SoftBank Outage Outs QR Code Weakness

The December 6 Ericsson induced SoftBank network outage could not have come at a worse time for SoftBank. The outage took down voice, data and SoftBank WiFi hot spots along with the just launched SoftBank/Yahoo Japan QR Code PayPay platform which was already off to a rocky start. Line Pay experienced serious problems as well.

Many SoftBank iPhone users on Twitter assumed Apple Pay Suica wouldn’t work without a network connection and they would be stranded, but this was not the case, Apple Pay works fine without a network connection. As Apple says in Using Suica on iPhone or Apple Watch in Japan:

Your iPhone or Apple Watch must be turned on, but it doesn’t have to be connected to a network. You don’t need to wake or unlock your device or open an app when you enter or exit the ticket gates. You’ll see Done and a checkmark on the display.

A network connection is necessary only when recharging Suica with Apple Pay, but not for an old fashioned cash recharge which can be done at any convenience store checkout, JR station smart charge kiosk or 7-Eleven ATM.

The network outage clearly reaffirmed the strengths of stored value cards like Suica: payment transaction processing is local and works without a network, stored value money and adding cash works anywhere, anytime. The outage also highlighted the perpetual QR Code weak point, they don’t work when networks are down.

There is also an important but overlooked advantage in this age of digital wallets, Suica is also a plastic card, the ultimate portable hardware backup in case of emergency or for elderly people who don’t like using mobile phones for anything other than, you know, talking.

The lack of a physical backup is what ultimately kills QR Codes as the front end transit payment solution. QR Codes will always work best in the role they are suited for: a backup role for adding money to smart cards or one-off ticket/coupons when neither time nor speed is a concern.

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