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Loyalty & Digital Ticketing: A Winning Combination?

September 2022
Fintech & Payments

Nick Maynard

VP of Research

What is Digital Ticketing?

A digital ticket can be described as a virtual representation of a ticket; encompassing digitisation of rights to claim goods or services that such ticket holds. Therefore, digital ticketing is the means by which such digitalisation takes place, often in the form of mobile tickets purchased online (ie, via online platforms) and associated access control systems in event venues and/or transport stations/platforms to check ticket validity. Digital tickets can also be presented as files for download (ie, a PDF or a file including a scannable QR code or barcode generated through the transaction) and take different forms such as mobile, online, and wearable tickets.

As with all digital transitions, enhancing customer experience is an important consideration driving digital ticketing adoption, with service providers looking to balance security with convenience. This is especially true for industries where customer experience lies at the centre. With the advent of smartphones, mobile access control technologies utilising NFC (Near-field Communication) and Bluetooth became the two key enablers of mobile ticketing. Coupled with additional functions such as interactive features, journey planning, navigation, order processing, and further marketing offers, digital tickets are no longer mere secure passes.

Advantages of Digital Ticketing-based Loyalty

Combining loyalty with ticketing by using apps is not a novel phenomenon for the events/entertainment space, but the opposite can be stated for the transport market. As with any digital system, and for transport, loyalty is a concept that is integrated into a wider ecosystem of information gathering from interaction touchpoints, as well as tailoring offerings according to customer preferences and choices. For public transport operators, there are several stages to grow loyalty through interactions on the customer journey: pre-booking, booking, pre-travel, travel, and post-travel. Capturing customer data through a mobile app, in a manner similar to credit cards, allows operators to not only to build customer profiles by collecting transactional or location data, but also incentivise the use of transport schemes.

As such, the concept of loyalty in transit is also intrinsically linked to MaaS (Mobility-as-a-Service) and multi modal travel, in the sense that these apps can provide information that enriches customer journeys (ie, by providing travel updates or offering in-journey discounts on selected operators, etc).

Notable Rollouts

Customer loyalty programs and rewards schemes are often deployed at the roll-outs of fare collection and/or ticketing system upgrades (ie, switching to contactless or open-loop payments) by transport authorities to increase customer uptake.

However, we now see movement towards loyalty and program reward schemes being used as part of the mobile ticketing apps deployed with ticketing vendors. For instance, Cubic Transportation Systems’ new mobility platform launched in 2021, Umo Mobility Platform, offers passengers loyalty rewards; enabling transport providers to launch schemes quickly. Similarly, in July 2020, Vix partnered with Valley Metro and Unwire to implement a new AFC system for its public transit, as well as developing a complementing mobile app to enable passengers to pay fares, check balances, and top-up account values from their smartphones and plan their trips and save their favourite stops.

Juniper Research’s View

The relatively new introduction of loyalty programs and rewards in transit ticketing through transit/transport authority-owned apps is a crucial tool in creating customer familiarity. Juniper Research believes that loyalty schemes will proliferate in line with both the increase in the number of mobile apps deployed by transport authorities and MaaS implementations.

► Digital Ticketing Market Research

The global digital ticketing transaction value will reach $1.4 trillion in 2027, up from $768 billion in 2022. This growth of 78% over the next five years represents a strong recovery from the heavy impact of the COVID-19 pandemic, driven by the ongoing success of contactless payments. However, current market fragmentation, where users cannot use the same payment method across different transit and events areas, as a factor limiting growth and user experience quality.
  • Metro and bus ticketing is the fastest-growing digital ticketing segment, with transaction value in this segment set to rise by over 200% over the next five years. Vendors must focus on developing integrated contactless systems for different transit scenarios, such as bus, train and micromobility, in order to break down the fragmentation inherent to the current market.
  • Ticketing vendors must pursue strategies, such as account-based ticketing, where any payment type can be linked to a back-office account. By removing barriers, vendors will accelerate the digital transition in ticketing and hasten the onset of Mobility-as-a-Service.
  • Additionally, the value of digital events ticketing will exceed $230 billion in 2027, from just under $100 billion in 2022; representing rapid growth of 137%, as events move to contactless entry to improve the on-the-day experience and reduce costs. Vendors must offer added incentives, such as collectable digital ticket stubs minted as NFTs, to enhance the fan experience.

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