The MTA OMNY rollout started on May 30, 2019 with Apple Pay EMV Express Transit support, aka Open Loop. This means regular credit and debit Apple Pay cards work for transit on new OMNY readers. It sounds great but there are downsides: Open Loop doesn’t support the full set of MTA transit fare options so many users have to stick with the good old MetroCard swipe until the OMNY smartcard arrives. Lately we don’t hear much about OMNY card. It seems delayed along with the rest of the OMNY rollout. And because the rollout is delayed, open loop isn’t really useful because the entire system doesn’t support it. The old chicken or egg problem.
One outcome of this mixed mode is the long running complaint of unwanted Express Transit fare charges that has been constant with OMNY transit gates since the very beginning. Many users who still use MetroCard may not be aware that Express Transit is on when going through an OMNY gate. If iPhone gets close enough to the reader, bingo. So the stock advice is ‘turn off Express Transit’. The mixed mode MetroCard/OMNY open loop rollout was a nice idea but it’s not panning out in the COVID era, a victim of poor gate design, planning and execution.
The irony here is that iPhone users riding MTA end up turning off Express Transit, the very thing that helps keep face masks on. MTA is asking Apple to help but a ‘using Face ID with face masks’ ad campaign courtesy from Apple isn’t going to fix anything.
Until the OMNY rollout on MTA is completed and Apple comes up with something better than the iOS 13.5 Face ID tweak, New Yorkers will have to deal with it. After all, commuters with Face ID iPhones in Japan, Hong Kong, Singapore and China have been dealing with face masks for years and Apple didn’t lift a finger. Get used to it,
9 months is a pretty quick turnaround for announcing and launching an entirely new mobile transit service across 2 digital wallet platforms: Android (Osaifu Keitai) and Apple Pay. As early as April Apple dropped hints that Apple Pay PASMO was on the way. It sure beats big bad Cubic Transportation Systems who have yet to get Apple Pay Ventra out the door after it was first announced in March 2019 on the far less complicated Chicago transit area.
While many Apple Pay users in Japan are happy to have PASMO, there is always that nagging question: if I already have Apple Pay Suica what’s the point of Apple Pay PASMO, what’s the difference? The only difference is commuter passes…and reward points. As FeliCa Dude so astutely explained in his excellent Reddit post, Mobile PASMO is a boondoggle, the result of JR East and PASMO Association failing to cooperate and mutually host commute plans…and points.
All Japanese transit cards are slightly different versions of Suica. There could easily be one national transit card and many Japanese users absolutely want it, but ICOCA, TOICA, manaca, SUGOCA, Kitaca, nimoca and Hayaken want to hang on to commuter passes…and points. The good news is that (1) Mobile PASMO got off the ground in a very short time, (2) Mobile Suica is providing the IT assets. I suspect Mobile Suica is likely hosting Mobile PASMO as well but whatever deal they cut is hush-hush.
Suica growth, the CASHLESS tax rebate effect, COVID and all that Junya Suzuki beat me to the punch today with an excellent piece that covers the Apple Pay PASMO announcement and several recent Suica trends including the recent addition of Suica to Square. The most important one to me is the July 2020 edition JR East factsheet Suica section: “Number of e-money available shops”. The number of Suica ready stores increased 50% YOY by 324,000 in the March 2019~March 2020 fiscal year with store growth outside of station areas increasing the most.
This is a direct result of the CASHLESS Tax Rebate program which provided merchant subsidies for cashless infrastructure. That program ended June 30 but there is talk in government circles of implementing a similar program to boost the economy and drive cashless use in the COVID era.
Suzuki san points out what I have said in other posts, Mobile Suica growth from the October 2016 Apple Pay Suica start point is remarkable: 9.3 million users as of March 2020. And the growth rate is accelerating. Smaller and less expensive mobile devices like Apple Watch with Apple Pay Suica and Garmin Suica make the mobile transition attractive for a wider number of users.
With restricted travel in the COVID era every single transit company in Japan is facing increasing pressure to reduce costs. Moving away from high cost plastic transit cards with cut and past Mobile Suica IT assets and next generation Suica card architecture will be the easiest way to do that.
The rush to mobile It starts now. My take is that Apple Pay PASMO marks the start point of a transit IC card rush to mobile digital wallets. Mobile PASMO is rebranded Mobile Suica. With next generation aka Super Suica coming in 2021, at the very least I think we’ll see similar arrangements from JR West ICOCA, JR Central TOICA and other major transit IC cards. With the addition of MaaS NFC Tag Suica, we’ll see a faster, wider uptake of Mobile Suica and sister services for payments everywhere.
And for those Open Loop advocates out there Junya Suzuki has some surprising analysis regarding the Japanese transit scene: despite some limited installation such as Okinawa Monorail, he does’t see transit companies going in for Open Loop in any big way. Mag strip paper ticketing will gradually be eliminated as next generation transit gates go into service over the next few years but mobile transit cards and paper QR Codes will be the replacement, not Open Loop.
As I have said before, the whole ‘Open Loop vs Closed Loop aka EMV contactless bank cards vs Native IC transit cards’ debate is pre-mobile plastic era out of date thinking. Mobile wallets and apps have tossed that whole game out the window for good. Why do you think QR Code payments and UWB Touchless are coming to Apple Pay in iOS 14? It’s a whole new crazy game. Better get used to it.
Now that the CASHLESS Rebate program is over with transaction rates reportedly going back to ‘normal’ (an estimated 1% rise over rebate program rates), JP media outlets report that some smaller merchants might go back to cash to keep profit margins intact. Real transaction rates are always hush-hush but QR payment rates recently revealed in connection with the Japan QR (JPQR) unified code scheme give us an idea what goes on behind the curtain:
NTT Data already lowered basic CAFIS transaction rates in response to the stera payment co-venture from SMBC-Visa Japan-GMO. As the JPQR transaction rate chart makes clear, banks and payment players have plenty of transaction rate wiggle room. The Japanese government is pushing cashless. If necessary the push will become shove for lower rates and yet another cashless program but where do things stand right now?
July 2020 is the proverbial “X-Day” crossover point: Japan is cashless now, even though the transformation is uneven, ongoing and very messy. On the customer side cashless is the mindset and survival behavior for many Japanese, even for older folks who under normal circumstances would prefer using cash until they day they die.
Faced with the reality of handing money that carries the risk of infection, people are going cashless instead especially with contactless smartphone payments. Junya Suzuki was right all along: Apple Pay turned out to be “the black ship of payments” catalyst that finally nudged Japan from cash to cashless. That and COVID.
Market analysts will undoubtably demand chart data that clearly explains and quantifies the transformation before declaring a ‘winner’ but they have a long wait. That’s because the cashless transformation is sloppy with huge regional variations, all happening right before us. But all of this is an afterthought and our priorities are different now, getting accurate market survey information of any kind in the current environment is extremely difficult.
The Tokyo Olympics was supposed to be the event heralding the cashless era but the COVID crisis has forced much more change very quickly. Evidence is best found in the countless little rituals of daily life that have evolved and are not going back. Merchants who do go back to cash face the risk of fewer customers: when offered a choice people choose cashless.
This realization hit me yesterday when my partner complained about his Docomo dPAY points taking a hit because the Summit supermarket staffer tapped a wrong payment button on the new POS cashless menu options added on July 1. He wanted to pay with iD. A year ago he never used iD, dPAY or Apple Pay and never wanted to, but life changed.
These days I hear contactless reader sounds everywhere, FeliCa chirps and EMV beeps are common as clear plastic sheeting and foot position floor stickers at checkout. And just when posting this the Ministry of Land, Infrastructure, Transport and Tourism announced that Japanese Expressways will be going cashless only with ETC. If there’s anything that defines this sea change it is this: it’s not a ‘victory’ over cash that the media sometimes depicts, nor does it feel like progress. In the COVID era it merely feels like survival.
The first problem was the iPhone lineup. iPhone 8 didn’t fit because only A12 Bionic devices and later support NFC background tag reading. This was solved with the release of A13 Bionic powered iPhone SE and deletion of iPhone 8 from the lineup.
The second problem was the clunky ‘launch an app’ or ‘launch Safari’ to do anything. This has been a problem for NFC tag solution providers like SmartPlate. User interaction needs to reside on a task focused pop-up sheet while the screen is on. The new iOS 14 App Clips framework that works hand in hand with iOS 14 Core NFC to load just what is needed to take care of the NFC tag task at hand, is the right solution.
The pieces appear to fit very nicely now: the NFC background tag sheet pops-up ‘while the screen is on’, the right code snippets load in for a simple focused task, the user can Sign In with Apple ID if needed, and pay with Apple Pay. Simple, uncluttered action; no apps, no Safari launch. And we have background NFC tag reading on every current iPhone model.
There are a few flies in the ointment:
Face ID in the face mask era is a lousy unlock and Apple Pay user experience, App Clip powered NFC background tag reading is gonna rock on Touch ID iPhone SE even though it was designed for Face ID.
A network connection is required, Apple Pay transactions at the NFC reader work without a network connection but App Clips + Apple Pay transactions need a network connection for the obvious reasons of loading app clip content, and because of this…
A weak borderline WiFi connection can jam the entire process even with WiFi Assist turned on.
The NFC advantage over QR Codes here is that background tag reading automatically pulls up the App Clip sheet when the screen is on while QR Code users have to manually pull up the QR reader app and scan a code to join the fun.
The combination of App Clips, NFC tags and Apple Pay will be extremely disruptive in markets where NFC and QR payment players are very competitive. Places like Japan. PayPay and Line Pay lose their edge. Smart QR payment players can adapt and add NFC tag support in their payment apps. And they can bypass Apple Pay if they want to, though it won’t be as slick. Ultimately they are not wedded to QR codes, PayPay and Line Pay have always said they would add NFC if customers want it.
App Clips finally unlocks the power of background NFC tag reading and is the other big WWDC20 Apple Pay development in addition to CarKey and Apple Pay QR Code AliPay payments. App Clips puts NFC tags on equal footing with QR Codes for the first time with the added edge of the ‘when the screen is on’ background tag read sheet pop-ups. This will be huge.
As COVID restrictions are eased and the world slowly goes back to work, school and hopefully slightly more normal life, avoiding crowds will be key in keeping COVID from becoming resurgent in the months ahead.
For commuters in Japanese metro areas avoiding crowds is no easy matter. Fortunately the Japanese transit gate infrastructure is a great help. FeliCa based IC transit cards (Suica, PASMO, ICOCA, etc.) with fast transaction speeds combined with open gate flap design maximizes people flow: people walk through gates at normal pace. This is very important for Japanese stations that have to make do with large crowds in limited spaces and smaller gate areas.
It’s wrong however, to think that this only applies to Japan. The benefits of fast tap speed combined with intelligent transit gate design are relevant everywhere and very necessary in this day and age: fast gate tap speed is essential in keeping gate crowding at a minimum. It makes things safer not only for train operation, but also addresses crowd control health concerns in the COVID era.
A reader sent a link to a good discussion of NFC protocols and gate tap speeds that was apparently deleted when YouTube comments were turned off. I retyped the comment below from a screenshot with some light editing for clarity. If I find the author I’ll link to the original. The videos have already appeared in other posts but it’s good have them in one place. A previous installment already covered QR transit code gate issues, this post will focus on NFC.
While transit gates and NFC processors are found worldwide, what makes the Japanese gates different from the rest of the world is they don’t use global standard ISO 14443 (never mind Type A which uses Miller bit coding, the least efficient bit coding method) protocol which is common in many transit and bank cards issued worldwide.
The tap time with ISO 14443 Type A (née Philips) and B (née Motorola) varies greatly: from 200 to 500 milliseconds (ms) with 200 ms only achievable with Type B/Calypso. But it never reaches the short as 100 ms which is only achieved with Felica developed by Sony, also designated NFC-F and NFC Tag Type 3 by the NFC Forum and compatible with ISO 18092 which is commonly found in smartphones and NFC wearables since 2013. In this following video passengers maintain their walking pace but never overshoot and trigger a gate closure nor slow down not even a bit:
It may seem like a minor difference but due to the high volume of passengers per gate and to reduce gate maintenance requirements, tap times really matter.
Companies such as JR East have specified tap time of 200 ms but Suica is actually faster and this allows real life speed tolerances: some passengers tap faster than others due to walking pace, the higher speed tolerances are only possible with the 100 ms tap time of FeliCa. A comparison example of large crowds at gates in Malaysia and Japan below:
Open Loop NFC ticketing in its current form is based on EMVCo Contactless specifications adopted in contactless bank cards issued worldwide including China UnionPay QuickPass which is PBOC derived from the EMVCo Contactless spec. All of these use ISO 14443 Type A at 106 kbps only for 500 ms tap time, which is adopted in cities worldwide such as London, New York, Moscow and Rio de Janeiro where normal walking speed is never supported.
But as seen here, transit cards in Japan such as Suica, PASMO and ICOCA are supported for ultra hight speed and precise account verification and fare processing. Transit cards use offline Stored Fare (SF) which includes the amount of funds stored in the card’s IC smart chip data storage, NOT backend on a server like a bank card, and stored commuter passes. Here are walk flow comparisons for Tokyo and London, and MTA OMNY Open Loop performance: