Automatic fare collection (AFC) is the system of gates, readers and a back office that works out each fare, keeps the accounts and shares the money among operators when one trip uses several. It is the technology behind a metro card and a city bus pass.
Riders pay in two main ways. A closed-loop card works only on that one system, such as a city's own metro card. The rider loads money on it, and each tap deducts the fare. With open-loop ticketing, the rider taps a card issued by a bank, and the transit system treats it like its own. A paper or phone QR ticket is a third way, read by the gate's scanner.
The back office is the large part. Every tap at a gate or on a bus reader is sent to it. It works out the fare from the stations or stops, keeps each rider's account, and splits the money between operators. It also applies concessions, such as lower fares for students and senior citizens, and it keeps a list of blocked cards that every gate checks. If the back office stops, the gates can still open from their stored list, but the money cannot be settled until it recovers.
Consider a rider in Kochi whose one trip uses a metro and then a feeder bus, with a fare of ₹40 on the metro and ₹20 on the bus. The back office records both taps. It charges the rider ₹60 in total. Then it pays ₹40 to the metro company and ₹20 to the bus company. Without a shared back office, the rider would buy two tickets and the two companies would never have to settle with each other.
A card can be topped up with a digital wallet, and bus tickets are sold in a bus tracking and digital tickets app. Bank card taps travel over the card network, and the charges are collected by an acquiring bank. India's National Common Mobility Card (NCMC), a RuPay card issued by banks, aims to let one card pay for metros, buses, parking and shops across the country. Cities buy these systems through government tenders, and the systems run for decades. See also fare collection and tolling.