Kochi Metro: Axis Bank wins cloud based AFC solution on Debit Cards for Kochi Metro


Kochi: Axis Bank has signed a first-of-its-kind agreement with Kochi Metro Rail (KMRL) for implementing the latter’s Automatic Fare collection System (AFC) with a debit card, after winning an international competitive bid. The bank will issue co-branded debit cards to the users of the Kochi Metro system, which will double up as a metro ticket.

The Mumbai-based bank has agreed to pay a royalty of Rs 209 crore to KMRL over the next 10 years for the right, apart from investing the entire funds required for the AFC infrastructure across its stations, including phase-ll. Moreover, the entire maintenance of the AFC system for 10 years will also be undertaken by the bank.

In addition to this, 20% of Axis Bank’s gross revenues, from the utilisation of this debit card outside KMRL’s ecosystem in various mercantile outlets and internet transactions, will also accrue to KMRL over the next 10 years. KMRL claimed that it is the first time such an innovative model is being launched anywhere in the world. This business model is expected to change funding models for AFC systems in the metro industry globally.  KMRL, which is looking at expanding its services to water transport in the city, under the proposed Unified Metropolitan Transport Authority, will offer the smart card system in ferry services as well.

“This model of external investment in critical components of the metro system is a `win-win’ proposition for all the three stakeholders – the public, the metro administration as well as the bank”, said Elias George, managing director, KMRL. “The bank will also pay an additional royalty of Rs. 209 crore to the Kochi Metro Rail Limited (KMRL) over the next 10 years for retaining the right to be KMRL’s partner in this endeavour,” he said adding, “the bank will also ensure operation and maintenance of the AFC system for 10 years. It will issue co-branded debit cards to the users of the metro system. In addition, the KMRL will get 20 per cent of the bank’s gross revenue (which is approximately a percentage of the purchase value of merchandise from shops or online purchases) over the next 10 years”.

Terming this as a business model which would have global ramifications, Mr. George further said it was for the first time that such an innovative model was being launched anywhere in the world. “This model which we designed is expected to change funding models for AFC systems in the global metro industry. The big sum saved by way of capital and maintenance cost and the Rs. 209-crore the bank will pay us will be used for metro’s operation and expansion projects,” he said.

Axis Bank will have a unique opportunity to populate their card in the metro ecosystem and in Kochi city, with a net addition of new clientele.  The Automated Fare Collection (AFC) system is a critical component of any metro system since it involves complex Hardware and Software installed at entry points of metro stations as well as in buses and boats.

The system uses Radio Frequency Identification Devices (RFID) to collect fares from the users of the urban transportation systems. The RFID card is contactless and will click when commuters cross sensors placed at metro stations. They can also order merchandise online using the card and collect them from the stations. The card can also be substituted by installing an application in cell phones.

In such a system, the metro ticket can be in the form of a co-branded debit card or an NFC-enabled smartphone or a ‘patch’ on a mobile device or any other surface with NFC (near field communication) stickers or QR code (quick response code), or even as a paper-coupon, Kochi Metro Rail Limited (KMRL) sources said.

The normal practice in metros worldwide is for the metro company to invest their own funds into the capital expenditure.  “However, the KMRL decided to go in for a completely different paradigm, where we invited competitive bids from various Indian banks to invest the entire capital expenditure on the AFC system, in return for their right to use co-branded cards and co-branded software on our Metro system, which will function both as a debit card of the bank as well as a ticket for the metro,” sources said.


The bank-investment model has great advantages for the citizens of Kochi because the commoner who uses the metro system will have the opportunity to obtain a co-branded debit card, which can not only be used for transportation requirements, but also for mercantile and internet transactions. The card can be linked with any bank account of the user in any bank.

The KMRL is also planning to start a drive for including a variety of local and national goods and services that can be accessed using the KMRL-Axis Bank co-branded card.  This is also for the first time that the AFC solution has been enabled on the ‘Cloud’ in line with KMRL’s IT philosophy of ‘open standards on the Cloud’.

In addition to the co-branded card, the bank will also develop a mobile app, which can be used for ticketing and e-commerce. “This initiative is also unique in that it is for the first time that ‘open-loop’ smart cards are being introduced in the metro system.  The Union Ministry of Urban Development has mandated that all metros must have an integrated smart card system for seamless integration of commuting modes,” KMRL officials said. To achieve the goal, the metro agency had appointed Ernst & Young as consultants for drawing up specifications for the smart card system.

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