Suica in Tokyo: How a railroad company invented electronic money

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Japan has a well-known problem when it comes to introducing modern technology: the country is often much earlier with new processes than other regions of the world – and therefore ultimately too late. This is because by the time other countries have caught up, a trend in Nippon is often already over and only comes back later, transformed, from the USA and Europe, and sometimes even China. Or the country even holds on to old things that were once very modern: The fax, which is even more important in Japan today than it is for German authorities, is one of them, as are early Internet-capable cell phones, which were then overtaken by the iPhone. This is known as the Galapagos problem – and is quite difficult for Westerners to understand.

Between Galapagos and cosmopolitanism

Suica, the world's first truly successful electronic money, could be pushed into this corner, but that would actually be mean. Although the RFID-based system has not caught on anywhere else, it can still be used with Western technology without any problems, even if you are only visiting Japan for a short time. The idea will be no less than 25 years old next year. The railroad company JR East, which was responsible for transportation in and around the Tokyo metropolitan area and various high-speed Shinkansen lines, was looking for a way to improve ticket sales.

"In the beginning, everything was done manually by one person stamping paper tickets," Hidehiko Kojou, who manages the customer experience of the mobile version of Suica including the operations area, tells heise online. "Then vending machines came along and people started using magnetic cards." The real revolution came in the fall of 2001 with Suica in collaboration with the Sony Group. The contactless system, known in Japan as the "IC Card" (including the corresponding logo), is based on FeliCa, an RFID smart card system. "We ourselves had done some technical research before the launch of Suica," says Kojou, "Then when IC chips emerged and FeliCa technology was developed in Japan, we began to investigate whether it would be possible to use FeliCa for a touch-and-go system. There was also a proposal from Sony, but we also approached them, and so we worked together interactively to develop it." FeliCa is not dead today either, having made it to Hong Kong (as the basis for the Octopus metro map) and Indonesia (Jelajah) as well as Japan.

Nationwide use via a standard

Tokyo has an extremely complex and diverse transportation system. There are two subway operators in the core city area alone, JR East with countless lines, plus a colorful bouquet of private rail companies, which in turn operate their own networks – plus additional systems such as monorails, hundreds of bus lines and some streetcars. Before Suica, you had to buy a separate ticket for each of these transport systems from a ticket machine, and studying fares was at least as complex as understanding the timetable if you didn't know Japanese.

After the launch of Suica, which was quickly well received by JR East, the system expanded rapidly. More and more public transport companies became interested in the system and installed the appropriate platform barriers (fare gates) at their stations. Pasmo was added in 2007 as a direct (but compatible) competitor to the other major companies. This was followed in 2013 by a nationwide breakthrough: the Nationwide Mutual Usage Service has since ensured that the local IC cards with names such as Manaca, Nimoca, Icoca or Kitaca, which are now also used in other regions, are compatible with each other. This means that a Suica card (or its mobile version) can also be used transparently and seamlessly on the local transport network in Nagoya or Osaka.

IC Cards in practical use

Using an IC Card is extremely simple: you get the physical card for a small fee (500 yen, just under 3 euros) from the machine and then load money onto it straight away. But here comes the first shock for Westerners used to credit cards: you can neither buy a Suica without cash nor load it without cash. Instead, the machines only accept yen bills. This means that new users can be sure of a trip to the ATM after landing in Narita or Haneda (or not, more on this below). A Suica can hold up to 20,000 yen, but kindly retains its remaining top-up amount for ten years after the last use. That is just under 123 euros. The system does not (yet) support higher amounts of money. In the meantime, there was a supply crisis in Japan for the chips required for IC cards, which made it slightly more difficult to purchase new cards. However, this is no longer an issue. If you really want a physical card, you should always use the normal "green" Suica (or Pasmo or another system), not the so-called Welcome Suica in red – unless you have no intention of returning to Japan. This is because the Welcome Suica expires after 28 days and there are no refunds for money still in it. At least you don't have to pay 500 yen as a deposit for the card, which you can, as JR East writes quite faithfully, "take home as a souvenir".

Once the Suica has been purchased with cash at the machine and topped up, you can start using it: if you want to enter a platform area, you hold the card up to the card reader at the fare gate and then go through. You do the same again when leaving the platform area at the arrival station, with the display at the Fare Gate then showing how much you have "traveled". The fare system is determined by the train companies themselves. Many people in Tokyo don't bother with this because of the comparatively low costs and recharge the card as soon as it is empty. Alternatively, you can put weekly or monthly passes on the cards if you live in the country. Buses and streetcars accept Suica (and Pasmo and all other systems), as do most cabs.

Everything gets better with a smartphone

If you have an iPhone or a reasonably modern Android device, you no longer need to worry about physical cards. Mobile Suica, the first ever iPhone-based contactless public transport ticketing system, has been around for almost ten years. "In October 2016, JR East began introducing a Suica card that can be added to Apple's Wallet. This allowed us to integrate our newly developed system into the Apple Pay platform, which caused the number of users to skyrocket," says JR East manager Kojou. Today, there are more than 30 million Mobile Suica users. Initially, however, only iPhones intended for Japan were supported, as only these contained the necessary FeliCa chip. However, the base quickly expanded. The feature has been available worldwide since the iPhone 8 from 2017 and the Apple Watch Series 3 from the same year.

This means you can use Suica, Pasmo and Icoca directly with any iPhone in use today. The practical thing is that it is either possible to import a physical Suica card and transfer its funds to the iPhone or to generate a virtual card on the device. This can be done via the Wallet app and costs nothing extra. And, finally, it is also possible to use credit cards as a means of payment for topping up Suica, Pasmo and Icoca - in fact, that is the only option there. All this is much easier than physical cards. The iPhone or Apple Watch can also be set to express mode, which means you don't have to unlock the device at the fare gate, but can simply hold it up to the reader. And what about Android? That's now possible too, of course. "The share of Mobile Suica for the iPhone is greater than for Android. However, Mobile Suica was introduced for Google Pay in May 2018. The number of Android users is now steadily increasing," says Kojou. The cell phone must be able to handle FeliCa, which current models often can. Nevertheless, you should check the specifications in advance so that you don't have to use a physical card in Japan.

The path to electronic money

Suica and the other IC Cards have long been much more than just tickets. They became the first electronic money in the world to establish itself in a large market. Although there were already trials with the "GeldKarte" (discontinued: 2024) in Germany and elsewhere in the 1990s, almost nobody used it apart from parking fees or stamps. Suica, on the other hand, is used in numerous stores near the station – and not only there – for daily purchases. This is the coffee shop or konbini multi-store that can be found on every corner in Japan. The countless vending machines (which not only supply drinks, but a wide variety of products) also work with IC cards. There are even chains, such as the Japanese branches of the Krispy Kreme doughnut chain, which do not accept Apple Pay, which is otherwise widely used, but only Suica as a contactless payment method.

However, there are now numerous competing payment methods in Japan, which heise online will report on in the coming weeks. However, Suica and the other IC cards have the advantage that they are indispensable as a means of payment for public transportation. And JR East wants to expand this. "There have been requests from our customers that they want to use Suica for more and other occasions. We have also received feedback that the maximum top-up limit of 20,000 yen for Suica is a little low," says Hisayoshi Hashimoto, Suica Marketing Strategy Manager. In a further step, Suica could also move away from cards and FeliCa-enabled cell phones altogether and JR East could integrate a QR code-based payment method into Suica that only works via app. This is part of a larger "Suica Renaissance" strategy for the coming years. In the future, platform barriers equipped with an increasingly complex array of payment methods could even disappear altogether: JR East is considering using a purely GPS-based method for billing travel connections from 2028. Incidentally, this would not really be new: in Germany, something similar – unfortunately ultimately unsuccessful – already existed until 2016 as Touch&Travel at Deutsche Bahn and various public transport companies, where the "touch" was the start and end of the GPS-registered journey in an app.

(dmk)