FeliCa Dude posted a series of deeply interesting tweets relating to Mobile FeliCa 4.1 changes. He had earlier complained of Mobile PASMO lack of Pixel 5 support and it now appears that multiple Secure Element domain support in Mobile FeliCa 4.1 was a reason for that delay. This is an fascinating development but what is it there for?
I assume his tweeted profile is for a Pixel device, hence the FeliCa Networks secure element (SE) + Google SE references. In this context it appears that Google ‘owns’ the Mobile FeliCa SE and which applets load, in other works FeliCa Networks needs permission from Google to load applets on a Google device SE. Devices come pre-loaded as always so customers simply use it out of the box, but the implication is that FeliCa Networks and the SE domain ‘owner’ can load/delete Java Card applets and even update Mobile FeliCa over the air. Whether they actually use this functionality or not is another story.
FeliCa Dude thinks multiple secure element domains are also there to support Ministry of Internal Affairs and Communications (MIC) plans for a digital version of My Number Card (Individual Number Card) for smartphones using the Mobile FeliCa eSE, even though the current plastic card uses NFC-B. It’s strange but exciting to ponder the possibilities of a Mobile FeliCa 4.1 secure element that supports non-FeliCa protocols.
One of the big changes of Mobile FeliCa 4.0 was that it introduced loading a FeliCa applet on any approved secure element. This change frees Android device manufacturers from having to purchase FeliCa chips from the FeliCa Networks supply chain. It basically gives Android devices the same custom secure element arrangement Apple has had since the iPhone 7 Apple Japan Pay launch in 2016.
I asked FeliCa Dude if the Mobile FeliCa 4.1 development is also related to next generation FeliCa feature support used for Suica 2 in1 cards coming this month, in particular the new Extended Overlap Service. He says this is unlikely but I hope we discover other pleasant surprises as intrepid explorers dig into Mobile FeliCa 4.1 details.
There is a consistent theme among some Japanese tech journalists: the native Japan Transit IC smartcard system is obsolete and destined for that fabled junk heap, the Galapagos island of over-engineered irrelevant Japanese technology. The arguments always boil down to cited higher costs of maintaining the ‘over-spec’ proprietary FeliCa based inflexible transit IC architecture in face of ‘flexible, lower cost’ proprietary EMV contactless bank payment tap cards and smartphone digital wallets used for open loop transit. Is Suica really ‘over-spec’ or is it clever stealth marketing sponsorship from EMVCo members and the bank industry disguised as journalism? Logically the same argument applies to proprietary MIFARE smartcard transit systems as well but is never mentioned, presumably because it was invented in Europe instead of Japan.
Despite all the digital ink on the subject I have yet to see a single article where said costs are actually shown and compared. Smartcard deposit fees are a standard way to offset plastic issue costs and Japanese transit companies like to earn interest off the float of card deposits and unused stored value. But this is never discussed nor the fact that digital wallet issue is free of hardware costs.
Bank payment cards and smartcards have very different business models. EMVCo members and their card issuers can hide associated hardware and licensing costs in bank transaction fees that NXP, FeliCa Networks and other smartcard technology solution providers cannot. Without hard numbers we can only take journalist claims at face value, that transit smartcards are not smart at all, but expensive obstacles to lower cost open loop centralization nirvana.
I don’t buy the ‘one solution fits all’ argument and neither should you. One constant issue in our internet era is that too much centralization is not only a technology monoculture security risk, cloud services fail, and cloud centralization is abused to limit human rights. As speech is censored on SNS platforms and online profiling is used to limit freedom of travel with politically biased no fly lists, it is inevitable that face recognition transit gates will be used to track people and implement ‘no ride’ or ‘limited ride’ policies. These are issues that people must be aware of in the relentless rush towards online centralization of transit payments and services.
Nevertheless there are articles with valid criticisms well worth reading. I ran across one recently by Masanoya Sano on Nikkei that asks a good question: ‘Does taking 14 years to deliver Mobile PASMO mean the transit IC card foundation is crumbling?‘ While I don’t agree with everything Sano san says he makes a good case that Japan Transit IC association members are failing in the face of a hydra-headed crisis: declining population with less ridership, fierce competition from other payment services such as PayPay and EMV based VISA Touch, and ridership killing COVID lockdowns. He argues that transit companies must fix some basic problems if the Japan IC Transit standard is to survive:
Increase coverage: get all transit on the Transit IC card service map
Go mobile: for all transit cards
Improve the transit IC card architecture: improve compatibility and loosen up current restrictions for 200 km and cross region transit, and the ¥20,000 stored fare limit
I believe most, if not all of these can be addressed with next generation FeliCa + 2 in 1 Suica (aka Super Suica) launching this year and deeper payment infrastructure sharing between transit companies. Nothing is guaranteed of course but here’s a look at each category and possible solutions.
Coverage The transit IC coverage gap is the biggest failure of Japanese transit companies and there are big gaps. Suica only covers major population areas in Tokyo, Niigata and Sendai, roughly half of the stations on JR East are not wired for Suica. A similar situation applies to the other JR Group companies. JR East has promised to get their entire rail network on Suica with a simplified lower cost cloud based Suica in the 2020 fiscal year ending March 2021 but has yet to announce any details (they are specifically referenced in the new Suica Terms and Conditions effective March 27).
On the plus side JR West is expanding ICOCA coverage with a light rail approach of incorporating NFC readers installed in the train car for tap in/tap out for unmanned stations. No wires. SMBC and VISA use the same strategy for their VISA Touch transit boutique marketing program. It’s a practical low cost strategy for lightly traveled rural lines that reduces the hard wire requirement. Only stations that need it get wired and even those installations can use the lower cost JR East cloud based system.
All major transit companies need to install these lower cost solutions to fill the transit IC gaps and integrate remaining isolated regions. VISA Touch transit boutiques are marketed as a solution for inbound and casual users, but these EMV only installation leave those transit areas off the transit IC grid for regular users and don’t work for wider area travel.
Mobile Mobile Suica and Mobile PASMO combined represent 80% of the current transit IC card market. Mobile ICOCA (JR West) is due to launch in 2023. There is no word yet about mobile for TOICA (JR Central), manaca (Nagoya City Transit rail/bus), PiTaPa (Kansai region private rail/bus), Kitaca (JR Hokkaido), Sugoca (JR Kyushu), nimoca (Nishitestsu), Hayaken (Fukuoka City Transit). This is a big challenge but the borrowed Suica infrastructure used for Mobile PASMO is a strategy that can be applied to the other major cards.
Improving Transit IC JR East is releasing the 2 in 1 Suica card architecture that incorporates new FeliCa OS features the most important being the “2 cards in 1” Extended Overlap Service. New regional transit card using this new FeliCa OS and Suica format are launching this month in Aomori, Iwate and Utsunomiya. The next challenge for JR East is expanding 2 in 1 Suica to existing and important region transit cards inside the JR East transit region such Niigata Kotsu Ryuto and Sendai City Transportation Bureauicsca.
The ultimate long term success of the Japanese Transit IC systems depends on infrastructure sharing and integration. For this to happen other JR Group companies and private rail outside of the JR East regions have to incorporate the 2 in 1 Suica format and improvements for their own cards and regions. Only when all Transit IC Mutual Use Association members are using the new format can they link and combine services in new ways, and add new features such as raising the stored fare card value above the current ¥20,000 limit.
Will it be enough? I have no idea. Immediately I see problems for the Kansai region PiTaPa card association companies (Hankyu, Hanshin, Keihan, Kintetsu, Nankai) as they have to make fundamental changes to use the new card format. I don’t see a Mobile PiTaPA in its current incarnation and this is why SMBC (who run PiTaPa card accounts) and VISA are targeting the Kansai area for VISA Touch transit: non-JR Kansai transit companies have their backs against the wall and no way easy forward to mobile except for going all in with JR West Mobile ICOCA, or taking what SMBC offers them.
Open Loop competition Kansai area private rail companies never managed to create the equivalent of PASMO. PiTaPa is a postpay card that has credit card issue checks and cannot be purchased at station kiosks like all other transit cards for casual use. Issue is limited, so Kansai transit companies issue JR West ICOCA commuter passes for people who can’t use credit cards. This is the context surrounding the SMBC VISA Touch transit for Nankai announcement that got lots of press attention as the first major test deployment of open loop on a Japan Transit IC card system.
Junya Suzuki’s latest Pay Attention installment has a deep dive on the VISA Touch Japanese open loop transit system solution powered by QUADRAC Q-CORE server technology. It is the solution also used for the Okinawa Yui Rail monorail fare system that integrates Suica/Transit IC and QR support. He argues that open loop EMV is good enough because, (1) we don’t need the over-spec FeliCa 200 millisecond (ms) transaction speed (it’s actually faster, between 100~150 ms), (2) it has a leg up on future MaaS and cloud integration. Holding onto Suica local transaction performance as ‘faster/better’ is a myth holding back progress.
I have tremendous respect for Suzuki san and his work but his arguments fall down for me here. He completely ignores the white elephant in the room: closed loop is here to stay because the open loop model cannot support all fare options. Even on the open loop systems that he champions, Oyster and Opal for example, closed loop cards are still essential and are transitioning to a closed loop EMV model for digital wallet issue. The only change is the closed loop card transition from MIFARE to EMV because bank partners are running the transit system account system backend instead of the transit company. In other words it has nothing to do with technology at all, it is bank system convenience. Bank convenience is what it all boils down to.
Making the right technology choices are essential in our era of limited resources, ride the right horse and you succeed. I want to believe the cloud holds the promise to extend transit IC to low transit volume rural areas that don’t have it now, but every time I use a slow cloud based stera payment terminal I’m reminded how impractical that approach is for stations with high transit volume.
Does it make cost sense to replace the current transit IC system and re-create it with EMV open loop when Opal, Oyster and OMNY systems will always need closed loop cards? The practical thing is leveraging a good system already in use. Upgrade the Japan Transit IC system we have now, spend precious resources that fix current limitations and extend it with new technologies like UWB Touchless.
The strength and weakness of the Japan Transit IC standard is that it’s not top down but based on mutual cooperation. It’s not one entity but association members have to move forward as if they are one. JR East has been the technology leader and is working to improve and share it at lower cost. 2021 is not the make or break year for Japan Transit IC, but it will be an important and challenging one that will set its future direction.
EX-Press Reserve (also called EX-Press Ride) is the sister service of smartEX that uses the same EX app and system with deeper discounts aimed at Japanese business travelers. It also comes with a special EX Transit IC card just for Shinkansen gates with a unique ‘double card’ tap (EX IC card + regular Transit IC card). Mobile Suica and Apple Pay Suica users with a View card also have the unique and slightly different Express View service by registering for EX-Press Reserve in Suica App for JR Central Shinkansen eTicket travel EX Transit IC.
Fortunately JR Central is streamlining the complex service to bring it in line with the simple smartEX approach: instead of the special IC card for Shinkansen gates, members register a plain old Transit IC card (Suica, PASMO, ICOCA, Toica, etc.) and use that. Shinkansen IC cards can still be used of course but most people will probably just use Transit IC cards, including Mobile Suica and Mobile PASMO.
For Apple Pay Suica users this means Suica App Ex-Press Reserve service ends March 6, which also means a Suica App update that removes the menu item should be landing soon. From that date Apple Pay PASMO users can register their card number for EX-Press Reserve use. Keep in mind that EX-Press Reserve membership costs ¥1,100 a year and is limited to JR Central/JR West issue Express Card, JR East View Card, and certain Japanese issue credit cards.
Other EX-Press Reserve system improvements on March 6 include group ticket purchases for Transit IC card use instead of paper, and the ability to change reservations via the EX App or web site in case of Shinkansen delays.
UPDATE Sister service smartEX (inbound version only) also has some improvements the biggest one being Ticketless boarding service using QR code, in addition smartEX (both Japanese and inbound versions) gains the same group ticket purchase and reservation change service, similar to EX-Press Reserve.
Xiaomi announced a new smartphone for Japan, the Redmi Note 9T for sale exclusively through SoftBank. The model is the first Xiaomi device in Japan with Mobile FeliCa support and like Huawei Mobile FeliCa support is limited to carrier models only. There was some interesting Twitter discussion between Junya Suzuki and Junya Ishino regarding the latter’s article which had some Redmi Note 9T FeliCa details.
For the Redmi Note 9T Japan model Xiaomi bought a FeliCa chip and modified the 9T antenna and body design to accommodate it. A customized model just for Japan. Xiaomi did not go the custom embedded Secure Element route like Apple, Samsung and Huawei but saw a business opportunity with an exclusive SoftBank deal to recoup development costs and make money. The low price makes Redmi Note 9T one of the cheapest Osaifu Keitai Android devices sold in Japan. It also illustrates the piecemeal Android hardware business approach and why Global NFC is still pipe dream for Android users.
With more and more payment players and their dogs doing the wallet app + instant issue prepaid card thing, it was only a matter of time before banks got into the act. SMBC announced and released the V POINT app today. Think of it as a re-branded Toyota Wallet app without the QR Code bit and multi payment network strategy: you download the app, create an account and a prepaid Apple Pay (iD) or Google Pay (VISA) card that can be recharged from a bank account or a credit card or with points. And because VISA Japan has yet to sign a deal with Apple, Apple Pay users get a FeliCa iD prepaid card while Google Pay users get a EMV contactless VISA prepaid card, no dual protocol for anyone.
The big sales point is…yes another reward point system, V POINT, and it comes with a dumb looking mascot too, a SMBC corporate green ‘beaver’ which rhymes with ‘VISA’ in Japanese…sorta. Every ¥200 card purchase earns one V POINT. Points can be used for a card recharge, just like Suica, or for purchases at participating V POINT stores and online shopping. How well this goes down with card issuers under the SMBC umbrella like Docomo d Card and their expanding D Point empire, is anybody’s guess. I suspect this move will rock that relationship (to the breaking point?) and some others as well.
During the V POINT online press event SMBC also announced that new SMBC issue plastic cards will no longer display a card number for VISA and Mastercard.