Term, “Account-based Fare System” sometimes causes confusion.
Traditional closed-loop cards store e-purse balance and some ridership information in their memory. Account-based fare systems move this data to a cloud. So, the card is used only to identify the cardholder-patron and his/her account. After having the account identifier obtained from the tapped card, the validator retrieves all the rest from the cloud. The cloud usually belongs to the transit agency and can be reached faster than a payment cloud (not true for wireless validators though). This is what account-based systems have in common. The differences are below.
First of all, the cards used in an account-based system can be open-loop, like Mastercard Pay Pass, or they can be closed-loop, not recognizable in the other account-based systems. Therefore, not all account-based systems are open-loop.
Second, open-loop systems are not always account-based. Though OpenFare is. The difference between the classic open-loop and OpenFare is the following:
- The regular open-loop systems use a remote cloud to keep accounts. This works well enough for transit systems with stationary validators because they are connected to the cloud with fast telecom lines
- OpenFare proactively synchronizes the data in its validators with the cloud, so the account data is right there, at the validator, when the validator needs it. This provides fast tap and decreases the fraud risk. This is important for transit systems applying wireless validators.
Proactive data synchronization becomes essential when debit cards are widely used in the fare system. It significantly decreases the risks for the fare system and costs of debit transactions for patrons.