WHAT’S THE DIFFERENCE BETWEEN AN OPEN AND CLOSED-LOOP PAYMENT SYSTEM?
Reservation and ticketing systems have been undergoing changes for a number of years as new global payments systems replace all live alongside all the technology token and paper ticketing systems.
With advancements in technology and mobile communications the ability to tap a bankcard or smart devices at the cash provides a better customer payment experience, which is, now quicker and easier and obviously creates opportunities for new engagement models with consumers.
With this adoption of new banking and mobile technology at the consumer level more and more businesses in every sector are beginning to see the benefits of opening up their payment channels.
Here at IMS with our Odin reservation, ticketing and fare collection software we have been cognizant of these changes over the years and have implemented many different merchant gateways and payment capabilities within our system.
One area that has seen growth is in passenger transport. This can range from basic shuttle and vans services up to larger transit operations, either bus or ferry services.
The ability of our transit payment, reservation and ticketing systems that provide legacy capabilities with barcode tickets alongside and fully integrated with the use of contactless credit or debit cards, student cards or other ID cards, or even their mobile phone to pay for their journeys has been greatly enhanced.
Globally, these new automated fare collection (AFC) solutions are commonly called open-loop or account-based systems. Although they can provide a greater degree of flexibility over closed-loop or cash-based payments and ticketing schemes, they do not necessarily provide a complete solution in many parts of the globe.
So, a closed-loop payment system often uses a propriety payment system that allows for commuters to pay a fare and validate their access to travel using smart cards or tokens that are only valid within that scheme.
A second feature of this method is that data is predominantly stored on the cards. This increases the complexity of functions required on both validated and fare media.
Open-loop ticketing systems are able to use a more flexible standards-based payment schemes and solutions such as contactless cards and mobile payments via handheld devices, etc. Open-loop ticketing systems allow the users to pay for their travel using their existing credit, debit or prepaid cards, mobile devices or any other enabled payment media there is no need for commuters to carry a transit specific card.
Odin Voyager reservation and ticketing software allows the use of both models in the same system, allowing paper-based ticket production and scanning or mobile ticket scanning, smartcard, token and other methods of payment. It allows for reservation-based purchase of tickets or just in time boarding, in fact it covers the gamut of passenger travel. It also allows for information concerning journeys and fares to be stored in a back-office account, and fact calculations occur in the back office system.
This back-office account based fare calculation model is becoming common in open payments ticketing implementations it allows for fares to be calculated in the back office prior to or after the trip is taken place. It also enables fare capping, incentives, vouchers, coupons; loyalty rewards and discounts thus creating more flexibility in the transit payment scheme.
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