Apple Pay Suica Shinkansen 2019

Suica is the only transit card in the world on mobile that covers both high-speed rail and regular transit. Apple Pay Suica can be used for eTicket Shinkansen travel on all Shinkansen lines and ticketless travel in designated regions on JR East Shinkansen lines. However, Shinkansen eTickets are more about convenience over price: paper tickets usually have better discounts unless you dig deeper into the system.

There are big changes on the horizon. JR East announced that the current Mobile Suica Shinkansen eTicket service will end March 30, 2020. It will be replaced with a completely new eTicket system and a new, likely multilingual, version of Suica App. JR Central/JR West are sure to be making changes at the same time. And this is just the run-up to the huge changes coming with Super Suica in April 2021.

The current eTicket system is a evolutionary mix of 2 different ticketing systems built by the separate JR company groups that operate the Shinkansen lines:

  • JR East created and uses Mobile Suica eTickets downloaded to Apple Pay Suica, Google Pay Suica and Osaifu Keitai for travel on Tohoku, Yamagata, Akita, Hokkaido, Joestsu, Hokuriku Shinkansen.
  • JR Central/JR West created and uses the EX system (smartEx and Express Reserve) that links a online eTicket to a preregistered plastic transit smartcard number for travel on Tokaido (Tokyo~Osaka) Sanyo (Osaka~Hakata) Shinkansen. It is not ticketing for mobile devices because JR Central/JR West don’t have a Mobile Suica-like transit card system. In this case Apple Pay Suica is just another linked transit card number, EX doesn’t know or care if it’s a real card or not.

JR East also offers ticketless Shinkansen travel for any Touch and Go service registered Apple Pay Suica or plastic transit IC card. Just like EX, the Touch and Go system doesn’t know or care if it’s a real card or not.

Changes in 2020

Nothing has been announced but here are some expected changes coming in April 2020.

  • New JR East eTicket system covering both Shinkansen and regular express trains for both Mobile Suica (Apple Pay Suica, Google Pay Suica, Osaifu Keitai) and registered plastic transit cards of all colors (ICOCA, PASMO, etc.). In some ways it will resemble EX with a new JR East banded eTicket app and matching online site, but it will also be Mobile Suica savvy.
  • New Suica App that will be highly integrated the new e-Ticket service and finally multi-lingual. I hope that EX service will be integrated into the new Suica App as well, but this might a feature that will have to wait until Super Suica in April 2021.

JR East has said that they hope to expand the ticketless Touch and Go Shinkansen travel region, but I suspect this is another feature that will have to wait for Super Suica when the current ¥20,000 Suica SF balance limit will likely be raised, or even doubled.

In any event, Shinkansen eTicket services will greatly improve in 2020 and beyond. It will be fun.

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Rakuten Pay Super Suica Connection

IT journalist Junya Suzuki wrote an interesting piece for Impress Watch detailing the recent Rakuten Pay Suica announcement. Unfortunately there was a major missing piece of analysis: Super Suica. I asked him about it.

I look forward to reading Suzuki san’s take, meanwhile here is mine. It has everything to do with the Japan Transit IC card standard and the common eMoney purse that I wrote about in the Apple Card piece.

(The) Japan Transit IC card standard occupies a very special category, 255 transit companies form a common interoperability standard which started from Suica. There are more issued Transit IC cards than people in Japan, everybody has one.

The core group of 9 major cards (Suica, PASMO, ICOCA, TOICA, Kitaka, manaca, SUGOCA, nimoca, HAYAKEN) also share a common prepaid purse: Transit IC eMoney. The national coverage and scale of the major cards transforms Transit IC eMoney into something special found nowhere else: a de facto national prepaid card standard.

File:ICCard Connection en.svg
Japan Transit IC Map, a very cool animated timeline is also available

Pay close attention to the transit cards that encircle the pink area, with the exception of PiTaPa. These are local rural area transit cards that are currently orphaned from both the common eMoney purse, and transit interoperability.

In April 2021 Super Suica will enlarge the pink area to include these orphaned cards. They will join the common eMoney purse and be compatible with all the pink area cards for transit and purchases. These will also be on Apple Pay Suica, Google Pay Suica and Osaifu Keitai.

That is a huge change in and of itself, but there is another very important aspect. All of these orphaned rural area transit cards are basically cash recharge only. Rural area transit companies operate on shoe string budgets and cannot afford the infrastructure cost to host credit card recharging on the back end even for kiosks.

Super Suica will solve this problem and what better solution than Rakuten Pay Super Suica for all rural Rakuten Pay users, and there are lots of them. This is the major sweet spot that Rakuten and JR East are aiming for. It merges the Rakuten Pay backend with the Super Suica frontend into one convenient service for transit and eMoney purchases while leveraging lucrative Rakuten loyalty points. Rakuten has the best integrated point system in Japan and JR East wants to use it to extend the Suica Platform nationwide. Rakuten Pay and Super Suica belong together, like peanut butter and jelly.

Apple Pay and the art of 2-way disruption: how Super Suica will change contactless payments in Japan and beyond

Super Suica Card
The new ‘Super Suica‘ card will replace all local transit cards for a single national transit and e-money card but still offer all the local commuter plans and point systems.

Global FeliCa iPhone, FeliCa Pixel, Super Suica and all that
Apple Pay Japan arrived just 2 years ago and has clearly disrupted the Japanese contactless payments market in many important and interesting ways. Things can change quickly and the disruption isn’t one way. Here is a timeline:

  • 2014
    Apple approaches JR East to have Suica on Apple Pay which requires Apple to implement the FeliCa embedded Secure Element (eSE) on A-Series/S-Series chips and set up a FeliCa Networks licensed key server.
  • September 2016
    Apple announces FeliCa support for iPhone 7 and Apple Watch 2 Japanese models, Japan Transit IC card e-money use is approximately 5.5 million transactions a month with a 10% YOY growth rate.
  • October 2016
    Apple Pay Japan starts with Apple Pay Suica as the centerpiece.
  • September 2017
    Apple announces iPhone X, iPhone 8 and Apple Watch 3 that have global FeliCa support: anybody coming to Japan can add and use Apple Pay Suica.
  • October 2017
    SmartEx Shinkansen Service starts: anybody coming to Japan can use Apple Pay Suica for Shinkansen travel.
  • September 2018
    Apple announces iPhone XS, iPhone XR with the A12 Bionic powered Express Cards with power reserve feature that builds on the global FeliCa feature of previous models, far more important for use in Japan than any other market, Japan Transit IC card e-money use tops 7 million transactions a month with a 20% YOY growth rate.
  • September 2018
    JR East and Sony announce ‘Super Suica’ card, starting April 2021 Super Suica will incorporate all Japanese transit cards in one card for transit, e-money and mobile.
  • October 2018
    Google announces Pixel 3 with FeliCa support, a first for Google hardware. Google Pay matches Apple Pay but only on a Pixel 3 JP models further splintering the Android platform between haves and have-nots.

As I predicted a year ago, the global FeliCa iPhone with NFC switching took Apple Pay to a whole new level and made FeliCa a de-facto NFC smartphone standard checklist feature that Google Pay could not match unless Google made their own hardware version of it, which they have done with Pixel 3 in Japan, their first official entry with Japanese carriers. If Google continues to follow Apple’s lead then Pixel 4 should be global FeliCa with NFC switching that further divides the ‘pure Google’ Google Pay haves from the have-nots.

The Apple Pay Black Ship
Japanese IT journalist Junya Suzuki wrote that Apple Pay would be the ‘black ship’ that would revolutionize Japan’s contactless payments market. Apple Pay was the match that finally lit the fuse of the huge Japanese contactless transit and payments infrastructure investment and launched it into orbit. In the 2 years since it’s arrival. Apple Pay Suica kicked Japan Transit IC card e-money growth into high gear 20% YOY growth even though most of the action is Tokyo area based: estimated e-money transaction growth rates in Tokyo alone are 40%. The first year of Apple Pay Suica proved that stored value (SV) transit cards, not credit cards, are the golden growth path for contactless payments.

And now because of the success of Apple Pay Suica, JR East and Sony are taking it to the next level developing the next generation Suica container format, which doesn’t have a real name yet (local coop transit smartcard?). I call it Super Suica and it’s due to launch April 2021. Super Suica will change Japanese contactless payments and transplant the Apple Pay Suica transformation from the Suica Tokyo home area to all transit regions nationwide. Everything transit will be on Apple Pay, everybody everywhere can use it for transit and e-money. Google Pay and Osaifu-Keitai will be there too.

But Super Suica isn’t just for Japan, it’s part of the vision JR East unveiled at the July 2016 NFC Forum Japan meeting to have NFC transit payment standards that work everywhere:

With a single seamless NFC standard and certification process in place, JR East roadmap goals are very clear:

  • Japanese customers with Mobile Suica devices can use their devices for public transportation and transit payments abroad.
  • Global specification certified NFC devices from abroad can use Mobile Suica.

Current limitations
NFC certification and global FeliCa smartphones are taking care of the hardware side, but NFC transit payments interoperability isn’t there because there hasn’t been a roadmap. Super Suica is the first step to create one. Japanese transit cards have been compatible with each other for transit and e-money since 2013 but important pieces are missing: commuter passes and point systems are still chained to local transit cards and have to be managed locally. You can travel with Apple Pay Suica anywhere, but you can’t add a commuter plan for an area outside of the Suica transit network.

Because of the costs associated with maintaining local data and account management it’s very difficult and expensive for large transit companies to host systems on mobile digital wallets. Nobody outside of JR East has managed to do it. It’s expensive for smaller local transit companies to issue smartcards and impossible to host them on mobile. Super Suica containers will solve these problems and greatly reduce costs not only for plastic card issuance and operation but also for hosting them on mobile digital wallet platforms.

Super Suica Roadmap

Super Suica Containers
The JR East and Sony co-development announcement of a ‘national’ super Suica card sounds exactly what the Aso government proposed back in 2008: one card to replace local Japanese transit card variations such as ICOCA, TOICA, SUGOCA, Kitaca, PASMO, manaca, Nimoca, Hayaken and others into a single card that does it all. JR East and Sony plan to have Super Suica in circulation starting April 2021.

Development is divided between Sony, JR East and JR East Mechatronics (JREM), the JR East subsidiary company that manages Mobile Suica.

  • Sony: updating FeliCa OS for the new format
  • JR East: coordinating the deployment effort with the other transit companies
  • JREM: physical card development, providing background services for issuance and mobile

The press release is terse and light on details but 3 points are very clear:

  • Cost reduction
  • Support for local commute plans, points, branding and more in addition to the regular stored fare transit and e-money features of current issue cards
  • Everybody on board

The aim is clear: instead of complicated expensive account management systems that babysit all the extra functions the cloud magically attaches to current transit cards, with every transit company doing it differently, Super Suica will be a universal container that takes care of the extras on the card itself. There will be established protocols and one common format with a new FeliCa OS version to handle everything.

Current Account based Mobile Suica

Containers vs account management

This approach will streamline and simplify the entire Japan Transit IC system process for plastic cards and mobile, significantly lowering costs without sacrificing the great things about Suica: blazing speed and local processing without a network.

Functions that are geeky and complex like setting up auto-charge or purchasing Shinkansen e-tickets will become much easier and accessible. Missing functions like discount tickets, special fares, and regular line express train ticketing will be possible on mobile. JR East has talked about raising the current 20,000 JPY Suica balance limit, Super Suica is the perfect opportunity to finally do it.

The outcome for Japan
The change for Japan is obvious: the success of the Suica transit payment platform in the Tokyo region is made available everywhere. Actually it already is available everywhere but Super Suica will supercharge it.  JR East will offer to host everything on mobile so that everybody in Japan can use Apple Pay, Google Pay or Osaifu-Keitai for local transit, purchases, while offering all the local goodies and incentives.

Other big players like JR Central and JR West may not opt-in for hosting on Mobile Suica for political reasons but the incentives are certainly there and the cost of getting somebody else’s cloud service to do it will be much easier and cheaper than it is now. JR East looks eager to go the extra distance to get everybody on Mobile Suica cloud and should make clear that Mobile Suica is only managing containers, not account data.

The outcome outside of Japan
The possibilities outside of Japan are going to be interesting. Could the Hong Kong Octopus system opt for the new format and could it be made cross compatible? It’s nice to think that sister systems like Octopus and Suica could do that some day. Even if that doesn’t happen, the Super Suica container format will offer Octopus the same benefits of lower costs and make it easier to deploy on other digital wallet platforms outside of the currently exclusive Smart Octopus in Samsung Pay.

More than cross compatibility however I think Super Suica will shine a much brighter light on the shortcomings of using ‘Open Loop’ EMV contactless credit card payment networks for transit: non-existent account management, simple fares only, no commute plans, no points that tie in with other transit company services, etc. These are problems that are prohibitively expensive for any transit company to fix on their own and the banking industry payment networks will not.

EMV contactless transit shortcomings
EMV contactless for transit might seem like a good idea but it doesn’t deliver as much for the investment as Super Suica.

You know things are really bad when 9to5 Mac writes this about using Apple Pay on the Milan Metro:

A handy tip for anyone wanting to get around with Apple Pay without causing a fuss is to authenticate Apple Pay as you approach the gate. Doing it in advance helps remove the awkwardness of holding up other people if your fingerprint or face isn’t recognized first time, for instance.

This is a perfect example of dead-end last century credit card vs. smartcard, open loop vs. closed loop thinking and where it has brought us. Digital wallet platforms like Apple Pay and Google Pay collapse the differences of open loop vs. closed loop and destroy the old arguments while combining different NFC technologies and middleware software into one compelling new whole the creates an entirely new game: Build a transit payment platform instead.

A stored value native transit card on the front end with a credit/debit card on the backend for Apple Pay or Google Pay recharge is the best arrangement that leverages the strengths of both approaches working together instead of the old antagonistic and wasteful A or B arguments. In the long run it’s a win-win for transit companies and the banking industry.

For Asian countries that already have FeliCa transit systems (India, Indonesia, Hong Kong, Vietnam) Super Suica will let them do more. For transit companies in America and Europe, Super Suica will be a great chance to re-examine long-term goals and choose the best mix of technologies in light of the new business opportunities and models that digital wallets and Super Suica roadmap will offer.

One thing is clear: transit companies that stick with the old ways of thinking will miss unique new business opportunities offered by native transit payment platforms hosted on digital wallet platforms, opportunities that build on transit but also extend it into new places.

JR East and Sony creating ‘Super Suica’ card for all Japan

Super Suica Card
The new super Suica card will replace all local transit cards for a single national transit and e-money card but still keep all the local commuter plans and points intact.

JR East and Sony announced co-development of a ‘national’ super Suica card that will replace local Japanese transit card variations such as ICOCA, TOICA, SUGOCA, Kitaca, PASMO, manaca, Nimoca, Hayaken and others into a single card that does it all. JR East and Sony plan to have the card in circulation starting April 2021. Too late for the 2020 Summer Tokyo Olympics party certainly, but great news for transit customers nationwide nevertheless. The clouds of uncertainty have parted, the transit platform future in Japan shines bright.

Japanese transit cards are already compatible with each other for transit and e-money purchases but commuter passes and point systems are still tied to local transit systems and not directly managed or stored via the current transit card architecture. You can use Apple Pay Suica in Nagoya and Osaka, but you can’t add a Suica Commuter Plan for an area outside of the JR East rail network. Also it is difficult if not impossible for smaller transit companies to host local transit cards on mobile. The new super Suica card will solve these problems and reduce costs for everybody. I suspect the current ¥20,000 Suica Card balance limit will also be raised to ¥40,000 or more for Japan-wide ‘Touch and Go Shinkansen’ service.

The new card will likely resemble the recently released Mizuho Suica: a basic super Suica card with localized branding, commuter plans and point systems. The Mobile Suica cloud infrastructure is already in place so everything will be hosted on that but there is much backend work for JR East to do for a 2021 launch. For it’s part Sony has to update the FeliCa middleware stack to make it all work on the new card architecture then deliver it to FeliCa licensees like Apple so they can incorporate it in iOS and watchOS.

It will be great to have a single Apple Pay ‘Super Suica’ card that can do it all, from ‘Touch and Go’ Shinkansen to commuter plans and point systems nationwide. There is no doubt in my mind this is the disruption that Apple Pay has brought to Japan. The market implications are enormous. It is the Apple Pay Suica Tokyo area growth outlined in the Apple Pay Japan One Year Mark replicated all over Japan. I don’t know about you but I can hardly wait for the next stage of Apple Pay Super Suica to arrive.

Update: more details and analysis here