Touchless walkthrough transit gates coming in 2020, Mobile Suica eTickets more popular than ever

Mobile Suica has been under a lot of stress this week. The cloud service almost went down under a heavy load on November 26, at the same time the Suica App has shot up in the App Store Japan rankings, briefly touching the top 3 which is unusual. At first I scratched my head then remembered that Mobile Suica Shinkansen eTickets become available 30 days in advance, and that means the New Year vacation period. But the unexpected Mobile Suica load and Suica App downloads signal something else: more first time Suica App users than ever before.

Even though Mobile Suica Shinkansen eTicket purchases are not eligible for CASHLESS rebates, it looks like more Japanese are taking the opportunity to go cashless this year with many first time users signing up for a Mobile Suica account and going all in with Apple Pay Suica/Google Pay Suica. Discounts on some advance Shinkansen eTickets are also pretty good.

In other news Kyodo reports that JR East is developing a new ‘touchless’ walkthrough gate with an overhead antenna design that lets users keep Suica in a bag or pocket. No more waving cards and devices over a reader. It’s also big help for left handed people, Apple Watch Suica users and wheelchair users. Field tests are expected to start in 2020 with a rollout in 2~3 years. It sounds like a perfect match for the new eTicket system that JR East will launch in April 2020 and Super Suica coming in April 2021. It will be Super Suica all the way, we are entering the final years of magnetic strip paper ticketing.

It would be great fun if a few JR stations near Tokyo Olympic venues could have a few walkthrough Touchless gates installed for inbound Apple Pay Suica users to try out. Great for travelers with both hands full. Look ma, no hands! Take that QR Code fans.

UPDATE
It looks like Kyodo News is playing somewhat loose with their reporting. Ever reliable IT journalist Junya Suzuki contacted JR East for confirmation. JR East confirmed the basic story that they are developing a Touchless gate but have not committed to a rollout schedule. The picture that ran with the Kyodo piece is an older photo of an exhibition demo unit and not necessarily the Touchless gate, or the Touchless gate technology in development.

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Fields of Dreams: the endlessly looping open loop vs closed loop transit debate

MacRumors reported that Apple Pay Express Transit support is finally arriving, bit by bit, on the TfL system after being announced back in May. I only noticed the piece because somebody threw a link to my site in one of the forum comments and the discussion has some interesting, and deliciously snarky, open loop bank cards for transit vs. native transit card debate.

The ‘Japan has a transit IC card problem’ angle is interesting. Yes, Japan does have a transit IC card problem, if you work for a bank credit card operation that wants to promote open loop, which I suspect is the case in the forum debate. The counter argument presentation-like power points are just too glib: to date no major transit system has junked native transit cards for bank cards, not even Oyster. Transit is a license to print money and the huge transaction volumes in Tokyo alone are mouth watering. The ‘problem’ for bank card players is how to angle for a bigger cut of the action.

The debate perfectly represents the plastic era transit card vs credit card mindset. More interesting to me are the things people don’t discuss: the impact of Apple Pay and Google Pay digital wallet platforms and transit business models. My take is that smartphone digital wallets do away with old plastic era distinctions and create new business opportunities for transit companies, if they chose to pursue them. Most don’t.

Tech analysts love to talk about ‘value capture’. The current cashless payments frenzy in Japan is all about capturing users to sign on with a payment platform then growing the ecosystem with more and more services that users, hopefully, want to pay extra for. Nobody talks about this in the open loop vs closed loop debate. The bank that owns the credit card owns the customer going through the transit gate, not the transit company. Put it this way, JRE POINT that go back into free Suica recharges, Green Car upgrades, etc. are vastly different from bank card points, as are the business platforms they feed customers back into. Moving people are money in motion, who gets a cut and what businesses do with that cut is everything.

It an interesting paradox that Europe and America talk about privatizing public transportation in various degrees but to date only Japan and Hong Kong have built highly successful businesses based on ‘value capture’. The endless open loop vs closed loop debate always comes down to this: you can argue all you want about the parts but in the end it is meaningless. To truly understand things, you have to examine the whole business model, how everything fits together, and how that can benefit everybody while growing and evolving.

Remember QR Codes? Well they’re the future…again

Hacker News and Reddit have very different user audiences but each have their share of ‘my experience is the world’ navel gazers. This is a plus: the comments are fascinating to read. The Andreessen Horowitz site posted a piece by Avery Segal, Remember QR Codes? They’re More Powerful Than You Think. Somebody posted it to Hacker and somebody else posted a link to my Transit Gate Evolution piece in the comments. I think it’s hilarious and insightful that somebody can look at the same QR code transit video in the piece and write, “The QR code video shows a ton of people going through the turnstiles quite fast.” A ton? Fast? I guess the commentator never experienced rush hour Shinjuku station gates.

Segal’s piece is a simple Mainland China travelog highlighting all the things people can do with a WeChat/Alipay account and WeChat Pay/Alipay integrated QR Code smartphone apps there. There is very little analysis and the opening paragraph reads more like PR, which it probably is. After all, Andreessen Horowitz is a venture capital firm though I can’t figure out if Segal is trying to sell WeChat/Alipay or QR.

Companies in the US have been slow to adopt QR codes, but those who dismiss them as having “been around forever but never taken off” underestimate their wide-ranging potential. Camera-based solutions like QR codes (or facial recognition, for that matter) can make traditionally clunky user experiences seamless and intuitive. QR codes connect our online identity to the offline world, allowing users to essentially log in to physical locations—and bring their data with them. This delivers a number of benefits: brands learn user preferences, while customers gain a more tailored and social experience, as well as perks like automatic loyalty programs built into every transaction.

The Hacker News crowd discusses the pros and cons of QR vs NFC, but I think that they along with Segal completely miss the point: it’s not the technology, it’s the service layers built on top of it and how well they integrate that really matters. Actually it’s the only thing that matters.

The Suica example. FeliCa is great NFC technology but nothing great by itself: the Suica card format built with FeliCa, the nationwide Transit IC card inter-compatibility built around the Suica card format, the Transit IC eMoney standard built on top of that, Mobile Suica, Apple Pay…each new service layer builds on the previous layers and adds value to the whole. The value is the quality of integration, a sum greater than the total of parts.

There are multiple layers in Apple Pay Suica but they all work as one.

The Transport for London Oyster card by comparison is not compatible with other UK transit cards. Oyster can be used for transit in the London pay as you go area (but reaching its limit) but does not integrate with anything else. TfL has put effort into EMV contactless bank cards for transit instead of developing new services and growing Oyster, but it’s interesting to ponder what the UK could have built by following a Suica-like transit platform business model.

China is a very different country and transit infrastructure isn’t a business. I’m sure that Alipay and WeChat Pay were allowed on host their QR code services on ‘public infrastructure’ because it also benefits the Chinese Communist Party in some way and helps the CCP steer society where it thinks it should go.

There is another important aspect that Segal and the Hacker crowd fail to see or discuss: central processing vs. local processing. The whole point of Transit Gate Evolution was explaining the Apple Pay Suica secret: a great local processing front-end (FeliCa/NFC-F/Suica) integrated with a great central processing back-end (Mobile Suica + Apple Pay EMV credit/debit cards). Segal assumes that central processing is everything and that the internet, mobile networks and cloud services are always going to work everywhere 100% of the time. They don’t.

Nobody talks about the implications of NFC tag Apple Pay that Apple is already field testing either. These topics would make for a great discussion. Unfortunately nobody seems up to the challenge.

Hands Free Suica

After iOS 13.2 hit the final beta I migrated my Suica from iPhone to Apple Watch to give watchOS 6 Apple Pay Suica a proper shake down. Even after only a few days I can already say that Apple Pay Suica performance on watchOS 6 is far better than any version of watchOS 5. Not only does it feel more responsive, Suica Express Transit seems more sensitive further away from the gate reader hit area, crazy as that sounds.

Going back to Apple Pay Suica on Apple Watch also brings back a great feature I missed on iPhone: hands free Suica. Incredible as it sounds, Apple Watch is still the only wearable device for Suica, the only choice for hands free Suica. Once you get used to hands free Suica Express Transit with Suica Auto Recharge, it spoils you for any other kind of cashless payment. Hands free shopping and transit is a breeze that makes everything else feel like a huge step backwards.

Apple should be marketing the hell out of it in Japan but don’t. What a waste of a huge and exclusive marketing opportunity. When Apple Pay Octopus finally, finally, finally launches, I expect Hong Kong Apple Watch users will really appreciate hands free Octopus.

JR Central Online EX Ticketing Extends to Kyushu Shinkansen in 2022

JR Central/JR West/JR Kyushu issued a joint PR release that JR Central’s EX Shinkansen eTicket system, encompassing both EXPress Reservation and smartEX services, will be adding JR Kyushu Hakata~Kagomashima Shinkansen ticketing in spring 2022.

2022? If it’s going to take that long why bother announcing it now? I am sure that part of the reason for the long lead time is the next generation Suica card architecture (Super Suica) and FeliCa OS update coming in spring of 2021. All nine of the Suica sister transit IC cards under the Transit IC interoperability umbrella will need to switch over to the new transit card format to maintain compatibility: Suica, Toica, ICOCA, SUGOCA, Kitaca, PASMO, namaca, Hayaken, nimoca.

Right now Mobile Suica is the only transit card on mobile, and mobile offers service extras like downloadable Shinkansen eTickets. The next generation Super Suica format will likely extend mobile capability and mobile service extras to all nine cards. At the very least JR Central will have to retool the EX system for the new card architecture while maintaining compatibility with the current card architecture. It makes sense to upgrade the current EX system areas first and add Kyushu Shinkansen ticketing last.

Meanwhile, JR East is due to rollout a new eTicketing system in spring 2020.

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Japan Transit IC Map, outside white area cards are due to join Super Suica in 2021