Arriva puts a platform in place to offer a new generation of payment choices in line with new and evolving technologies

Investment in ticketing technology over the past two years has seen the entire fleets of all the major UK bus operators equipped to enable smartcard ticketing, or programmes put in place to do so. The latest to complete the roll out is Arriva, which has just concluded the refit of its 4,000-strong UK regional bus fleet with Parkeon Wayfarer200 ticket machines. As well as extending existing period tickets to smartcard systems, in line with the nascent approach being undertaken with positive results by several Go Ahead and Stagecoach subsidiaries, Arriva envisages the development of a new generation of tickets. Early offers could include off-peak discounts. In addition, multi-operator smartcard projects are being planned in areas of the Midlands and South East where Arriva operates.

Nonetheless, it remains to be seen how long the current momentum behind growth in smartcard ticketing will last or whether the public will choose alternative options that the latest generation of software modifications and ticket machines enable. TfL is scheduled to launch EMV contactless bankcard payment across its bus fleet next year, with the expectation that it will replace Oyster smart ticketing; First has also announced that it believes contactless bankcard payment will be the future of bus ticketing. Its refit of on-bus equipment is future proofing for that eventuality, as well as offering smart and contactless mobile payment. Arriva’s refit provides for similar arrangements. However, the company has a different take on the future dominant ticket payment method, continuing to view mobile as the most attractive option.

That belief is borne from the characteristics of the travel market which Arriva sees as being exceptionally suited to mobile due to demand for information and sales on the move, continuing rapid growth in m-commerce, and mobile’s ability to display travel credits and information to customers as required. It led Arriva to launch a mobile ‘flash product’ in November 2009, with the expectation that the advent of Near Field Communication (NFC) technology would enhance the flexibility of mobile ticketing and enable a one-stop shop. The expectation was that NFC would be widely available within two years, but that development now appears likely to emerge in 2014 at the earliest. “It is perhaps a surprise and disappointment that NFC hasn’t come in to the extent that we could kick hard on that,” says Mike Woodhouse, marketing manager Arriva UK bus.

Nonetheless, he argues that the original reasons for backing mobile remain valid. Last month, Arriva’s website received one million hits, 40% of which came from mobile devices, compared to a 5-10% average across websites in Europe as a whole. Sales of daily, week, four-week and annual m-tickets continue to grow rapidly. This year, around two million m-tickets are expected to be sold, nearly double the 2011 figure, with the mobile share of four-week tickets expected to increase from 16% to 25%.

“To get the NFC penetration we need, we are still probably 18 months to two years away, but I think it will come,” Woodhouse says.

In the meantime, Arriva will consider ways to make single tickets available through mobile, and also examine how to introduce a PAYG cap via EMV ticketing. However both would involve considerable customer education. For m-tickets, it could mean ticket validity expiring a set time after they are activated. For EMV, the absence of flat fares outside London means the challenge of educating passengers to tap in and out would need to be overcome. However, such an education programme could take several years. Potentially, Woodhouse believes the need to make best use of new technology could lead to greater consideration being given to introducing flat fares in metropolitan areas where network characteristics are suitable. Different geographic trials of different approaches and technologies could be undertaken to assess their suitability and customer reaction.

Ultimately, though, the main business imperative will be to offer customers a choice of mobile, smartcard or contactless payment.

“We now have the infrastructure to do all of that, when the technology is at a point for us to take advantage,” Woodhouse says. “But with anything that is going to be successful, you have to let the customer decide [which payment method is best for them].”

 

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