Golden Week Golden JRE POINT

Golden Week 2019 is going to be an extraordinarily long one, 10 days in all. It would not be Golden Week without a few marketing gimmicks and JR East has not disappointed: 15X bonus JRE POINT running May 2~6 with any JRE POINT registered Suica purchases at yellow sticker Suica JRE POINT stores (NewDays, Becks Coffee Shop, Kiosk, etc.) .

To be sure setting up Apple Pay Suica with JRE POINT is a pain, but once done it’s nice to rack up the points. Until May 6, goodbye Starbucks and hello Becks.

When you purchase things with Apple Pay Suica at Suica JRE POINT stores you earn JRE POINT automatically
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Maintenance and Localization

Online guides are like underwear, if not changed regularly, they get stinky and nasty. There were a number of changes last month from JR East: multilingual help support and SuicaEng. This has greatly simplified Apple Pay Suica setup for virtual cards but has required updates to my Apple Pay Suica Guide and Suica App guide. Specifically I am updating instructions and screenshots that follow JR East’s recommendation of using SuicaEng to add Suica to Apple Pay, leaving Suica App for advanced users who need the extra functions and have the necessary Japanese language skill. It’s a work in progress that I hope to finish this week. It will have to do until JR East completely internationalizes Suica App.

Lots of people complain that JR East is incompetent because after 2 years Suica App is still only in Japanese. After all ‘it’s only an app localization job’. Right?

Wrong, very wrong.

This is exactly the trap that Apple fell into with Apple Maps. The original Apple Maps team and management made the huge mistake of approaching the task as ‘creating a map app’. Only after the disastrous launch of Apple Maps in 2012 did it become clear that the job was not about creating a map app at all. The real job was creating and deftly managing an entire digital map ecosystem. It’s a job that Apple is still learning

Suica App is really just an interface shell for all the gargantuan database systems piped into it from Mobile Suica Cloud. JR East will get the ecosystem internationalization job done eventually, but it must be a huge and expensive task with little hope of directly recuperating the costs. If JR East is taking their time to do system internationalization the right way, I have no problem waiting some more. It’s an investment in the future that hopefully leads to new business opportunities for the Suica platform and an easier to use system for everybody.

Apple Pay Drove FeliCa Contactless Growth in 2018

The CreditCard no Yomimono site (CCY) has collected and listed all the FeliCa contactless card issued to date numbers released by Japanese companies in 2018 into one convenient table. WAON is missing because AEON didn’t release any numbers this year, CCY estimates WAON card numbers at 70 million . The numbers are fairly recent and roughly inline with the Japanese fiscal year through early 2018. They are very interesting but as CCY points out the number of issued cards does not always translate into actual use: previous surveys indicate that Rakuten Edy is used much less frequently than Suica at the cash register.

Prepaid Transit IC cards (Suica, PASMO, etc.) are by far the largest at 143,700,000 which means that every person in Japan has at least one. CCY also notes the explosive 51% growth rate of QUICPay which they attribute to Apple Pay. This is one half of the story. JCB has certainly done an excellent job of working with Apple Pay but I suspect another reason is that Japanese Apple Pay Suica users switched from using Japanese issue VISA cards that don’t support Apple Pay Suica recharge in favor of QUICPay cards like JCB VIEW that do.

Any way you look at the numbers one thing is clear: prepaid cards are far more popular than credit cards for contactless payments in Japan. The huge installed base of Transit IC cards also bodes well for the Super Suica card that will integrate them into a single format for plastic issue and mobile hosting in early 2021.

The Contactless Payment Turf Wars: PiTaPa Pitfalls

  1. Contactless Payment Turf Wars: Transit Platforms
  2. >Contactless Payment Turf Wars: PiTaPa Pitfalls
  3. Contactless Payment Turf Wars: why Oyster is missing from mobile
  4. Contactless Payment Turf Wars: tapping the potential of TAP

Japan Transit IC Mutual Use Association Map
The Japan Transit IC Mutual Use Association project started in 2007 and achieved transit and e-money interoperability in 2013. It continues to evolve and incorporate other transit smartcard systems into a single standard. Wikipedia

PiTaPa is the perpetual outliner of the major Japanese transit smartcards: Suica, ICOCA, TOICA, SUGOCA, Kitaca, PASMO, manaca, Nimoca, Hayaken. Starting in 2006 the major transit cards were stitched together into one common national platform for mutual transit and e-money use achieved by 2013. The result is the fertile ground that Apple Pay Suica is growing and thriving in. Apple Pay VP Jennifer Bailey recently said that Apple Pay is doing well in Japan. The Apple Pay Japan story is all Suica and transit reamains the golden uptake path for contactless payments on smarphones.

And then there is PiTaPa. PiTaPa is the main transit smartcard for non-JR ‘private’ rail companies in the Kansai: Hankyu, Keihan, Nankai and Hanshin. The excellent Japanese Transit IC map graphic on Wikipedia perfectly captures the problem of PiTaPa incompatibility and isolation: the background blue is transit only compatibility, the red is transit and e-money compatibility.

The PiTaPa Story
PiTaPa has an interesting history but not a particularly happy or successful one. It’s the perfect case study of what happens when banks and credit card companies call the shots on transit ticketing system infrastructure instead of letting transit company management make those decisions. It’s also a story of how most Japanese transit companies, except for JR East, failed to see the coming revolution of mobile digital wallet platforms.

The PiTiPa founding members originally planned to build a transit IC smartcard system just like Suica: pre-paid stored value (SV). Then Sumitomo Mitsu stepped in with a seemingly good idea: a Sumitomo Mitsui credit card + transit card post-pay combo card to save transit users from having to recharge the transit card smartcard at all. A credit card transit card for transit and shopping. What could go wrong? The Kansai area is home town for Sumitomo Mitsu, the Kansai banking indsutry Godzilla for over a hundred years, how could transit companies, Sumitomo Mitsu borrowers all, resist?

And so PiTaPa was born in 2004 as a Frankenstein credit card grafted with a transit card appendage that was supposed to do it all, but never delivered the benefits of either one. Sumitomo Mitsui imposed all the hoary old credit card conventions on the shiny new creation: credit checks and spending caps. It immediately shrunk the PiTaPa user base from everybody to people with good credit ratings who passed Sumitomo Mitsui credit checks. Compare this to Suica where everybody from kids to retirees with a ¥1,000 bill can buy Suica card at a station kiosk. That’s the beauty of stored value cards, simple immediate purchase and use.

The original PiTaPa did not sit well with a lot of transit users so a ‘PiTaPa lite’ card with deposits instead of credit checks, without the e-money function, was added in 2007. Unfortunately since PiTaPa was post-pay, PiTaPa didn’t work with the Japanese Transit IC e-money standard and was shunned by payment networks and merchants. Good luck trying to use PiTaPa credit outside of its core transit ghetto at 7 Eleven, other convenience stores or anywhere else.

If you want to know how well PiTaPa is doing in 2018 all you need to do is check the commuter pass pages of the PiTaPa member railroads: Keihan and Osaka Metro offer ICOCA commuter passes. Not only that but Osaka Metro and Keihan have moved away from PiTaPa commuter passes for general issue and use ICOCA instead.

No Future
The decision to let Sumitomo Mitsui call the shots instead of transit management killed any viable future for the PiTaPa system. PiTaPa uses the same FeliCa technology behind the highly successful Mobile Suica and Apple Pay Suica, but the unique one-off system architecture, limited user base and transaction volume mean PiTaPa will never be hosted on any mobile digital wallet platform. PiTaPa transit partners don’t want to spend resources to build a cloud and host mobile service because there is too much cost for such little return. And Sumitomo Mitsu will certainly never foot the bill to clean up the mess they created.

Now that JR East and Sony have announced ‘Super Suica’ for April 2018 that will incorporate all Japan Transit cards into one card system for transit, e-money and mobile, the PiTaPa participants face a choice: junk the old PiTaPa and get onboard the Super Suica express or be left behind in isolation with no future.

Transit payment platforms
The basic unsolvable problem is that banks and credit card companies want different things than transit companies. Banks and credit card companies want credit checks and caps, transit companies need as many people going through the transit gate as efficiently and safely as possible. These fundamental business differences will never be resolved, there will always be tension. That is why banks and credit card companies should never be in charge of running transit gates. They simply want to take their credit card cut and run, leaving the scene of crime, and the cleanup bill, to others.

You can see the similar things playing out on other transit systems such as Hong Kong’s Octopus system with AliPay and other QR Code ‘virtual banks’ putting pressure on operators to change transit ticketing system infrastructure to suit their needs, all paid by the transit operator of course.

It’s wasteful nonsense and who needs it? It’s last century credit card vs. smartcard, open loop vs. closed loop thinking. Digital wallet platforms like Apple Pay and Google Pay conveniently collapse the differences of open loop vs. closed loop rendering the whole argument pointless while offering a whole new game. Build a transit payment platform instead, in the long run it’s a win-win for transit companies and the banking industry.

It’s very simple: transit companies and a finance industry that stick with the old ways of thinking will miss the major unique new business opportunities offered by transit payment platforms hosted on digital wallet platforms, opportunities that build on transit but also extend it to exciting new places, a transit platform that grows and benefits everyone.

Important Suica App update due October 10

JR East announced an important Suica App update that will drop immediately after the early morning Mobile Suica maintenance window that ends 5:30 am JST. The new version is Suica App v 2.3 with seemingly minor app UI changes but has big updates on the cloud service side. The new features are:

  • Mobile Suica password resets can be done from Suica App. Finally. Until the new system becomes operational, ‘I forgot my password’ resets can only be done with a web site form or calling the Japanese only, hopelessly overloaded Mobile Suica Call Center.
  • Mobile Suica members can cancel their account without logging in. This is very convenient for users who want to switch to Android devices. Because of the way Apple Pay and Mobile Suica are integrated, users have to cancel their account and set up a new one for Android use.
  • Mobile Suica members can see Suica cards parked on the Mobile Suica cloud. This is extremely useful to have in case you delete Suica on one device but have yet to load it onto a new one, or forgot you even had another Suica card. Anything parked on the Mobile Suica cloud will all be there and visible in Suica App.

There are great new features and I look forward to using them. It should also help free up the overloaded Mobile Suica Call Center as users can take care of mundane Suica account management without calling in. It would be great if the Apple Pay Suica performance enhancing iOS 12.1 update drops at the same time.