Market Insight

The United States and Smart Cards in Public Transportation

October 22, 2015

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The Americas have been viewed as a major target for the development of smart ticketing in public transportation. Until recently Latin America was driving much of the excitement, as high urbanisation and poverty meant that public transportation was a key target for government investment across the continent. Now that the commodities boom in Latin America has come grinding to a halt, this market has lost some of its lustre. Argentina, Brazil and Colombia are still important markets in the short term but the long-term outlook, due to precarious economic situations, has become increasingly less optimistic. The United States now has the brightest prospect to drive growth in the region.

The biggest change in the United States will be the migration of projects toward new, more advanced standards. Presently MIFARE Classic is the standard for the vast majority of U.S. projects, but by 2020 both MIFARE DESFire and MIFARE Plus will have made significant gains, in terms of shipments and installed base. The changeover to new advanced standards is already occurring in the United States, but is not expected to build momentum until 2017.

The 2017 milestone is highly significant, as it ties into the expected growth declines in Latin America; however, current Latin American projects will continue, because budgets and fees have already been confirmed. The mid- to long-term future is much bleaker in Latin America, as governmental budgets are now being squeezed by cuts and rising demand. Potential developments in the United States in 2017 should keep the market buoyant.

The upgrade cycle for transportation systems in the United States has come at a perfect time. The inclusion of new technology in a complementary manner, means that smart cards will still play a prominent role, even with smartphone NFC dominating the industry media conversation.

New developments in India, Indonesia and other Asian countries are also very important, as they offer manufacturers fresh new markets to enter. However the United States will still be a key area for transportation, with the launch of the new Southeastern Pennsylvania Transportation Authority (SEPTA) card in Philadelphia, new developments in Los Angeles and the Ventra Card in Chicago. Although the Mumbai metro system, which launched in June 2014, has been a huge success, when it comes to new projects in the next five years, the United States has a large selection.

The MIFARE suite is currently the dominant standard in the country, but the use of CiPURSE open standard in the United States is expected to start in 2017 or 2018, which will have a wider effect on the entire market. CIPURSE is the main Latin American target, but the ongoing economic decline in the region could slow the uptake of this particular standard. The United States is also a big target for the CIPURSE standard, and if the standard gains widespread acceptance there, then it could drive usage throughout the region, and perhaps even globally. All industry stakeholders should, therefore, aim to stay abreast of the latest CIPURSE developments.

An infographic highlighting some of the trends in The Americas market 

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