Now that the monthly economic magazine ‘Diamond’ has run it’s annual, “open-loop ticketing is the future so JR East is going backwards sticking with Suica” hit piece, piling on so much nonsense that they list JR East as a bankruptcy risk, it’s time to review some business fundamentals that Diamond writers miss, or purposely ignore.
As I have pointed out in endless posts, the hoary old EVM open-loop vs FeliCa closed loop debate is dead. It’s not about NFC technology, it’s all about ecosystems now. Going all in with EMV open loop means buying NFC chips from official EMV suppliers, certifying NFC equipment with EMV official certification companies, paying a percentage of all transactions to EMV payment networks, and letting EMV companies (VISA, Mastercard, JCB, UnionPay) make money selling transit transaction traffic analysis.
These are money making business items that JR East keeps in-house so they can call the shots because believe me, when you give those away, they never come back. And then credit card companies start calling the shots. JR East’s Suica Eki-Karte service for example, is impossible with open loop on the gates, it becomes a bank service and we all know how profitable selling user transaction analytics is in the digital age. Why give it away?
The more power we give to EMV payment networks, the more power they have to control our lives. Witness the current controversy of credit card payment networks censoring Japanese anime content creators they don’t like, in this case another DEI activist scam. Same for conservative content creators labled as ‘racsit’ or ‘hate speech’ by politically activist accreditation organizations like Southern Poverty Law Center. Which makes Trumps recent presidential election victory all the more interesting: both Trump and Bernie Sanders are both on-board with capping credit card interest rates to 10%. A far more populist move than mainstream Democrats ever dared. Here’s hoping they don’t stop there. For the sake of a healthy world economy, the VISA / Mastercard duopoly needs serious, healthy competition and regulation.
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