Open-loop ticketing is a way of paying for public transport in which riders tap a card or phone issued by a bank, instead of a special card issued by the transit system. It is called open-loop because the card belongs to the bank and works in many places, not only on one transit system. A closed-loop card, in contrast, works only on one system. For the rider, there is nothing special to buy and no queue at a ticket counter.
In India, the open-loop card is the National Common Mobility Card (NCMC). It is a RuPay card that banks issue as a debit, credit or prepaid card. The card has a small prepaid balance stored on the card itself, which the rider tops up from the bank account through the bank's app. The same card can pay a metro fare, a bus fare, parking and a purchase at a shop. Because the balance is on the card, the gate can deduct the fare without calling the bank, and so it works in under a second even in a tunnel with no network.
The gate reads the chip on the card. When a rider pays with a phone, the phone sends a token in place of the real card number. The gate also checks that the card is not on a blocked list. A blocked list is a list that the back office sends to every gate. At the end of the day the back office, which is part of automatic fare collection, adds up the day's taps and settles the money with the banks through the card network.
Consider a rider whose card is stolen. She reports it to her bank in the evening. The bank blocks the card, and the transit system adds it to its blocked list. The list is copied to the gates overnight. The next morning, the gate refuses the stolen card, but until the list reaches the gates, a tap could still pass. This is a small risk that systems accept to keep gates fast.
Here is what is and is not available in India today. NCMC cards from many banks are accepted at the metros of several cities, including Delhi, Mumbai, Bengaluru and Chennai, and at some bus services, but not at every line, gate or bus. What is not yet common is the London model, in which a rider taps any contactless bank card, with no special balance, and the fares for the whole day are priced afterwards and capped at a daily limit. That is how it works in London, which made the idea popular. In India, a rider mostly needs an NCMC card or a QR ticket, and the daily cap is not yet offered in most places.
The wider scene is fare collection and tolling.