The widespread launch Friday of the Edy e-money system in Japan marks the latest in a series of major roll-outs of contactless smart card-based systems across Asia. Millions of people in Hong Kong, Tokyo and Singapore are already using the cards in their everyday lives but few realize the systems in use on the transit systems of Asia’s major cities are all based on the same technology, and even fewer would be likely to correctly guess the system maker.

What started in 1988 as a solution for logistics companies, soon changed course to become one of the most widely used smart cards in Asia produced by no other than Japan’s Sony Corp., a company far more famous in the consumer electronics space than in the transportation industry.

“Actually, our advantage is fast communication,” said Jun Kondo, assistant manager of international business strategy at the Felica division of Sony. “We have competence in the transport area,” he adds, explaining the entire communication process from first identifying the card to checking the value stored inside and deducting the fare takes just 0.2 seconds. In Asia, which has some of the busiest public transport systems in the world, that’s an advantage over slower magnetic or contact IC (integrated circuit) card systems and can mean all the difference between a smooth flowing line of commuters and rush hour chaos.

Felica got its first big break in Hong Kong in 1997 when it was selected to form the basis for a new transit card system. Today, Hong Kong’s ‘Octopus’ system remains the biggest single implementation of Felica, with 8.6 million cards in circulation and daily transactions of 7.2 million. Users enjoy touch-and-go access all of Hong Kong’s major transportation providers, including MTR Corp., Kowloon-Canton Railway Corp., Kowloon Motor Bus, and others.

For a long time, Hong Kong was the only major implementation of the system however that all changed in November last year when East Japan Railway Co., which is the largest railway operator in the Tokyo area and is more commonly known as JR East, began replacing its magnetic card based transit card system with Felica. Around 4.3 million Suica cards can already be found in the wallets of Tokyoites and it can be used at almost 500 railway stations.

Elsewhere in Asia, Felica is also making inroads. Singapore’s EZ-Link system, which started operation in April 2002, is based around Felica and is in operation on 4 subway lines and over 4,000 buses. Future plans call for it to be extended to public telephones, parking and vending machines. The latest implementation is in Shenzhen, China, where a full scale launch is expected later this year. It will launch on 5,500 buses and be extended to the city’s taxis and new metro system in 2004.

With these successes, Sony also stresses there is more to Felica than riding the metro.

Before BitWallet Inc., a Sony-affiliated subsidiary that launched the Edy e-money system in Japan, started widespread roll-out of its system, Hong Kong transit card system operator, Octopus Cards Ltd., began working on extending its system into a broader e-money service. The Octopus card is now accepted at 7-Eleven and Circle K convenience stores, Starbucks coffee shops, Cafe de Coral restaurants and other fast food, cake shops and Coca Cola vending machines with future plans to extend the system to cover taxis and highway tolls. Such transactions still account for less than 10 per cent of daily use, according to Octopus Cards.

In contrast, the Edy system in Japan is not affiliated with the rail pass, although each uses a technically identical card and there is no technical reason why the two functions cannot live side-by-side on a single card. For now, Edy is still in its early stages and got a boost Friday when 1,400 AM/PM convenience stores began accepting the cards and are expected to issue around 1.4 million to customers.

“We are trying to penetrate from transport to other areas,” said Kondo, and the cards are well suited for multiple uses.

Each can store up to 40 different applications, including transit and e-money but also building access, credit or debit card, loyalty points, library cards, health identification-basically almost anything for which you currently carry a plastic or paper card, he said. In fact, all Sony employees in Japan use Felica-based cards for their corporate ID badges, allowing them access to buildings and offices, and the same cards also incorporate the Edy e-money system. Singapore is doing the same thing, offering student ID cards that double as EZ-Link transit cards.

The system is secure too. Sony says it is the only contactless smart card certified to ISO15408 EAL4 level, which is an international standard for security systems, said Choku Imazato, alliance manager in the Felica business division.

As for the future, Hong Kong offers the best glimpse of what might soon become a part of everyday life in the future.

In addition to a card, a smaller circular circuit has been produced. This was originally designed to fit into the back of a wristwatch thus removing the need to carry a card, has been produced and is currently on sale in Hong Kong embedded in the back of a Junghans Uhren Gmbh watch. The watchmaker also sold a number of these to Nokia and the company produced a special telephone cover that can snap on the front of its 3310 and 3330 mobile telephones.

The idea of combining a contactless payment system with a mobile phone hasn’t occurred just in Hong Kong. The second largest shareholder in BitWallet is NTT DoCoMo Inc., although the company has yet to announce any plans to combine the Edy system with its handsets.

However, for the system to become truly useful, there needs to be more cooperation between card issuers so that different applications can be easily loaded onto single cards. Governments might have a role to play here too, notes Kondo. While combing JR East’s Suica and BitWallet’s Edy services on a single card is easy in technical terms, legislation makes it all but impossible. Local law stipulates a couple of lines of small print need to appear on the back of Edy cards, just as railway by-laws mean certain terms and conditions should be on the reverse side of those cards, making combining them legally difficult.

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