Suica Platform Market Info Update

JRE Points

JR East released some more Mobile Suica / Apple Pay Suica market data via Payment Navi. Suica market basics as of February 28 2018:

  • Suica cards issued to date (plastic and Mobile Suica / Apple Pay Suica) : 68 million
  • Stores that accept Suica e-money payment: 450,190
  • Suica compatible NFC store terminals: 814,680
  • Highest recorded daily Suica transactions (August 25, 2017): 6.64 million

That might not sound impressive at first but considering that 7-Eleven has 2,600 stores in Tokyo, you begin to appreciate the scale that is the Suica Platform.

On the Mobile Suica side JR East recorded 140,000 new Mobile Suica users the first full month that Apple Pay Suica was online (November 2016) , a 700% YOY increase compared to November 2015. Longer term Mobile Suica growth was 20% the first year of Apple Pay Suica service @ 990,000. Total Mobile Suica membership as of December 31, 2017 was 5.2 million.

It’s not clear if the JR East numbers include Apple Pay Suica users who are not Mobile Suica members: users who just add a Suica card to Apple Pay but don’t use the Suica App. I suspect not as JR East reported slightly different Mobile Suica user growth numbers previously.

Even after more than 10 years of Mobile Suica service and 1 year of Apple Pay Suica service, less than 10% of the Suica install base use Suica on mobile devices. There’s plenty of growth potential but as I pointed out in Apple Pay Japan One Year Mark, the next stage of Mobile Suica growth depends on JR East’s ability to negotiate commuter pass agreements with other transit companies that allow Mobile Suica commuter passes in non-JR East regions such as Nagoya or Osaka. That would let Suica, especially Apple Pay Suica, break out of the Tokyo region box.

JR East is building up the Suica Platform in other ways: a streamlined loyalty point system and inexpensive easy to deploy thin client POS terminals.

Goodbye Suica Points, Hello JRE Points
The different JR East loyalty point systems were confusing. We had Suica Points and View Card Points that were not easily exchanged or converted. Starting in late 2017 JR East rolled out yet another point system, JRE Points, that will replace and merge everything into one thing. Suica Points have already been rolled into JRE Points, View Points will be rolled in starting in June 2018.

If you have ever used the JRE Point App you already know that JR East has a lot of work to do if they want JRE Points to be easy to use as Apple Pay Suica. JRE Point App is the kind of app that screams to be a NFC tag thing instead of forcing users to use a plastic card to get those JRE loyalty points. The current JRE Point App does let you convert JRE Points into a Suica Recharge but that’s about it. Also be careful to turn off JRE App background GPS use, it’s a real battery suck.

The JRE Point marketing rocket is just getting off the ground. Once View Points are rolled into the new system I think we’ll see some interesting JRE Point campaigns from JR East as summer gets into high gear. If they work out the NFC tag thing, it could all be great.

Android Thin Client Suica Payment Terminals
Up until now Suica Payment terminals have been ‘rich clients’ that processed payments locally. JR East feels confident enough with the robust Japanese Internet and 4G infrastructure to offer a low cost ‘thin client’ POS payment terminal, the same yet-to-be-named Android smartphone based POS terminals that JR East installed along the Joban line in February. JR East developed it with Nippon Restaurant Enterprise Co. Ltd. based on mobile Suica reader technology created for Shinkansen food service carts and vending machines.

This simple and easy to use device communicates with the Suica payment processing cloud service and works out of the box. It’s an easy choice for small shops who don’t want to bother with the complexity or cost of a CARDNET or Rakuten Pay.

Last but not least JR East said they are “considering” English language versions of Suica App (iOS) and Mobile Suica (Android) for inbound visitors to Japan in time for the 2020 Tokyo Olympics. I can understand why JR East is taking time on this. It will be a big support cost because they’ll have to setup an English help desk in addition to localizing the apps, all for a tiny part of their customer base who love to complain.

One more thing, last week Goldman Sachs rated JR East stock a buy.

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