Open-Loop systems are proliferating on a global scale, driven by the ongoing importance of minimizing hand-to-hand transactions

LONDON, May 12, 2021 /PRNewswire/ — According to ABI Research, a global tech market advisory firm, the number of Open-Loop EMV Cards in ticketing use will increase worldwide from 24.8 million to 136.9 million by 2025. With contactless payment acceptance and transactions in all markets experiencing a sharp upturn during COVID-19,  approximately 150 large cities are looking to adopt EMV as another contactless payment method, which will sit alongside existing proprietary solutions, including cities in Ireland, the United Arab Emirates (UAE), India, and Russia.

“The global COVID-19 pandemic has brought about a drive toward the modernization of ticketing systems in a contact-free way. While ridership has seen a significant downturn due to the pandemic, cEMV systems provide several advantages for end-users,” said Sam Gazeley, Digital Security Analyst at ABI Research. “Where, previously, the significant capital required to set up and integrate a contactless EMV system had put the solution out of reach for most transport operators, the ongoing pandemic has framed the importance of minimizing hand-to-hand transactions. The ability to use a card already in possession of the end-user in a contactless format provides a safer way to conduct a payment transaction. With EMV infrastructure in place, the possibility of EMV in a closed-loop scenario will also be explored by Transportation Authorities (TAs), beginning with Sweden in 2022 and London likely following suit in 2025.”

The United States will experience a significant increase in the number of open-loop EMV cards in ticketing use, increasing from 1 million in 2020 to 13 million in 2025. Latin America will see an increase in the number of open-loop EMV cards in transit use from 3.7 million in 2020 to 23 million in 2025.

The use of payment cards in transit has long been popular in Europe and is forecast to increase from 16 million cards in 2020 to a forecasted 71 million in 2025. Stockholm will see Closed-Loop EMV shipments reach 0.3 million in 2025 after kicking off in 2022. Similarly, at the end of its contract with Cubic in 2025, London is expected to adopt a closed-loop EMV solution, achieving 0.6 million closed-loop EMV shipments in the first year of inception. Europe will sport the most considerable growth in closed-loop EMV shipments with an increase from 0.2 million in 2022, to 2.5 million in 2025.

“When considering which infrastructure is currently in place, already having a contactless-based set-up enables the introduction of new ticketing form factors to a TA’s ecosystem. While this was once perceived as a potential hazard to the traditional smart card market, it is now largely considered complementary and addresses a different sub-commuter market: infrequent travelers and tourists. The logical roadmap for TAs looking to the future of their systems will see open-loop acceptance as a bridging mechanism toward the introduction of closed-loop EMV cards, adding another layer of payment choice for commuters, complimenting and working alongside existing ticketing systems,” concludes Gazeley.

These findings are from ABI Research’s Open and Closed Loop EMV Acceptance on Transportation Networks market update report. This report is part of the company’s Digital Security research service, which includes research, data, and analyst insights. Depicted in a PowerPoint format, the Market Update provides a snapshot into current and future market opportunities and threats for a specific technology as well as focusing on a selected key market and associated trends.

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