Hi all, I know this question is asked a lot, but I'm curious about the deeper reasons for this apparent gap.
I'm Australian and our IC cards are auto-topped up with credit cards, but ICs are purely used for transport. So for everyday, credit card use is more ubiquitous.
It seems in Japan, you can pay for almost everything via tap and pay (within its max limit) with an IC card, so in that sense you almost don't need a real credit card except for bigger purchases. An IC card feels mandatory anyway due to its use for transport. I've seen this similar pattern in Hong Kong.
But what I find truly bizarre is
you can only recharge it with cash. Doesn't that mean you're forced to get cash out purely to top up your IC card? At best, you have to go to a 7/11, get cash out, then walk to the cashier to top up your IC with the cash you just took out. At worse, you're forced to carry cash just so you have emergency cash to top up your IC when you don't have enough balance to exit a station. At this stage, cash feels like it's purely used for ICs. You can't even top up your ICs with 1-5Y coins, so ICs isn't entirely a cash store.
I get that you can recharge on an iPhone, but a) not everyone has an iPhone and b) tourists can't do this.
In Hong Kong, there is an app available for tourists and locals to top up their IC card with their bank card, so clearly this is doable.
So why don't banks in Japan fix this missing link? It seems to me that instead of having to upgrade every PoS terminal and install paywave into every train station gate in the country with modern cashless features, implementing digital top up of IC cards from credit cards would complete the cashless ecosystem for Japan at far lesser cost by taking advantage of how ubiquitous tap to pay via IC is already. It would also reap huge profits for the IC company that does it since they can get funds transferred into their system from third party banks (esp from overseas). That extra feature would make the IC card that does it first would have a significant feature compared to its peers.
It seems like all positives to me, but are there any negatives I'm not seeing? Does anyone know what the commercial reasons why this hasn't happened yet?
by surreptitiouswalk
7 comments
You can recharge it via CC via Pasmo/Suica apps.
Because Japan is very cash-based, and JR’s not super thrilled about having to pay payment processor monopolies like Visa a fee on every transaction.
Also: IC cards can be refunded for cash. But when you charge money via credit card, you don’t necessarily have that cash. You’re paying in advance, via _credit_. Physical cards like Suica were developed over 20 years ago (and are all-around still way more advanced than bank cards, and the tap speed is 5x as fast!) and were always intended to be prepaid cards that function as & act as a substitute for cash, not anything else.
I don’t know what an “IC” is, but Japan tends to be a good decade or two behind the West outside like, Honda and Sony press conferencing robot sex dogs that can do flips or whatever, especially when it comes to non-cash payment.
When I came like 20 years ago, already used to using a tiny bar-code based debit card designed to be looped onto a keychain to buy individual soft drinks at a 711 or the like, soon to be followed by even vending machines taking the plunge…
But then in Japan, the only place I ever saw accepting anything but cash was like, giant department stores where they’d still roll that physical imprinter thing over some carbon paper or something as a receipt, and presumably fax it to the creditor in question…
All that to say, to the extent you can top up anything with anything other than cash it’s still belated progress, and they’ll likely catch up to the rest of the world in 10 or so more years…
Basically, you’re talking about physical IC cards, right? To put it simply, I think it’s because the system is outdated. Some companies have stopped issuing physical IC cards altogether and are shifting to smartphone apps. At this point, integrating with banks might be more trouble than it’s worth. As you mentioned, mobile apps allow deposits from bank accounts, and QR code payment apps also support funding through credit cards or bank transfers. Since Japanese people are gradually transitioning to smartphone apps while still using physical IC cards, they don’t really pay much attention to the inconvenience this might cause for foreign tourists.
However, there are some concrete examples that come to mind. One representative case is **Suica**. Their system adopts a distributed computing model, where data is temporarily stored in computers at each station or region. This is because Japanese train stations handle an extraordinarily high number of passengers compared to other countries, requiring a system that avoids even the slightest delay caused by network-based transactions. If the network were to go down and an error occurred, passengers would get stuck at ticket gates, leading to massive congestion. This system does not necessarily guarantee communication with credit card companies.
[Auto top-up from credit cards](https://www-pasmo-co-jp.translate.goog/charge/autocharge/?_x_tr_sl=ja&_x_tr_tl=en&_x_tr_hl=hu&_x_tr_pto=wapp) can be set up for physical IC cards – but only from [specific japanese credit cards](https://www-pasmo-co-jp.translate.goog/charge/autocharge/application/?_x_tr_sl=ja&_x_tr_tl=en&_x_tr_hl=hu&_x_tr_pto=wapp) whose issuers have individual agreements with the railway company that issues the IC card.
There are even [credit cards that have the IC card functionality integrated](https://www-pasmo-co-jp.translate.goog/about/integrated/?_x_tr_sl=ja&_x_tr_tl=en&_x_tr_hl=hu&_x_tr_pto=wapp) – but this also means that those credit cards are incompatible with contactless payment terminals outside Japan.
Persumably the railway companies don’t want to pay the transaction fees to Mastercard / Visa / etc., and only allow auto-top-ups if they can deal with the issuer directly and get a better rate.
Eventually, you will be able to tap just your credit card. Some rail systems, such as Tokyu in Tokyo already do this. JR has announced big changes for the coming years, stay tuned.
People use transit passes that are paid for by the company twice a year.
Mobile Suica/PASMO is compatible with Google Pay and Apple Pay and allow you to top up via CC.
Tourists are left behind because they’re not a priority. Though things are changing in Tokyo with some lines having gates for contactless payment via CCs.