We are going to take the unusual step of starting this blog by asking you to stop reading. Instead, we request that you go to Google and search for “open loop vs closed loop”.
You won’t actually need to type all the words, because part-way through, Google will predict what you want to ask and offer to auto-complete the question. And that’s because this is something that gets asked a lot.
This is frustrating because, at least as far as public transportation goes, it’s the wrong question to ask.
As Pcentra’s Moshe Kahane powerfully outlined during a recent Intelligent Transport webinar titled ‘Transforming customer journeys’, focus upon Open versus Closed Loop overlooks the fact that neither solution delivers for everybody. And it therefore prevents us from providing the best possible service for passengers.
As Moshe explained, Open Loop works well for the majority of occasional passengers. But majority doesn’t mean everyone. Moshe suggested that in some regions as many as half of passengers may be either unbanked, young, senior citizens or entitled to concessions – and these people are often simply left behind by Open Loop payment systems.
Instead, Pcentra is suggesting augmenting Open Loop networks with ‘Remote SAM’ capabilities. In essence, this approach enables transport providers to offer passengers a unique combination of Open and Closed Loop solutions without any infrastructure or hardware changes – which we call ‘Mixed Loop’.
As pointed out to the webinar audience, it is the job of technology providers to deliver solutions that truly meet the needs of passengers. And in the case of payments systems, it seems that an obsession with the merits of Open and Closed Loop networks risks leaving people behind.
So, let’s stop asking the wrong question: the right question is how do we deliver a system that enables everyone to travel quickly, easily and conveniently? We believe Mixed Loop is the answer.