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.

Plastic era thinking in the Digital Mobile Wallet era
The debate perfectly represents the plastic era transit card vs credit card mindset that completely ignores the impact of digital wallets and mobile payments. 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 private transit ‘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.


November 5 was JRE POINT CASHLESS rebate pay day, a grand total of ¥178. Big whup. After a month of using the CASHLESS rebate program, I can say that most of my Suica CASHLESS rebates are the convenience store instant transaction variety that do not use the JRE POINT system. I have also gotten more points out of the JRE POINT yellow logo 2% rebate campaign because I frequent Becks Coffee Shop and NewDays on the daily commute. Most of my cashless rebates are via my plastic Docomo dCard/Mastercard at the local COCOS Nakamura supermarket (the bento selection is real good, as is the fish).

Still, I’m glad to report that the system works as advertised. All the rebate points for October are in. My only wish is for more eligible stores to join the program while the deal lasts.

JRE POINT Issues Apple Pay Suica Notice

With the JAPAN CASHLESS Rebate program in full swing, many Apple Pay Suica users are suddenly paying attention and signing up to get those post-transaction rebate points. The sleepy JRE POINT site is suddenly a hot bed, and users are advised to steer clear of registering Suica cards during the peak evening hours of 22:00~24:00.

JRE POINT issued a notice today reminding users with plastic Suica cards registered with JRE POINT, that they need to re-register the Suica as Mobile Suica if they transfer it to Apple Pay.

JRE POINT allows multiple Suica cards to be registered, but only a single Mobile Suica card (green) can be registered at any one time, and one Mizuho Suica (blue). Once a Apple Pay Suica/Mobile Suica card is registered however, users don’t need to worry about the Suica ID number changing when migrating to a new device or moving Suica from iPhone to Apple Watch. The number usually doesn’t change but even if it does, the Mobile Suica/JRE POINT system takes care of it.

UPDATE: I forgot to mention that MIZUHO Suica does not count towards the Mobile Suica limit, you can have one Mobile Suica card (green) and one MIZUHO Suica card (blue) both in Wallet, both earning JRE POINT.

The JAPAN CASHLESS Rebate Day 6: Rebate Mana

2% and 5% CASHLESS rebates are processed and paid out at the end of each month. So I was a little surprised last night when I opened JRE POINT app, checked the transaction list and found lots of extra points listed as ‘rebate campaign’.

It took me a moment to realize that these were not JAPAN CASHLESS store rebate points but JRE POINT campaign rebate points. JRE POINT is running several point campaigns, the 2% one runs until June 30, while the NewDays Self Checkout one runs until October 30. If you are registered with JRE POINT, use Apple Pay Suica to buy your daily commute drinks at NewDays self checkout this month and rack up the points: the regular 2% + the 3% self checkout. Every other point system is doing the same from PayPay to Rakuten so keep an eye out for all kinds of campaigns.

Tokyo Cashless 2020: Consumption tax relief with the CASHLESS rebate program

1️⃣ Dear JR East, we need a new Suica Charge App
2️⃣ >Consumption tax relief with the CASHLESS rebate program
3️⃣ Are Apple Maps and Siri really Apple Pay level ready for the Tokyo Olympics?
4️⃣ Blame the Japan Cashless Payments mess on VISA and EMVCo, not FeliCa

Tokyo Cashless 2020 is a series covering all things cashless as Japan gears up for the big event. If there is a topic that you’d like covered tweet me @Kanjo

Note: CASHLESS rebate program details are constantly updating, new information is consolidated here instead of separate posts, check for updates at bottom

Apple Pay Japan Cashless Rebate page

A reader asked if I knew of any comprehensive English guide for the various Japanese point systems: Rakuten, T Point, JRE POINT, etc. It’s a good question, and a timely one. Unfortunately the short answer is no, a guide like that does not exist.

It took me a year to put together a good Apple Pay Suica ecosystem guide (at least I think it’s good for covering the basics, if not let me know). It’s impossible to intelligently catalog the various Japanese card and payment app ecosystems into English for the CASHLESS rebate program in a short time.

Instead of a broad sloppy sweep, I updated the JRE POINT guide that covers the entire JR East ecosystem of Apple Pay Suica and how it works with the CASHLESS rebate program. The basic concepts apply to all CASHLESS rebate program qualified e-money cards. Hopefully this post and the JRE POINT guide will give you enough information to find the right setup for your card/app payment/point system of choice.

You may not have to do anything to get ready. As the rest of this post shows, credit card users don’t need to do anything more than use a Japanese issue credit card.

The JAPAN CASHLESS Rebate Program

The Japanese Government CASHLESS rebate program, CASH=LESS get it?

In tandem with the 10% consumption tax starting October 1, the Japanese government is launching a CASHLESS rebate program that offers a 5% or 2% rebate with cashless purchases at participating stores and online shopping sites like Amazon JP, Rakuten JP and Yahoo Japan Shopping. The idea is to ween Japanese society away from its infamous “cash addiction”.

The CASHLESS program is overseen by the Japanese Ministry of Economy, Trade and Industry (METI) and will be valid for certified cashless purchases from October 1, 2019 until June 30, 2020 at qualified participating stores. A METI outline of the CASHLESS program is available in PDF (Japanese only). The CASHLESS web site is informative and constantly updated, hopefully with English at some point.

It’s important to understand that from October 1 the consumption tax is 10%. However there are 2 programs: (1) The rebate program effectively reduces the tax rate until June 30 depending on the kind of purchase (food vs household items, etc.) and how it is paid for (cash vs cashless), (2) an 8% tax rate for take out food and drink with no set deadline:

2% rebate convenience stores calculate the rebate and instantly deduct the amount from the cashless transaction, effective tax rates are shown on the right of the chart

No matter what item you buy, or the tax rate, all items are eligible for CASHLESS rebates when purchased at stores displaying the 5% or 2% CASHLESS banner. How do you get the rebate? This part is easy: make purchases at any store displaying the 5% or 2% CASHLESS banner with:

  • Japanese issue credit/debit cards, either plastic or on Apple Pay (iD/QUICPay)/Google Pay.
  • Japanese e-money cards (Suica, nanaco, WAON, etc.) either plastic or Apple Pay Suica/Google Pay.
  • Japanese QR Code smartphone payment apps (PAYPAY, Origami Pay, Rakuten Pay, etc.).

2% instant CASHLESS rebate at convenience store checkout
When you make a cashless purchase with any of the certified methods (credit card, Suica, QR, etc.) at CASHLESS certified 2% rebate independently owned convenience store franchises for 7-Eleven, Lawson, FamilyMart, MiniStop, the 2% rebate is instantly calculated and deducted from the transaction, and shown on the store receipt. Only franchise locations are certified, large O&O locations are not eligible. Be sure to check for the CASHLESS banner on the store front.

Note: Any Apple Pay Suica card you add to iPhone/Apple Watch is considered “Japanese issue” and qualifies inbound Suica users for the 2% instant rebate at convenience stores. No signup or registration required. Just use Apple Pay Suica, it doesn’t care which country you come from.

2% or 5% post-transaction CASHLESS rebate
When you make a cashless purchase with any of the certified methods (credit card, Suica, QR, etc.) at CASHLESS certified 2% or 5% rebate stores, the rebate is calculated but not shown on the store receipt, then processed and refunded at the end of the month according to the type of card:

  • Credit (post pay): CASHLESS program rebate amount totals are calculated by the card company at billing and automatically deducted from your monthly credit card bill. Credit card CASHLESS rebates are not tied to point systems.
  • Debit (instant pay): CASHLESS program rebate amount totals are calculated by the card company at end of the month and automatically refunded to your bank account, or instantly deducted from the purchase amount at transaction. Debit card CASHLESS rebates are not tied to point systems.
  • Prepaid (stored value): CASHLESS program rebate amount totals calculated at the end of the month and refunded as points. The point system depends on the type of e-money prepaid card: JRE POINT for Suica, Rakuten point for Rakuten EDY, etc. The point rebate model also applies to QR Code systems like PayPay, however prepaid e-money rebates are tied to point systems while QR Codes are tied to app user accounts. Be sure to check the CASHLESS details of your QR Code payment system.

The CASHLESS web site maintains comprehensive lists of qualified credit/debit cards, and prepaid e-money cards/QR Code Apps. The site is constantly updated with direct links to all participating payment system CASHLESS rebate information pages. Search your payment system, and it will link you with the CASHLESS rebate information for your payment system. All pages are in Japanese language, there is no English.

Surprisingly Easy
The 2% instant convenience store rebate is a no-brainer. All anybody needs to do is use one of the certified cashless payments at certified convenience stores displaying the 2% CASHLESS banner, that’s it.

The 2% or 5% post-transaction rebate for all other rebate stores is easy too. All Japanese issue credit card users need to do is use their card at any store displaying the CASHLESS logo, that’s it.

Debit cards are also straight forward but users should check how the rebate is handled for their card account. QR Code systems sign up users with an account and should be automatic as well but be sure to check the rebate method.

Prepaid e-money card users need to register their prepaid e-money card with the appropriate point system to get 2% or 5% post-transaction CASHLESS rebates. For Apple Pay Suica users this is covered in the JRE POINT guide.

The nice thing about CASHLESS + Apple Pay Suica is that users are not chained to Green/Yellow logo JRE POINT locations to get JRE POINT CASHLESS rebates. Any store participating in the CASHLESS rebate program that offers Suica for payment is good to go. Check for stores displaying CASHLESS and Suica banner logos on the store front or at checkout.


JR East also has a bonus JRE POINT campaign for Suica purchases running concurrently with the CASHLESS rebate program. Keep your eye out for campaign logo marks and details in JR station retail areas and NewDays stores.

9/20 UPDATE: The CASHLESS iOS map app has been released. Download it and get ready to find stores around you offering rebates with cashless purchases. There is also a CASHLESS online map version to search and find rebate stores with filters.

10/28 UPDATE: After a weak start with bad data, the CASHLESS Map App has finally gotten its act together. The data is fixed and the v2 update adds filtering: search by store type, rebate type, cashless payment type, etc. The app is finally useful but still only supports Japanese language, handy nevertheless. Download it if you don’t already have it.

10/16 UPDATE: Finally solved the ‘some convenience stores have 2% discounts, some do not’ mystery: independent owner franchise stores are eligible in the CASHLESS rebate program, directly owned and operated locations are not. This explains situations such as why Kintetsu FamilyMart in-station locations don’t have rebates while FamilyMart stores near stations do.

10/9 UPDATE: the CASHLESS iOS map app and web site have been updated. The database seems fixed now. Some locations are still missing, like MiniStop, but listings now show the correct store payment information. The next Cashless store wave of 500,000 is due to join the program on October 10. At that point MiniStop should finally be listed.

10/7 UPDATE: Be careful, not all 7-Eleven, Lawson, FamilyMart, MiniStop convenience store locations are certified and offer instant 2% rebates. Always check for the CASHLESS banner on the store front or at checkout. I have yet to find an in-station convenience store that offers CASHLESS rebates such as Kintetsu Family Mart.

10/4 UPDATE: Apple Pay Japan launched a new web page promoting CASHLESS Rebates

10/3 UPDATE: The CASHLESS iOS map app and CASHLESS online map are not reliable. Japanese media news reports say that settlement companies uploaded the wrong data sets to the maps database. MiniStop convenience stores for example give the instant 2% rebate with cashless purchases, but are not listed yet. The most reliable way is to check for the CASHLESS banner on the store door or at checkout. Until CASHLESS maps are fixed forget the smartphone app and stick with the ground truth.

10/1 UPDATE: The CASHLESS rebate program has kicked off and the field experiences show: convenience stores offer instant 2% rebates deducted from the transaction.

9/30 UPDATE: The number of CASHLESS rebate stores for the October 1 start up is capped at 500,000. There are many more CASHLESS rebate stores to come, however in order not to overwhelm payment systems, stores will be added in waves: launch wave @ 500,000, wave 2@ 500,000, and so on every 10 days until all 2 million participating stores are up and running with the CASHLESS rebate program.