APAC to Offer Huge Growth Opportunities for Automated Fare Collection Market

Rapid developments in technology and transportation system infrastructure have led to the enormous growth of automated fare collection market across the globe. AFC applications are primarily used in buses, railways, parking, and road toll plazas in order to collect fare electronically, thus resulting in faster commuting of passengers. It also provides fully controllable, automated, and centralized systems, thereby enabling protection against revenue leakages, larger customer base, lower operating expenses, and seamless uninterrupted operations in different modes of transport. Overall, the AFC systems provide easy commutation and hassle-free payments and fare collection system. Therefore, rising government initiatives towards reducing the costs of public transportation and usage of e-payment or cashless is fueling the market growth, globally.

Market Scenario

The size of the global automated fare collection market is expected to grow from an estimated USD 6.42 Billion in 2016 to USD 11.95 Billion by 2021, growing at a CAGR of 13.2% during the forecast period 2016-2021. Based on technology, the magnetic strips technology segment is anticipated to hold the largest market share in 2016, and is also likely to dominate the market over the forecast period as well. However, the NFC technology segment is expected to witness significant growth, owing to the increasing adoption of cashless fare collection system for transportation. Moreover, it is estimated to grow at a faster pace in the APAC region as compared to other regions. On the basis of services, the managed services segment is projected to be the largest market as well as grow at the highest CAGR during the forecast period. Among applications, the transportation & logistics sector is expected to dominate the global AFC market with the largest market share over the forecast period.

How is the AFC market shaping up globally?

Geographically, North America is expected to hold the largest market share, thereby dominating the overall market over the forecast period. The region is proving to be competitive as far as the adoption of AFC solutions across major industries is concerned. Moreover, the latest advancements in technology and strict government standards and regulations that have been framed for other industries are also fueling the market growth in this region. The market in Asia-Pacific and other regional markets are in growing phase and are expected to offer immense growth opportunities and scope for enhancement, mainly due to the companies in this region that are turning towards AFC applications and services in order to provide better service quality, performance, and capacity.

What is driving and restraining the market growth?

The significant growth of the worldwide market for automated fare collection can be primarily attributed to the factors such as benefits of cashless travel facility, rising need for solutions that enable congestion-free traffic, decrease in environmental pollution, and rise in government initiatives and investments in AFC. Moreover, shift towards open road tolling and increased demand for improved automation of public transportation systems are propelling the further growth of this market.

On the downside, high installation and maintenance costs, slow growth of this market in developed and underdeveloped countries, lack of inter-operability, and standardization among automated fare collection products are the key factors that are limiting the growth of this market.

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Competitive Landscape of the Market                     

The leading players operating in the global AFC market are Cubic Transportation, San Diego, California; Samsung SDS, Seoul, South Korea; Thales Group, La Defense, France; Indra, Alcobendas, Spain; and ST Electronics, Singapore; among others. These companies have been adopting certain strategies such as launching of new products and offerings in order to strengthen their hold on the market as well as expand their offerings to new clients. Furthermore, they are also looking to adopt various other strategies, such as mergers & acquisitions, partnerships, collaborations, and business expansion to cater to the needs of the worldwide automated fare collection market.

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