JR West ICOCA Expands Coverage on JR Shikoku

JR West ICOCA extension on JR Shikoku

If you are familiar with the Japan Transit IC card system that started with Suica and grew from there, you might know the other major cards like JR West ICOCA and JR Central Toica. What about the JR Shikoku card? There isn’t one.

The problem dates back to the many bad decisions made by the Nakasone Government when they privatized JNR by breaking off small weak areas like Hokkaido and Shikoku as independent JR companies. It would have been much better if they had used the NTT privatization model of just two companies, East and West, which balance out weak areas with metropolitan hubs.

JR West ICOCA covers a small part of the JR Shikoku rail network already, today they announced an extension covering 7 more stations in March 2020. Even with this extension which is compatible with Apple Pay Suica, Transit IC coverage in Shikoku remains a real headache, one that is hopefully and finally solved by Super Suica in 2021.

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Japan Transit IC Map, a very cool animated timeline is also available
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Suica Tops Contactless Use in Tokyo Area

Another market survey, another few data points. MoneyZine writers Hideyuki Kato and Isamu Saito report some interesting results of 2 different cashless use surveys. As I reported a year ago, Apple Pay has brought a lot of changes to the Japanese payments market but it’s hard to make sense of it due to highly regional preferences: Suica is king in the Kanto area, ICOCA in the Kansai, and so on.

The 1st data point is a survey from Yumenomachi that ranks the different cashless payment methods:

  • Credit cards: 88.4%
  • Transit cards: 49.7%
  • Apple Pay/Google Pay/Osaifu Keitai: 35.4%
  • Prepaid Reward Cards (nanaco, WAON, Edy): 31.7%
  • QR Codes (Line Pay, PayPay, etc): 25.6%

The 2nd data point is a survey from One Compath. This survey reports 56% of the respondents as using cashless more than a year ago, with slightly different ranking:

  • Credit cards: 71.4%
  • Transit cards: 31.7%
  • Prepaid Reward Cards (nanaco, WAON, Edy): 53.0%

The 3rd data point from the same One Compath survey is very interesting but not surprising. It ranks prepaid card use separately for transit and reward cards by prefecture. Transit card use for payments in the Kanto Area (Tokyo, Kanagawa, Chiba, Saitama) is 85%, while prepaid reward cards are the overall winner on a national basis. This is because of the reach of AEON supermarkets and convenience stores in rural areas where people don’t use transit cards or the local transit cards do not support purchases. The next generation Super Suica format is aimed specifically at incorporating these small rural area transit cards so they can be used anywhere as Suica.

One take away is that in the Kanto area Suica is easily the most used contactless card at checkout (Suica issuance is twice that of PASMO). Credit cards lead in cashless, but are still mostly swipe or Chip and PIN at checkout. When prepaid cards are totaled together, credit card and prepaid card use is almost equal. The surveys do not look at average purchase amounts for the different cashless methods. I suspect that Suica and other prepaid card use leads for smaller purchases while credit cards are used for larger purchase items.

We also know from a previous survey by IT journalist Sachiko Watanabe that most iPhone users do not use Apple Pay:

  • Only 27% of iPhone users who can use Apple Pay use it
  • 50% don’t use Apple Pay but are interested in using it
  • 22% don’t use Apple Pay and don’t care about using it

These numbers jive with the 35.4% digital wallet use figure in data point 1. The short summary here is that there is still plenty of opportunity for Apple Pay to grow in the Japanese market, and the Super Suica format in 2021 has the potential to break down the regionality and shake up the market.

Hankyu Goes ICOCA

Hankyu Corporation announced in January they would sell ICOCA cards for commuter pass use starting March 1. The switchover is interesting on many levels. ICOCA is the JR West transit IC card and PiTaPa is the transit IC card for Kansai area private lines (Hankyu, Keihan, Hanshin, Kintetsu, etc.). They are both FeliCa cards, offer commuter passes and are compatible for transit use under the Japan Transit IC Mutual Use Association project specification.

There is one big difference: ICOCA is prepaid while PiTaPa is a postpaid credit card/transit card hybrid that can never really be mainstream because it has credit checks. ICOCA can be bought by anyone at a ticket machine. The Hankyu/Hanshin switchover to prepaid ICOCA for the masses follows the JR West arrangement that Kintetsu and Keihan already have in place. There is just one last little detail that JR West needs to work out however: get ICOCA on mobile digital wallet platforms like Apple Pay and Google Pay. Super Suica should take care of that in 2021.

Apple Pay Japan Adds J-West Cards, ICOCA Next?

J-West Joins Apple Pay

JR West joined Apple Pay on March 12 with their J-West VISA, J-West Mastercard and J-West JCB credit cards. The cards are on the QUICPay payment network (the spiffy updated Apple Pay on QUICPay page is worth a glance).

ICOCA
Will the JR West ICOCA platypus join the JR East Suica penguin on Apple Pay?

Now that JR West is playing nice with Apple Pay the big question is Apple Pay ICOCA next? Definitely maybe, especially if the Apple Pay China Transit signs spotted in iOS 11.3 beta 4 point to easier transit card support.

I have posted about ICOCA getting ready for Apple Pay, here and here, but so far there is no sign that JR West has the necessary cloud service in place yet for that to happen although SMART ICOCA is the beginnings of one. Then again JR West has much deeper pockets than say PASMO. They can certainly afford to cut a data deal with JR East Mobile Suica or build their own.

Update
The ‘Super Suica’ card starting April 2021 will incorporate all Japanese transit cards in one card for transit, e-money and Apple Pay.