Genfare APIs and banks
Intelligence of Things

Why APIs Are Crucial To Smart Transit’s IoT Growth

From London’s Underground to NYC’s MTA, transit systems are digitizing ticket purchasing to boost ridership and reduce consumer friction. But most still rely on old-school physical vending to facilitate purchases, which can cause data and cash flow issues. In this month’s Intelligence of Things Tracker, Eric Kaled, president of smart fare solutions provider Genfare discusses the viability of application programming interfaces (APIs) to optimize transit services, and why a one-size-fits-all approach to APIs doesn’t work.

Application Programming Interfaces (APIs) possess great potential, but are vulnerable to misunderstandings. They have become a global business concern and are critically important to several industries’ and technologies’ growth — including those relating to the Intelligence of Things (IoT). APIs underpin many of the platforms and sensors that connect IoT-enabled tools like smart home devices and mass transit systems, but a few inaccurate assumptions hamper their usability.

A common supposition exists that APIs are one-size-fits-all, Eric Kaled, president of solutions-based smart city fare collection firm Genfare, noted in a recent interview with PYMNTS.

“I hear that a lot,” he said. “ ‘Oh, it is just an API. It should not be that hard, it should not cost that much money, it should not take that long.’ … I think that setting the right expectations and really understanding that [companies] have to design [these APIs is important]. You have to know what you are trying to get, [which data you are] trying to extract [and] how you are going to extract it … [The process] is a little more complicated than what people assume.”

APIs are essential to Genfare’s mission of eliminating transit systems’ technological barriers to employing smarter, IoT-enabled solutions. The company’s cloud-based fare collection solutions, which provide digital and mobile support for the Capital District Transportation Authority (CDTA) in Albany, New York, Porterville Transit in Porterville, California, and other U.S. transit systems, rely on them. APIs allow Genfare to more easily connect platforms to each other and to end customers, but further innovation will require education on their abilities and design process, Kaled explained.

API design and IoT data flow

APIs suffer from problems similar to those of artificial intelligence (AI) or blockchain in that their hype often exceeds their present usefulness. The interfaces are just bits of code that help platforms communicate, after all, but those connections must be tailored for each use case. Optimizing those connections is crucial for smarter transit or other IoT growth, he said — especially as systems become more complicated. Maintaining the flood of data separate transit systems’ payment types generate daily is nearly impossible without APIs, for example.

Kaled added that transit systems typically have four or five points of sale for fares: physical checkout registries, ticket vending machines, fare boxes on transit vehicles and mobile apps. Authorities often have one digital solution to handle mobile app payments but do not collect data for credit or cash payments, which can lead to data and cash flow problems.

“If you have one solution that just provides the mobile application [information] but does not provide the other peripherals for these other channels, how do you hook in all of the data into one system?” he said. “You [cannot]. … A transit agency [then] has to log into one system to get the [mobile] data, then log into another system to get the [other] data, then somehow aggregate it to one file, then try to
build reports out of that … It gets pretty complicated pretty quickly.”

Genfare develops solutions to ease data aggregation and categorization, but the company still confronts API-related misunderstandings as it builds outsmart transit partnerships. The transit world exhibits concern about the data transparency and connectivity they make possible.

“I think the [industry] norm is hesitation [when crafting] APIs with other [companies],” Kaled said. “I think the norm is, ‘We are a platform. Use us [and] we will take your data,’ but we are not sure we want to share our data. … I think that mentality is what brings up what I call the technology barriers [for] transit agencies [with] less funding, less resources, less people to help do this, [which makes] it more difficult for them to support and provide good solutions for all our end customers.”

Changing API expectations

Ensuring transit authorities with fewer resources can access API-driven solutions will allow them to build smarter transit systems. The transparency such interfaces provide will offer greater connectivity for consumers and providers, especially as they increasingly rely on IoT-enabled devices and connected vehicles.

“The more we can [provide] that [transparency] and have technology providers be willing to do that, it [will] make it easier for transit organizations and … for the end rider,” Kaled said. “By the same token, the transit agency has to have the same [API] expectations as the provider. … It takes time, it takes design, it takes development. It is a product when you build an API.”

APIs will continue to grow in sophistication alongside the rest of the IoT space, but reasonable growth expectations are important. Rising connectivity in industries like transportation only makes the IoT world more complex, meaning successful providers will need full awareness of how they can realistically use tools like APIs for maximum benefits.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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