Thursday, May 17, 2007

Shiibashi, champion of Suica contactless product, named visionary of the year

While we in Europe focus quite a bit too much on old style, old world payments, there is more going on in payments. In Europe itself we overlook the huge amount of m-payments. And are slow in adoption of other technologies/solutions, such as the contactless e-money solutions. Meanwhile in Japan the Suica scheme may serve as an example. In this article there is a bit of background information; explaining also why one of Suica's champions, Akio Shiibashi, is named visionary of the year.

Shiibashi, who is director of the Suica System Department for East Japan Railway Co., supervises what has become by most estimates the largest contactless fare-collection scheme in the world–with more than 20 million Suica cards on issue and hundreds of millions of transactions per month. The scheme launched in November of 2001, and he oversaw introduction of an e-money service using the same application on the cards in early 2004. The cards, which run on contactless chips from Japan’s Sony Corp., are accepted at more than 10,000 merchant locations in Tokyo.

While the Suica scheme began service after the pioneering contactless transit ticketing and e-money service Octopus Card in Hong Kong in 1997, much of JR East’s groundwork preceded that of the Octopus project. Suica also has the distinction of offering interoperability with some other large contactless fare schemes in Japan, most notably with its counterpart in the Osaka-Kobe-Kyoto area, since 2004. This year, Suica finally extended interoperability with other transit operators in the Tokyo metropolitan area.

Even as he was preparing to launch the Suica fare cards in 2001, Shiibashi was pushing the idea of putting the ticketing application on contactless mobile phones. After several months of trying, he finally found a receptive ear in Takeshi Natsuno, guru of the successful i-mode, mobile Internet service, at Japan’s largest mobile network operator, NTT DoCoMo. The telco and its competitors have run with the concept and have sold nearly 30 million mobile-wallet phones, “osaifu-keitai,” in Japan.

JR East introduced its Mobile Suica service in January of 2006, allowing subscribers to buy monthly rail passes and reload their e-money accounts over the air. While the service stumbled during its first 10 months, changes, including streamlining of the registration process, has improved demand among subscribers.

It will be interesting to see how Oyster, Visa and Barclays will perform with their efforts to match this development...