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The AFC systems market is estimated to grow at a CAGR of 9.72% between 2022 and 2027. The market size is forecast to increase by USD 4,672.71 million. The growth of the market depends on several factors, including successful applications of various technologies, increasing demand for cost-effective public transportation solutions, and government initiatives to promote the adoption of AFC systems.
This AFC systems market report extensively covers market segmentation by component (hardware and software), application (railways, parking, entertainment, and others), and geography (North America, Europe, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The successful applications of various technologies are notably driving the market growth, although factors such as growing concern for data privacy and security impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the key factors driving the AFC systems market growth is the successful applications of various technologies. Due to dynamic technological innovations such as mobile ticketing, radio frequency identification (RFID), and NFC, the global AFC Systems Market is expected to have exponential growth in the coming years.RFID is another significant technology used in AFS systems for identification, payment, and security purposes which along with embedded systems and RFID tags, leads to an improved and efficient automated train ticketing system.
One of the main applications of RFID includes metro stations that use RFID reader circuits that facilitate the calculation of ticket charges. For instance, Metro systems in India, such as DMRC, Kolkata Metro Rail Corporation Ltd., Rapid Metro Gurgaon Ltd., Bengaluru Metro Rail Corporation Ltd., and Mumbai Metro Rail Corporation Ltd., use RFID tokens and smart cards. Hence, such applications are expected to drive the demand for the global Automatic Fare Collection (AFC) Systems Market growth during the forecast period.
A key factor shaping the global AFC systems market growth is the growing focus on paperless transactions. Due to the increasing pollution which has an adverse effect on the environment, various governments across the world are undertaking initiatives to reduce deforestation and environmental pollution. For instance, governments around the world are promoting digital transactions to reduce the use of paper and save trees.
Thus, the growing focus on paperless transactions has encouraged the AFC systems market to generate e-tickets that are sent via messages or e-mails. consumers prefer e-tickets because they can book tickets at their convenience and store them on their personal devices. Additionally, these digital bills contribute significantly to the environment by eliminating the need for hard copies of tickets. Hence, such factors are expected to drive the demand for the global Automatic Fare Collection Systems Market growth during the forecast period.
The growing concern for data privacy and security is one of the key challenges hindering the global AFC systems market growth. Data privacy and security concerns pose a significant threat to the global AFC system market due to the increasing use of electronic payment systems, the amount of personal and financial data being processed and stored has grown significantly.
Thus, it has made the AFC system an attractive target for cybercriminals, who try to exploit loopholes in the system to gain unauthorized access and steal data. For instance, according to Tenable 2022 Threat Landscape Report (TLR), APAC and Japan region accounted for 68% of the total of the 2.29 billion records exposed globally, in which India holds 450 million data beaches. One of the key reasons for this is the rapid use of smartphones and the lack of awareness about safe and secure ways of using the Internet. Therefore, such data privacy concern is expected to hinder the global AFC Systems Market growth during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global AFC Systems Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
GMV Innovating Solutions SL: The company offers AFC systems such as ticket configuration systems, and online and station equipment.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the hardware segment will be significant during the forecast period. Hardware is one of the key components of the functioning of any AFS system as they facilitate the necessary infrastructure for automated fare collection and processing. Another key hardware component in AFC systems is the AFC gates which are widely used in various modes of transportation, such as airports, metro stations, and bus terminals.
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The hardware segment was valued at USD 3,644.12 million in 2017 and continued to grow until 2021. Another significant hardware component is the ticket vending machine (TVM) which has a wide variety of applications in various payment gateways and provides several payment options such as cash, checks, debit cards, credit cards, mobile payments, and electronic bank transfers to passengers. Also, these devices are equipped with touch screens, cash and card payment terminals, and receipt printers. Some of the key hardware components in AFC systems include automated passenger counting (APC) systems that accurately track the number of passengers entering and exiting the vehicle, as well as security cameras that enhance passenger safety. Thus, such applications of hardware components are expected to drive the global AFC systems market growth during the forecast period.
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North America is estimated to contribute 26% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. North America is one of the dominant markets in the global afc market as it is an early adopter of innovative products and services. For instance, TransLink offers a Tap to Pay feature that allows customers to pay their fares by tapping a contactless Visa or Mastercard credit card or a mobile wallet at fare gates and on buses in the US. Another significant application of the AFS system is in sports and events which makes transactions secure and convenient. For example, there is a rising trend of mobile ticketing and acceptance of near-field communication (NFC)-enabled smartphones as contactless smart cards in sports arenas, such as American football stadiums. Hence such developments are expected to drive the global AFC systems market growth in the region during the forecast period.
In 2020, during the COVID-19 pandemic, the growth of the global AFC systems market witnessed a significant slowdown due to the decline in ridership, which has led to a decrease in revenue for transportation companies, resulting in a reduced budget for upgrading and maintaining their AFC systems in North America. However, in 2021, the initiation of large-scale vaccination drives?lifted the lockdown and travel restrictions, which led to the reopening of transportation facilities, theatres, and sports venues. Such factors are expected to drive the market during the forecast period.
The AFC systems market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global AFC systems market as a part of the global systems software market within the global IT software market. The super parent global IT software market covers companies engaged in developing and producing applications and systems software Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
AFC Systems Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Decelerate at a CAGR of 9.72% |
Market growth 2023-2027 |
USD 4,672.71 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
9.5 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 26% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Atos SE, Chinasoft International Ltd., Cubic Corp., Dormakaba Holding AG, Gaoxin Modern, GMV Innovating Solutions SL, GRGBanking, Gunnebo AB, Indra Sistemas SA, KML Technology Group Ltd., Leadway Tech, LECIP Holdings Corp., LG Corp., Masabi Ltd., Nippon Signal Co. Ltd., NXP Semiconductors NV, OMRON Corp., Scheidt and Bachmann GmbH, Shanghai Huaming Intelligent Terminal Equipment Co. Ltd., Siemens AG, STMicroelectronics NV, and Thales Group |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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