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(Sharecast News) - Tracsis announced on Wednesday that it has secured a multi-year contract with the Rail Settlement Plan, a division of the Rail Delivery Group, to implement the core 'Tap Converter' system to facilitate pay-as-you-go (PAYG) travel across the National Rail network.
The AIM-traded firm said the contract followed a competitive bid process, and would build on Tracsis' existing smart ticketing technology already in use by six train operating companies.
It said the Tap Converter system would process tap data from smartcards, contactless bank cards and mobile apps, calculating the best fare while automatically applying discounts and fare caps.
The technology would also integrate with multiple transport modes, supporting a London-style PAYG model for rail, bus and tram services.
Development of the system would start immediately, with deployment and revenue generation expected to start next year.
Tracsis said that all development costs were fully funded, with the contract guaranteeing a minimum annual operating fee.
Additional revenue would be tied to transaction volumes, with PAYG adoption expected to grow over time.
The company estimated that, in the medium term, PAYG transactions processed through the Tap Converter system could account for 10% to 15% of total annual rail passenger journeys, with commuters driving the highest adoption rates.
In 2024, Tracsis processed 2.25 million PAYG journeys and recently expanded its PAYG deployments in Wales and Scotland.
The company said it expected transaction volumes to increase ahead of the Tap Converter system's rollout.
There was no change to Tracsis' financial expectations for the year ending July following the contract win, with the company to provide a trading update on 26 February.
"We are delighted to be working with the Rail Delivery Group and Great British Railways Transition Team (GBRTT) to deliver this important pay-as-you-go ticketing solution on a nationwide basis," said Tracsis chief executive officer Chris Barnes.
"The contract represents a major milestone in our smart ticketing technology journey, with the potential to grow into a valuable, long-term partnership over time."
Barnes said digital transformation was "integral" to the rail industry's future.
"The government has made a commitment to expand pay-as-you-go ticketing across urban areas on the National Rail network, and the Tap Converter system will position Tracsis as an important technology provider at the heart of this transformation."
At 1429 GMT, shares in Tracsis were up 16.67% at 420p.
Reporting by Josh White for Sharecast.com.
