Another week, another new JR East gate design

JR East sure has a lot of irons in the fire. We have Super Suica, the new eTicket system, the Touchless walkthrough gate, and now we have yet another new gate design mentioned in yesterday’s press event release for the new JR Takanawa Gateway station due to open in spring 2020.

This 2nd design is supposed to be wheelchair friendly with the Suica reader on the right hand side rather than on top. It’s not as wheelchair friendly as the touchless walkthrough gate and downright hostile for left hand Apple Watch users which Japanese users have tweeted and complained about.

And it has a QR Code reader on the front. Don’t hold your breath because it is only for “testing and evaluation” purposes in a new station with initial low passenger traffic. There are still one-off paper ticket variations without mag stripes that don’t work on the current Suica architecture or on ticket gates and have to be collected by a station agent.

Those low volume specialty tickets would fit well with QR Code as JR East migrates away from paper ticketing all together. Osaka Metro have said they plan to test other technologies such as face recognition. I have no idea if those systems will work any better than Face ID for face mask wearing hay fever and flu suffering transit users. It doesn’t sound fun.

The vague JR East press release wording, and the wheelchair specific design suggests these gates will not be universal at Takanawa Gateway station. They will probably be installed in the manned booth areas to free up station agents to deal with more important business.

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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.

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.

JAPAN CASHLESS: Cafe Veloce offers 5% cashless rebates

Finally! A cafe chain with JAPAN CASHLESS rebates and 5% at that. Sayonara Starbucks and hello Cafe Veloce, until July 2020 anyway.

UPDATE: as always some locations are not onboard yet even though Cafe Veloce parent company Chat Noir says they all are. Be sure to check for the CASHLESS logo on the door.

UPDATE 2: confirmed with Chat Noir that all locations are onboard.

Toyota Wallet: if there must be another Japanese Wallet app, please let it be this

As I have pointed out countless times on this blog, Apple Pay Suica is one of the best Apple Pay services that Apple has hosted on its platform so far. The first transit card on Apple Pay remains the best: it combines the speed of the Suica transit card FeliCa architecture, the convenience of the Mobile Suica cloud, and the flexibility of the Apple Pay recharge backend.

The Apple Pay Suica sandwich: an open flexible recharge backend, sandboxed stored value (i.e. not hot wired to an app account), NFC FeliCa frontend.

This last point is under appreciated. The deal Apple and JR East worked out is the secret sauce: Apple Pay cards in Wallet just work for recharge, from Japan or from abroad, with no extra fees across the board, users earn points for the card of their choice. And users still have the option to recharge with cash if they want to.

A new kind of Wallet app
Toyota Wallet for iOS unveiled on November 19 finally gets right what other QR/Bar Code apps like PayPay have not: a flexible backend matched with a flexible frontend. A version for Android is due in the spring of 2020.

Toyota Wallet is built using the PAYCIERGE platform from TIS. The user has a choice between payment with QR/Bar Code in the Toyota Wallet app with Origami Pay or Bank Pay accounts, or payment with a dual mode EMV/FeliCa iD Mastercard prepaid card in Wallet with the backend recharge hosted from Toyota Wallet.

An interesting side note here is that both PayPay and Line Pay have said that FeliCa cards are a possibility. Up until now this has just been lip service. It would be a welcome development if the Line Pay/Yahoo Japan merger produces a FeliCa payment option similar to what Toyota Wallet has done.

Toyota Wallet is still not open in the way that Apple Pay Suica is. All of the ‘recharge’ methods are in the SMBC orbit, even iD recharge credit cards have to be SMBC issue (such as Docomo dCard) Visa or Mastercard to avoid hefty recharge fees. It’s not perfect and remains chained to the SMBC financial ecosystem, but Toyota Wallet does point a way forward that I hope Toyota Finance Corp. continues to improve, and that other payment system operators follow.

Summary
The Toyota Wallet flexible backend/flexible frontend development is a step forward for digital wallet possibility. This is the first Japanese wallet app where the frontend technology is a simple user choice, not a straitjacket. It shows the innovation possible in Japanese payments market where the focus is on creative thinking. That this kind of innovation comes first on the Apple Pay platform says all you need to know about Apple Pay being open. Compare this approach to the Europe one where the focus is forcing others to solve problems that Europeans should be solving themselves. That approach is a political one, not innovation.