Strong Growth Ahead : Automated Fare Collection System Market to Expand from $10.6B in 2023 to $33.3B by 2033 at 12.3% CAGR

According to a new report published by Allied Market Research, titled, "Automated Fare Collection System Market," The automated fare collection system market size was valued at $10.6 billion in 2023, and is estimated to reach $33.3 billion by 2033, growing at a CAGR of 12.3% from 2024 to 2033.

Key Findings Of The Study :

By component, the software segment is anticipated to exhibit significant growth in the automated fare collection system market size in the near future.

By technology, the radio frequency identification (RFID) segment is anticipated to exhibit significant growth in the automated fare collection system industry in the near future.

By end user, the transportation segment is anticipated to exhibit significant growth in the automated fare collection system market analysis in the near future.

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Automated Fare Collection System (AFCS), also known as electronic fare collection system, is an automated system that helps public transit operators to trace and account the revenue and provide a convenient way of fare payment instead of cash. Automated fare collection system is a bunch of software and hardware technologies which enables the ease of fare payments along with validating the passengers' commute. The global automated fare collection system industry includes technologies such as smart cards, Near Field Communication (NFC), Optical Character Recognition (OCR), magnetic strips, and bar codes. Currently, smart cards are widely used to enable ease of fare payment to travelers.

The global automated fare collection market is segmented on the basis of component, technology, end-user, and region. On the basis of component, the global market is segregated into hardware and software. By technology, the market is divided into smart card, magnetic stripe, near-field communication (NFC), radio frequency identification (RFID), biometrics, and others. On the basis of end user, the global market is segmented into logistics, transportation, retail, media and entertainment, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America.

The automated fare collection system market share is driven by the growing trend towards contactless payments, growing urbanization, and increasing investment by government on development of public transportation system. However, factors such as high investment cost and cybersecurity challenges and security concerns hamper the growth of the market. Furthermore, development of high speed internet and 5G networks, and rise in advancement in multi-modal transportation solutions offer lucrative growth opportunities for the market.

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In addition, the market is highly competitive, with several key players dominating the industry. Prominent manufacturers focus on innovation, product differentiation, and strategic partnerships to maintain their market positions. Market leaders include companies such as Cubic Transportation Systems, Inc., Indra Sistemas S.A, LECIP HOLDINGS CORPORATION, Siemens AG, Thales Group, OMRON Corporation, Scheidt & Bachmann GmbH, Advanced Card Systems Ltd., Hitachi, Ltd. and NXP Semiconductors.

Increase in global trade activities and rapid industrialization globally has led to increased wealth among countries. Increase in disposable income and rapid industrialization resulted in countries spending more on the development of public transportation. For instance, in the Asia-Pacific region, the increase in commerce has led to migration of people from rural areas to urban areas. The cities in the region are becoming more populated resulting in increased transit time and higher traffic jams. To tackle the overpopulation issue, governments in the region are spending a huge sum in development of public transportation networks such as buses, trams, metros, and railway networks.

However, the installation of automated fare collection system (AFCS) in transport networks require high cost, which includes installing payment collection equipment and checking devices, setting of communication network (wired networks), and installing network equipment, fixing the installed system hardware, fine-tuning and testing system hardware, and interaction between system components. Bus and taxi transportation service providers require handheld collection devices, while subways and trains require a much bigger infrastructure. This increases the overall installation cost, which hinders the stated growth.

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In the coming decade, over half of Asia-Pacific's inhabitants are projected to settle in urban areas, according to the Asia Business Council's most recent estimate. In China alone, there are already 236 cities, each with a population exceeding half a million people. The World Bank reports that developing regions' economic growth is expected to rely on cities for over 80% of its output. Furthermore, Hong Kong, Singapore, Mumbai, Tokyo, Seoul, and Bangalore are among numerous other metropolises in the Asia-Pacific region grappling with rapid population increase. Thus, the growing population in this region is anticipated to drive the development of public transportation systems and create demand for automated fare collection system market forecast.

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