. It supports the discussion and analysis of practice-relevant and economically viable solutions. The starting point is the permanent dialogue with members and participants in its conferences drawn from transport companies and authorities, research and industry, the world of finance and banking, consulting businesses and public transport political bodies. While always strictly ensuring its system and product neutrality, Kontiki contributes to a constant optimisation of processes and methods, thereby promoting the development of Smart Ticketing, i.e. e-ticketing, m-ticketing and electronic fare management systems (EFM) in public transport. Kontiki connects people who have the further development of (((eTicket Germany as their goal. The VDV Core application is the open and secure German standard for electronic fare management systems (EFM) which enables the passenger to move freely and easily between the public transport companies. It provides an open platform which allows transport operators to integrate their back office systems as well as those of multi-modal and multi-functional partners.
Kontiki currently has 94 members and holds three conferences per year attended by international guests, transport experts and EFM specialists, thereby creating a powerful network and ensuring a permanent dialogue between experts and management.
The project ‘HandyTicket Deutschland2’ (‘mobile phone ticket Germany’) was initiated in 2007 and is an interoperable system (allowing all means of local public transport everywhere to be used with just one ticket) and is based on the principles of the nationwide standard for EFM in local public transport. Forty-five local transport providers from 21 transportation authorities now participate in the HandyTicket Deutschland joint project. The benefits for passengers are obvious – they buy their tickets and pay for them conveniently with their mobile phones while interoperability allows them to use bus and rail in all participating regions without having to register again (single sign-on). They no longer have to search for change or wait around at ticket machines with the associated time pressures.
In addition to the HandyTicket Deutschland product, nearly all transportation authorities now have their own online shop – usually connected via a mobile app and often combined with timetable information – as an additional sales channel for their ticketing service. Passengers have the possibility to order single, daily, weekly and season tickets online over the Internet. The transport company sends the desired ticket as a mobile ticket direct to the customer’s smartphone, to a printer (as a barcode) or, if requested, by post.
These new sales channels offer benefits for the transport provider as well as for the customer. The customer registers once via the relevant transport company’s online shop portal and becomes – unlike the previously anonymous passenger (ticket purchase at the ticket machine or from the bus driver) – a customer known to the transport company who is also accessible and approachable, for example for newsletter distribution, event invitations, inclusion in marketing campaigns, the offer of ad hoc information in the event of a strike or cancellation or for special offers for events etc. For the first time the transport company is able to analyse anonymised customer data with user behaviour (season ticket holder, commuter, senior citizen, group etc.) and to use this data exclusively to provide an even more bespoke range of services. As with the HandyTicket Deutschland, customers enjoy the benefits of purchasing and paying for tickets easily from the comfort of their own homes or during their journey. Passengers are therefore able to buy tickets at virtually any time of day or night independent of ticket office opening hours. They can choose between different methods of payment such as SEPA direct debit, credit card, payment in advance or other online methods, and can decide which method they prefer best.
Efficient service providers such as LogPay Financial Services, which has provided services to local public transport for many years, support transport companies with their plan to convince even more customers of the ease and benefits of using the sales channels of online shop or HandyTicket. The financial service provider takes care of the cashless payment transaction in the online shop, in the mobile app or on behalf of HandyTicket Deutschland, offering processing via the various methods of payment as well as transaction and claims management. With its service, the financial service provider largely protects the transport companies from abuse and fraud since it assumes the entire payment risk, performs credit screening and distributes 100% of the sales revenues to the transport companies.
A further milestone in e-ticketing and m-ticketing in local public transport is the use of near field communication (NFC) systems. NFC is an internationally specified transmission standard that allows data to be transferred wirelessly at high speed. This technology is already integrated into many mobile devices (smartphones and tablets). Although the use of the technology has not yet gained full geographical coverage in Germany, its growth is likely to accelerate since it became known that market leader Apple will focus on developing NFC technology further and has equipped its new iPhone 6 with an NFC chip. Since device manufacturers are exploring new possibilities of applications, it can be assumed that the number of devices equipped with NFC in local transport buses and trains will continue to increase in the next few years. Once passengers and the vehicles have been equipped with NFC-capable devices, or other technologies (such as Bluetooth), it will in the future be easier to validate and pay for tickets contactlessly.
Although the so-called be-in/be-out method has so far not been realised on the German market, increasing numbers of transport companies are investigating the subject with the help of feasibility studies and prototype implementations. As part of this process, passengers carrying a device equipped with NFC will be automatically registered by NFC-capable terminals in the exact vehicle without any further action being required other than embarkation/disembarkation, meaning that the precise service used can be recorded. Using this information, it will be possible to calculate the fare automatically.
Looking at what it is happening outside Germany, we can see that many countries within Europe have gone a step further with contactless smartcards, at least in the field of check-in/check-out (which is, however, only an intermediate step towards the intended be-in/be-out method). For example, the Oyster card in London, the OV-chipkaart in Amsterdam and the LisboaViva card in Lisbon provide comprehensive electronic fare management with season ticket, single ticket and charging according to the best price principle.
Summing up, it is safe to say that the right course has been taken on the German market for the introduction of smart ticketing. However, extensive efforts and collaboration on the part of all players is still needed to implement a full-coverage, user-friendly and accepted e-ticketing and m-ticketing system in the very near future.
Anne Grünkorn has been a member of the Management Committee of Kontiki e.V. since 2006 and is its Deputy Chairperson. After studying geography (FU Berlin), urban/regional planning/sociology (TU Berlin) and gaining a Master’s Degree in American studies (J.-F. Kennedy Institute), Anne worked in the area of urban and transport planning in Berlin. In 1996 she commenced work for the DG Move of the European Commission in the field of GNSS (now Galileo) and ‘Road Transport Telematics’. She later transferred to POLIS, the representative body in Brussels for transport projects for regions and cities, where she headed the administration for three years. Anne returned to Germany in 2002 and assumed responsibility for a project to introduce e-ticketing to the Rhine-Main region. In 2003, Anne moved to what is now LogPay Financial Services GmbH (formerly DVB LogPay GmbH, which changed its name in 2013), a wholly-owned subsidiary of DVB Bank SE, which specialises in managing payments and claims for local public transport, other mobility providers (car sharing, bike rental etc.) and transportation and logistics (toll charges, fuel and other services). Anne is Head of Sales and Marketing Europe for LogPay Financial Services GmbH and Managing Director of LogPay Mobility Service GmbH.