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China Railway Rolls Out Contactless Tickets

2006-10-23

China's Guangshen Railway Co. will buy 125 million disposable contactless tickets over the next five years, believed to be the largest combined order of its kind, Finland-based vendor Confidex announced yesterday.

The railway, which carries more than 25 million passengers a year between the bustling southern Chinese cities of Guangzhou and Shenzhen, has experienced problems with counterfeiting of its paper bar-code tickets, Timo Lindstrom, CEO of Confidex, tells Card Technology. Guangshen Railway will order 25 million single-use tickets per year, each embedded with a simple contactless chip. Netherlands-based Philips Semiconductors will supply the chips, from its "Mifare UltraLight" line, he says. The project is scheduled to launch in October.

Lindstrom declined to disclose the size of the five-year contract, but says Confidex, a supplier mainly of RFID tracking and inventory tags and labels, is providing the contactless paper tickets to the railway for less than 15-euro cents (US$.19) each. That is substantially below the $.35 to .50 apiece disposable tickets generally cost transport operators elsewhere. Lindstrom attributes the low price to the large size of Guangshen's planned orders over five years and Confidex's experience printing low-cost RFID labels.

But he says the company is prepared to supply much lower volumes, for example 10 million units, of disposable contactless tickets to other transport operators for less than 20-euro cents each. This could help open the market for these essentially single-use tickets, which has failed to take off as expected, he says. Mass transit operators rolling out more permanent contactless cards for their regular riders usually continue to issue magnetic-stripe paper tickets for their occasional customers."That creates a problem, first of all, from a maintenance point of view; they have to maintain parallel technologies�Ccontactless and mag-stripe," he says, "They have not been able to go fully contactless because of the lack of low-cost limited-use tickets."

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