Transit Gate Evolution: Do QR Codes Really Suck for Transit?

The short answer of course is: yes, QR Codes really suck for transit, which Abacus first reported on when the QR code transit meltdown hit Chengdu last April. Abacus is taking a closer look at the problem again in a new piece, QR code payments make long commutes even longer in China:

while QR codes have proven remarkably effective at meeting most people’s mobile payment needs, it seems ill-suited for public transit compared with NFC. Since NFC relies on radio waves, payment requires only a tap of the phone. There’s no need to wake it up or turn the screen on, making it as convenient as traditional transit cards.

The limitations of the <QR> technology are apparent even as cities race to install QR code scanners in turnstiles across the country. Over time, though, the inconvenience might be enough to nudge China away from its reliance on QR codes.

The long answer requires a quick look at transit gate technology evolution. The success of Suica can be found in its development process, a fascinating story by itself. The Suica card and transit gate were developed as one thing to replicate the ease of flashing a commuter pass to the gate attendant without stopping.

A video of old style paper ticket manned gates illustrates the start point. There is no physical barrier. People slow down to get their ticket punched but rarely stop. For a commuter pass the user flashed a wallet with a clear plastic window at the attendant and kept on going, shown at the 0:16 mark:

Shigeo Miki came up with an idea of using IC cards for tickets. The magnetic-type ticket automatic gates, which were in use since the 1980’s, had some inconvenient aspects. Old-style passes could be shown to attendants without being taken out of their cases. But to use automatic ticket gates, passengers had to take them out, pass them through the automatic gate, and then put them away again. He thought that was a decline in service quality…

JR East “Following the track leading to Suica

This was the late 1980’s when IC cards were just coming into wider use, but not for transit. The Suica project had a large impact on Sony FeliCa development as did the Hong Kong Octopus project starting in 1992…

Furthermore, systems that read ID data from read-only cards and interact with the main computer each time someone goes through the ticket gate could not keep up with the enormous volume of data processing transactions in rush hour. So Miki and his fellow researchers perceived that the cards must be read/write types.

There we have it, the Suica project goals were: open gates, waving commuter passes, local processing. Magnetic strip paper ticket gates got faster, Omron states the speed is within 600 Milliseconds (MS), and better with the ability to handle and sort multiple tickets at a time. Suica is cool but nothing is cooler than watching the physical action of a well designed machine:

Despite development problems and a low research priority within JR East at the time, Suica success was achieved by moving the battery supply from the card to the gate and creating fast reliable performance with an illuminated target NFC ‘hit area’ tilted forward at 15 degrees, the same design you see today on the JREM EG-20 transit gate. The EG-20 already looks surprisingly similar to the open public transport gate concept. (Here’s a Japanese website that catalogs every JR East ticket device if you are interested)

Smartcard Transit Gates Compared
Smart transit cards were an important development that revolutionized transit and launched successful systems such as Suica, Hong Kong MTR Octopus and TfL Oyster. However all smart transit gates are not equal. Compare the Malaysia Touch n’ Go gate speed with Suica on EG-20:

One of the commentators notes the crucial differences: FeliCa (used for Suica and Octopus) is the most efficient NFC protocol, 212 kbps minimum/847 kbps maximum, while Touch ‘n Go is mainly MIFARE Classic at 106 kbps an “early form of ISO 14443A, …the least efficient NFC protocol.”

There is another crucial difference: Japan transit gates are open by default and close only when needed, just like the old manned JR gates, while Malaysia and Hong Kong gates are closed on default or use old fashioned turnstiles. The combination of the Ferrari fast FeliCa combined with the well designed JREM EG-20 gate (and variants) that is default open, keeps people moving, best highlighted in a Pokemon Go event ‘Pikachu’ transit gate video:

Suica speed is part of what makes it fun but there is a serious reason behind it: major Japanese transit operators like JR East have to move a tremendous volume of people through a fixed station infrastructure space that cannot be enlarged. Bigger stations with more transit gates are not an option. So the system focus is using the fixed space infrastructure as efficiently as possible. That is why the Suica transaction speed is less than 200 MS, that is why a Suica transit gate must clear 60 people a minute.

Open Loop Multiple Protocol Transit Gates Compared
Using EMV contactless with cards and smartphones, or QR Codes on smartphones for transit instead of native transit smartcards, is a step backwards from the fast read/write local processing model of Suica, and back towards read only centralized processing, one of the original system bottlenecks that Suica was designed to avoid. The QR Codes used for transit in China appear to be particularly slow and a poor match for high traffic stations. Poor gate design is certainly a factor here.

EMV has it’s own transit gate problems as well, as Singapore transit users found out in the recent rollout of EMV SimplyGo service there, things slow down:

It’s fascinating that Singapore’s Land Transport Authority (LTA) dumped the fast FeliCa (rated 200 millisecond transaction but Octopus clocks in at around 100ms) behind EZ-Link cards to roll their own faster CEPAS technology (rated 180ms transaction) but are now letting super slow EMV contactless (500ms plus and counting) on their transit reader infrastructure. It’s like ripping out all the cutting edge transit gate technology and replacing it with clunky old supermarket cash register technology.

The last comment in the first Twitter timeline is an important observation: most EMV transit is simply grafted onto the current transit gate infrastructure which was designed for something else, a factor contributing to unreliable performance, forcing users to adapt. Most of the multi-protocol transit gates in service are poor design.

This leads to another EMV issue users have to adapt to: ‘card clash’. When EMV is bolted onto an existing system slapping a wallet on the transit reader doesn’t work anymore, the card has to come out of the wallet. This is still one of the nice things about plastic Suica cards. Young Japanese women in particular seem to enjoy slapping those cute little Hello Kitty wallets on the gate reader with a surprisingly hard thwack, stress relief perhaps? Chicago Ventra support offers insight on the current state of EMV transit:

  • Get your device ready, first, for fastest entry
  • “Card clash”: touch only your desired payment method
  • Multiple credit cards: always use the same card on the same device on transit readers

These are issues that Apple Pay EMV Express Transit is designed to fix by designating a single EMV bank card for transit but it cannot change the inherently slow EMV transaction speed or solve the limitations of EMV bank card architecture which is basically centrally processed read only. There are limits on how much the central processing read only model can achieve when fast, precise, local transactions are required. All EMV Express Transit does it designate a bank card that tells the transit gate reader: I am a real bank card, not a forged one, we’ll settle the bill later.

That’s why complex transit fares are only supported on read/write native transit cards like Oyster on TfL, not EMV bank cards. It’s also the reason why manual swipe MTA Metrocards will be around for a few more years, the new OMNY Apple Pay Transit was not particularly fast or reliable at startup. Things will get better, a real OMNY transit card for plastic and digital wallets is due to arrive in late 2020. Last but not least, using EMV contactless for transit does carry some potential fraud risk that native transit cards do not.

Japanese IT journalist Junya Suzuki tests OMNY transit gate speed…
and reliability

The China Situation

The Abacus article highlights multiple protocol Chinese transit gates: paper tickets, NFC, QR Codes and Face recognition. Oh, and closed by default gates. This is not a fast transit gate environment.

The Abacus article points out the slow uptake of NFC, blaming it on UnionPay, but it boils down to the PBOC flavored EMV spec itself:

Each card organization has formed its own specifications based on the EMV specification based on its own business refinement and expansion, such as China UnionPay’s PBOC 2.0 specification, VISA’s VSDC specification and MasterCard’s M/Chip specification. Each specification follows the EMV specification for basic transaction processes and security mechanisms, but differs in terms of data element definition and extended application…PBOC based on the EMV standard, combined with the needs of domestic banks, the People’s Bank of China promulgated the PBOC series of standards:
1 PBOC1.0: e-wallet / electronic passbook / magnetic stripe card function
2 PBOC 2.0: E-wallet extension application, debit/credit application, personalization guide, contactless IC card standard
3 PBOC 3.0: Cancel e-wallet and electronic passbook application, cancel downgrade transaction, multi-algorithm extension, multi-application extension, mobile payment standard

Super Lu

Beijing and Shanghai Transit cards were originally MIFARE but instead of examining what technologies would be best for next generation transit needs, China simply migrated them to the much slower PBOC 2.0/EMV specification implemented on the China T-union transit card architecture. The China T-union card is country wide transit prepaid card spec for interoperable transit cards that can work everywhere, similar to what Japan has with Suica, ICOCA, PASMO, etc.

Unfortunately, the rollout of new format card issuance has been slow and piecemeal, with no apparent promotion push to educate transit users. Chinese users familiar with Suica performance find China T-union cards slower and less reliable at the gate. Because PBOC is slow EMV NFC spec 500 MS transaction speed and tightly chained to UnionPay, the transit gate performance edge is not great enough to ween users away from QR Codes and the point benefits of sticking with AliPay and WeChat Pay.

If the performance gain was similar to the huge Suica over QR difference, coupled with an open flexible backend for using different payment methods to add money, China T-union would stand a better chance of nudging QR users to NFC for transit. As it stands now, there’s no real difference between a UnionPay card and a China T-union card at the transit gate. One is post pay, the other is prepaid, 2 versions of the same thing, marginally faster than QR, but not much.

Whatever the causes for the current situation, it’s a perfect gift to Chinese QR code players, I suspect that the arrangement is also a profitable one for the Chinese government on some level because if it was not, they wouldn’t be adding QR Code readers to transit gates.


QR Codes for Japan Transit
Some Japanese tech journalists have fretted about JR East not embracing QR Codes on transit gates because JR Central plans to completely eliminate paper tickets for the next generation Chuo Shinkansen. It’s less about QR and more about eliminating magnetic strip paper tickets. JR East does have limited QR code use for ticket purchases at station kiosks, we’ll likely see wide support of many cashless payment options, QR included, with the new JR East eTicketing system due in April 2020.

QR Codes have seen some limited use on local monorail systems such as Okinawa’s Yui Rail but Suica compatilbilty is coming to the system in April 2020. The next generation Super Suica that does a lot more for much less, will arrive in April 2021. QR Codes for transit use in Japan will reamain a small side show far away from the main attraction.


In summary, the use of EMV bank cards and QR Codes for transit all comes down to transit company priorities for safe operation, better customer service and long term business goals. My position has been and continues to be is that it’s a better long term business opportunity for transit companies to:

  • Offer robust support of bank cards, QR and digital wallets on the backend for adding money to native transit cards on digital wallets and plastic, where they are really useful and add value without giving control away to outside companies.
  • Use closed loop transit gate value capture to focus on building better services tied to transit cards that benefit customers and businesses of the entire transit region, aka the transit platform business model.

It’s a simple choice really, moving people quickly and safely by transit, managed wisely, is a license to make money. A company can either use that license to build something of greater long term value for the users and businesses of the transit region, a win-win, or give it away to someone else.

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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.

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

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 often more about convenience over price: paper tickets usually have better on the spot discounts unless you dig deeper into the system and sign up for services in advance.

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.

Shinkansen eTicketing 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 cloud 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 use the EX system (smartEx and Express Reserve) that links a online purchased eTicket to a preregistered plastic transit smartcard for travel on Tokaido (Tokyo~Osaka) Sanyo (Osaka~Hakata) Shinkansen. It is not a download eTicketing service for mobile devices because JR Central/JR West don’t have a Mobile Suica cloud-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 plastic 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.

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 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.