JR East issued a Mobile Suica system maintenance notice, the downtime will run longer than usual: all services will be offline from midnight to 6:30 am March 21 JST. This includes Apple Pay Suica recharge so be sure to recharge before then, or use cash recharge at the nearest convenience store.
Transit cards on mobile devices first appeared in 2006 with the launch of Mobile Suica, the world’s very first comprehensive transit card on mobile service. With the arrival of digital wallet platforms from Apple, Google and Samsung in 2015, mobile transit cards have gradually become widely available outside of Japan. The first mobile transit card on Apple Pay was Suica in 2016.
The chart below lists native transit cards hosted on embedded secure element (eSE) mobile digital wallets by service launch year. Entries are limited to native transit cards defined as reloadable virtual transit cards already in service or formally announced by wallet platform vendors (Apple/Google/Samsung/etc.) and/or transit agencies. Open Loop service is not listed. The chart is best viewed in landscape mode.
Mobile transit card protocol overview The current lineup of transit card payment mobile protocols are
As explained in detail below, FeliCa and Calypso are the fastest protocols, MIFARE is in the middle and PBOC, the Chinese variant of EMV, is the slowest of the protocols, as EMV was originally designed for leisurely supermarket checkout not rush hour transit gates. Transit has special needs for fast fare processing at the gate to keep people moving and operations safe. In theory all protocols can process transactions at more or less the same speed, but the reality of NFC+protocol OS integration+antenna and gate design is that there are big differences. The truth is in the tap. Here is a rundown of the technologies and real life tap times.
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 video passengers maintain their walking pace but never overshoot and trigger a gate closure nor slow down not even a bit.
It may be a minor difference but due to the high volume of passengers per gate (comparison example of large crowds at gates in Malaysia and Japan) and to reduce gate maintenance requirements, taps 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.
Open Loop NFC ticketing (in its current form, EMVCo Contactless specifications are adopted in contactless bank cards issued worldwide including China UnionPay QuickPass which is PBOC derived from the EMVCo Contactless spec and uses the 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 is never supposed 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.
YouTube comment explaining the speed differences between NFC types (blocked outside of Canada), edited for clarity
Japan and China have de facto national transit card standards. Japan has Suica, ICOCA, PASMO, etc., which share the same basic architecture that gradually evolved from 2001 into the mutual compatible Transit IC interoperability standard in 2013. PBOC 2.0 China T-Union is a Chinese Ministry of Transport initiative for interoperable transit cards on plastic and mobile, managed by Beijing China Communications Gold Card Technology that started in 2015, cards are prepaid Union One issue. With the rollout, China T-Union replaced existing MIFARE and FeliCa based mainland China transit cards.
The interesting thing about the latter is that many Greater Bay Area transit cards were FeliCa based cards and users really noticed the difference when China weeded out and replace them with the slower PBOC 2.0 powered China T-Union cards:
Compared to other contactless smartcards in use, the data transmission of <PBOC 2.0 China T-Union> Yang Cheng Tong is criticized by commuters that it takes 1~2 seconds between the card and reader to complete the transaction, though the operator claims that the data communication only takes 0.5 seconds in its official site.
The slower China T-Union speed is one factor driving the popularity of QR codes for transit in China: there isn’t any speed difference between the two so most people choose AliPay and WeChat Pay for the convenience of reward points, campaigns and more services.
Mobile transit cards vs Open Loop Mobile FeliCa developed by Sony and NTT Docomo has been around the longest and works across multiple mobile hardware platforms from Symbian handsets, to Android, to iOS/watchOS and now Garmin Pay Suica. MIFARE has a shorter history on mobile. PBOC 2.0/3.0 is basically new. The key period is 2015~2016 which saw transit card debuts on Apple Pay, Samsung Pay and Huawei Pay.
The biggest advantages of transit cards in digital wallets is the freedom of anywhere anytime recharge with credit/debit cards; transit users are no longer chained to station kiosks to recharge plastic smartcards with cash or renew a pass. The more payment options supported on the recharge backend, the more convenient the card is.
These are great customer features, so why is it taking so long to get transit cards on mobile in America and Europe when there are some 257 China T-Union transit card compatible transit authorities already on mobile? The answer: Open Loop.
Blame the slow mobile transit card rollout on open loop Many transit card fare systems outside of Asia are managed by Cubic Transportation Systems, including Oyster, Opal, Clipper, OMNY, Ventra and SmarTrip to name a few. Cubic and operators like Transport for London, Transport for NSW and New York MTA have focused primarily on Open Loop EMV card support as their mobile solution instead of hosting native virtual transit cards.
Publicly run transit system resources are limited so using bank cards for open loop transit is seen as a way to reduce costs for both fare collection and plastic card issue. The downside is that open loop support adds a layer of complexity and cost that stymies native digital transit card support. As with all transit agencies that are run by, or receive movement funds, resources are limited, choices have to be made as to which mobile transit solutions receive funding. The end result is that precious system development funds are spent on EMV open loop development with native transit card mobile support a secondary priority, if at all.
However open loop cannot cover all fare options as bank cards were not designed for transit. This is why Oyster, Opal and Ventra have had to keep good old stored value plastic MIFARE cards around for fares that don’t fit in the ‘one size fits all’ open loop box. To address this shortcoming Cubic has created a new mobile transit solution: closed loop EMV bank cards for digital wallets.
Cubic’s very first mobile transit card effort, the long delayed Apple Pay Ventra, is the world’s first EMV closed loop transit card. It’s basically a Mastercard debit card with an account candy wrapped as a Ventra digital card. This same configuration is being tested for digital Opal. As closed loop EMV transit cards are bank card account based schemes, they still come with all the EMV on transit shortcomings, bank managed accounts, slow transaction speed, poor user feedback at the transit gate, etc. Because of the EMV open loop/closed loop priority, native transit cards on mobile will continue to arrive in a slow trickle.
China T-Union: centralized straightjacket for mobile The large deployment of PBOC 2.0/3.0 China T-Union cards on mobile has been cited as proof that it’s ‘better’ at mobile than FeliCa and MIFARE, but the reality has nothing to do with protocols or smartphone hardware. It is all about the Ministry of Transport China T-Union card nationwide standard managed by a single entity: Beijing China Communications Gold Card Technology (BCCGCT) using prepaid Union One issue for plastic and digital issue:
All China T-Union cards have a single recharge backend provided by UnionPay via BCCGCT. It’s the reason why China T-Union only support UnionPay recharge and sport a similar logo with local transit agency branding. It’s all one package.
China T-Union digital cards on mobile have to be created on the device, plastic card transfers are not supported. Local transit agency transit card apps are intentionally crippled and do not support any NFC transfer features, Apple Support pages do not mention plastic card transfer.
Eliminating plastic card transfers reduces management overhead and the UnionPay recharge backend shared by all transit cards issued by the same company makes it simple as BCCGCT runs everything. The various local transit operators simply plug into it. They don’t have to host anything or build a cloud backend from scratch, and there’s nothing to negotiate because UnionPay runs the payment network. China T-Union illustrates the power a national transit card run by a single government run enterprise monopoly that’s a streamlined straitjacket.
Every country and region has their own priorities and services for local transit, as it should be. My position is a simple one: one size does not and should not fit everyone. A transit platform business model can be adapted to local regions and business conditions for long term sustainable transit in the mobile payments age.
Apple’s decision to offer Apple Pay EMV style Express Transit as a iOS 13 feature when adding cards to Wallet may not have been a good idea after all, especially on the work-in-progress mixed environment that is MTA OMNY. Manual swipe MetroCards will be around for a few years, and with Cubic Transportation running the show it is anybody’s guess when OMNY, the system and the MIFARE MetroCard replacement, will completely in place and running smoothly.
For every tweet saying Express Transit is great, there are plenty of complaints of unwanted OMNY charges because iPhone users didn’t know Express Transit was turned on. The thing is iPhone and Apple Watch have to be damn close for a read. Unless the device is in a pants or coat pocket or wrist that brushes on the OMNY reader, accidental reads can’t happen. Nevertheless Apple would have happier New York City customers keeping EMV Express Transit off by default, and leave default on for the native OMNY transit card, whenever that arrives.
In Japan, iPhone purchases were traditionally subsidized, bundled with carrier contracts. Today, local regulations have significantly restricted those subsidies as well as related competition. We estimate less than half of iPhones sold in Japan in Q1 this year were sold via subsidy.
One year later Apple announced record earnings for Q1 2020 but Japan iPhone sales with down 10% y/y. Luca Maestri only explained the situation at the end of the earnings call, answering the very last analyst question:
So Japan was down 10 percent during the December quarter. It was primarily due to iPhone performance, which was challenged because there were some regulatory changes that took effect on the 1st of October, where essentially the regulators decoupled the mobile phone pricing from the two year contracts and they’re capping the maximum amount of carrier discounts that can can be made. At the same time, I would say that within a more difficult macro environment, iPhone did incredibly well during the quarter. Six of the top seven selling smartphone models in Japan during the December quarter were iPhones. So it was a very strong performance by iPhone in a difficult environment. Also in Japan, we had very strong double digit growth from services, stronger than company average, and very strong double digit growth in wearables, also stronger than company average. So we feel very good. You know, Japan is is a country where historically we’ve had great success. The customers are very loyal and very engaged. And we have a very strong position there and we feel we have a very good momentum.
I don’t think Japanese iPhone customers will stay loyal and engaged if Apple sticks with the same old sales strategies now that the era of carrier bundling is over. A new approach is needed. Maestri alluded to one clear advantage remaining for Apple in the Japanese market: Apple Pay Suica on Apple Watch, an advantage no other device manufacturer has matched yet. That advantage along with the golden opportunity of the Tokyo Olympics this year are market opportunities which Apple is not taking advantage of.
Every year my office sponsors a company trip. This ‘company spirit’ building practice used to be standard in Japan but the custom has eroded considerably since the end of the bubble era. It’s the first ‘unnecessary expense’ item inbound hedge funds always cut when they get a say in Japanese company management: it’s much easier to let staff go when said staff hasn’t spent any time getting to know each other outside of the company setting.
The Group Ticketing Dilemma Most of the company trips are by Shinkansen but the tickets are group tickets arranged through a travel agency who negotiate with JR East/Central/West depending on the final destination. Group tickets are paper tickets with no mag strip on the back. A group ticket or similar paper only items like special discount passes for the disabled have to handled by a station gate agent booth. The standard transit gate layout for JR East stations is a mix of Suica only ‘IC’ gates, mag strip paper ticket + Suica gates and a single gate agent booth.
Gate agent booths are choke points. Because they can only handle one special task at a time, one person with a problem holds everybody up. Our company group nearly missed a Nagoya station Shinkansen transfer connection on the return leg when a Chinese woman tied up the one and only station agent for 10 minutes with a problem that could have been taken care of at a ticket sales window, not a gate agent.
The next generation Suica architecture (aka Super Suica) in 2021 will solve many problems but it won’t solve everything. Group ticketing, special passes for disabled users, and other one-off tickets don’t fit in the Suica box, or even the regular mag strip paper ticket box. This is one problem I suspect the new Takanawa Gateway station Suica + QR Code transit gates are designed to fix.
Disposable paper tickets with a QR Code solve group ticketing very nicely: the travel agent can print them out instead of going to the JR station, they can be reprinted in case someone loses one. An app version is certainly possible but only an extra option for people with smartphones (think school children on a day trip). QR Codes might work well as a replacement for inbound paper Japan Rail Passes.
It’s not about speed, Suica or smartphones. It’s all about freeing up those increasingly rare and harried transit gate agents from the mundane task of validating one off paper tickets so they can take care of transit users who really need their help. I can’t think of a better use case for putting QR Code readers on JR East Suica transit gates.
Regular Mag Strip Ticket Costs The only question remaining in my mind is what strategy JR East will chose to retire regular mag strip tickets and reduce costs. Those intricate, and fast, OMRON mag strip ticket machines are an engineering marvel. However, even though QR Codes and central processing are slower, the front end machine is much less expensive and easier to maintain. The magnetic strip paper itself is also expensive and less environmentally friendly than other paper. We will find out what JR East is really planning when the new Shinkansen eTicket system launches next spring, just about the time that Takanawa Gateway station goes into operation.
Right now JR East has 2 basic ticketing systems:
Suica Fast, less expensive fare tier for regular transit, Mobile Suica support for Apple Pay and Google Pay credit/debit card recharge, Shinkansen eTickets and discounts, Green Car upgrades, commuter passes, etc.
Paper Tickets Slow, more expensive fare tier for regular transit, cash purchase only for local travel, credit card purchase for express train and Shinkansen tickets
I think the next step of migrating mag strip paper ticketing to QR Code is pretty clear. The real question is will JR East continue with the same transit tiers they have now: cheaper Suica IC fares vs. more expensive paper ticket fares. They will probably offer an app with QR Code support as but I see it as a simple extension of QR Code paper tickets, i.e. it won’t get the less expensive Suica fares. And don’t forget the ultimate Suica advantage: touchless walkthrough gates.