How Japan's railway systems accidentally invented contactless payments

The contactless miracle in action. Image: Yoshikazu Tsuno/AFP/Getty.

Last month, as well as knocking over a small child while playing rugby, London Mayor Boris Johnson spent part of his trade visit to Japan extolling the benefits of contactless payments on public transport. “I can get on the tube, I can get on a bus and just wave it in the general direction of the cashless receiver and, completely painlessly, very small amounts are deducted from my bank account,” he told a bemused audience.

There’s a reason his audience was so nonplussed. You see, Japan has had wave and pay systems – known as IC cards – in place since 2001. And they do it better than London.

Japanese IC cards will be familiar to all transport smartcard users: they're credit card sized pieces of plastic that you pre-load with money.  The fare is then calculated and deducted when you touch the card onto readers as you enter and exit the subway and buses.

For anyone used to London's transport system, this will produce a resounding sense of deja vu. Yet Japan's historic attachment to cash means the various transport cards had the freedom to expand into places that credit and debit cards colonised decades ago in other countries.


The result is that, almost by accident, the Japanese have created a more seamless system. Want to pay for a pastry in a lovely bakery? Tap your IC card. Thirsty? Here's a vending machine with its welcoming reader. Need to stash your bag at a train station? No need to fiddle for coins, just swipe.

At this point you're probably thinking: sure, but we have contactless for transport and buying things in shops. I've yet to see contactless on vending machines in the UK, but I'm sure it's coming.

But here's the stumbling block that was put to Transport for London when it stopped taking cash on buses: that's fine if you have a bank account in the country of use, but a bit of a pain if you don’t. If Japan wanted me to use my debit card rather than my Suica card (the Toyko equivalent of Oyster; it literally means "watermelon"), I'd get charged 2.75 per cent every time I used it.

That works out at a few quid for a fortnight's travel round Tokyo; a foreign-issued card used in London would rack up about the same. But then if you start adding up transaction charges for that pastry, and that bottle of water and that locker...

It is, in effect, a tax on tourists for using contactless cards. And since visitors inevitably need to pick up an Oyster card to avoid being bled dry by London's eye-watering cash fares, or simply to catch a bus, it'd be nice if the money on it could also be used for small payments elsewhere, too.

The generally accepted version of events is that this will never happen. TfL would prefer to let banks bear the costs of operating an electronic payment system than it would to continue to maintain its own; investing to extend it seems entirely out of the question.

But this version of events is built on the assumption that everyone has access to a contactless card. That simply isn't true in a country where around 1m people don't have a bank account, and where not all “basic” account providers are willing to issue contactless cards. A top-up smartcard is available to everyone; and there's none of that occasional faffing around with PIN numbers, either.

There’s another huge benefit to Japan's IC cards: they're all compatible with each other. There are a bewildering array of cards (the area around Fukuoka alone has three), yet since 2013 you can use one of 10 in different locations around the country.

There isn't 100 per cent coverage – but still, imagine stepping onto a bus in Edinburgh or Manchester and being able to pay with your Oyster card. Or onto a bus in London and being able to pay with your Transport for Edinburgh “citysmart” card. Or – and here's the dream – onto a bus in Germany or New York and just swipe with whatever you already have in your pocket. To illustrate quite how far away that dream is, this week we all got excited when it was announced Oyster will soon be accepted on the Gatwick Express. FFS.

There's an argument that we already have a system for international payments, and it's Apple Pay. But there's a high entry barrier: an iPhone 6, and I'm not made of money. If only we'd followed the Japanese and invented Oyster before debit cards.

Rachel Holdsworth is a senior editor at Londonist. She tweets as @rmholdsworth.

 
 
 
 

Seven climate change myths put about by big oil companies

Oil is good for you! Image: Getty.

Since the start of this year, major players within the fossil fuel industry – “big oil” – have made some big announcements regarding climate change. BP revealed plans to reduce its greenhouse gas emissions by acquiring additional renewable energy companies. Royal Dutch Shell defended its $1-$2bn green energy annual budget. Even ExxonMobil, until recently relatively dismissive of the basic science behind climate change, included a section dedicated to reducing emissions in its yearly outlook for energy report.

But this idea of a “green” oil company producing “clean” fossil fuels is one that I would call a dangerous myth. Such myths obscure the irreconcilability between burning fossil fuels and environmental protection – yet they continue to be perpetuated to the detriment of our planet.

Myth 1: Climate change can be solved with the same thinking that created it

Measures put in place now to address climate change must be sustainable in the long run. A hasty, sticking plaster approach based on quick fixes and repurposed ideas will not suffice.

Yet this is precisely what some fossil fuel companies intend to do. To address climate change, major oil and gas companies are mostly doing what they have historically excelled at – more technology, more efficiency, and producing more fossil fuels.

But like the irresponsible gambler that cannot stop doubling down during a losing streak, the industry’s bet on more, more, more only means more ecological destruction. Irrespective of how efficient fossil fuel production becomes, that the industry’s core product can be 100 per cent environmentally sustainable is an illusion.

A potential glimmer of hope is carbon capture and storage (CCS), a process that sucks carbon out of the air and sends it back underground. But despite being praised by big oil as a silver bullet solution for climate change, CCS is yet another sticking plaster approach. Even CCS advocates suggest that it cannot currently be employed on a global, mass scale.

Myth 2: Climate change won’t spell the end of the fossil fuel industry

According to a recent report, climate change is one factor among several that has resulted in the end of big oil’s golden years – a time when oil was plenty, money quick, and the men at the top celebrated as cowboy capitalists.

Now, to ensure we do not surpass the dangerous 2°C threshold, we must realise that there is simply no place for “producers” of fossil fuels. After all, as scientists, financial experts, and activists have warned, if we want to avoid dangerous climate change, the proven reserves of the world’s biggest fossil fuel companies cannot be consumed.

Myth 3: Renewables investment means oil companies are seriously tackling climate change

Compared to overall capital expenditures, oil companies renewables’ investment is a miniscule drop in the barrel. Even then, as companies such as BP have demonstrated before, they will divest from renewables as soon as market conditions change.

Big oil companies’ green investments only produce tiny reductions in their overall greenhouse gas emissions. BP calls these effects “real sustainable reductions” – but they accounted for only 0.3 per cent of their total emissions reductions in 2016, 0.1 per cent in 2015, 0.1 per cent in 2014, and so on.


Myth 4: Hard climate regulation is not an option

One of the oil industry’s biggest fears regarding climate change is regulation. It is of such importance that BP recently hinted at big oil’s exodus from the EU if climate regulation took effect. Let’s be clear, we are talking about “command-and-control” regulation here, such as pollution limits, and not business-friendly tools such as carbon pricing or market-based quota systems.

There are many commercial reasons why the fossil fuel industry would prefer the latter over the former. Notably, regulation may result in a direct impact on the bottom line of fossil fuel companies given incurred costs. But climate regulation is – in combination with market-based mechanisms – required to address climate change. This is a widely accepted proposition advocated by mainstream economists, NGOs and most governments.

Myth 5: Without cheap fossil fuels, the developing world will stop

Total’s ex-CEO, the late Christoph de Margerie, once remarked: “Without access to energy, there is no development.” Although this is probably true, that this energy must come from fossil fuels is not. Consider, for example, how for 300 days last year Costa Rica relied entirely on renewable energy for its electricity needs. Even China, the world’s biggest polluter, is simultaneously the biggest investor in domestic renewables projects.

As the World Bank has highlighted, in contrast to big oil’s claims about producing more fossil fuels to end poverty, the sad truth is that by burning even the current fossil fuel stockpile, climate change will place millions of people back into poverty. The UN concurs, signalling that climate change will result in reduced crop yields, more waterborne diseases, higher food prices and greater civil unrest in developing parts of the world.

Myth 6: Big oil must be involved in climate policy-making

Fossil fuel companies insist that their involvement in climate policy-making is necessary, so much so that they have become part of the wallpaper at international environmental conferences. This neglects that fossil fuels are, in fact, a pretty large part of the problem. Big oil attends international environmental conferences for two reasons: lobbying and self-promotion.

Some UN organisations already recognise the risk of corporations hijacking the policy-making process. The World Health Organisation, for instance, forbids the tobacco industry from attending its conferences. The UN’s climate change arm, the UNFCCC, should take note.

Myth 7: Nature can and must be “tamed” to address climate change

If you mess with mother nature, she bites back. As scientists reiterate, natural systems are complex, unpredictable, and even hostile when disrupted.

Climate change is a prime example. Small changes in the chemical makeup of the atmosphere may have drastic implications for Earth’s inhabitants.

The ConversationFossil fuel companies reject that natural systems are fragile – as evidenced by their expansive operations in ecologically vulnerable areas such as the Arctic. The “wild” aspect of nature is considered something to be controlled and dominated. This myth merely serves as a way to boost egos. As independent scientist James Lovelock wrote, “The idea that humans are yet intelligent enough to serve as stewards of the Earth is among the most hubristic ever.”

George Ferns, Lecturer in Management, Employment and Organisation, Cardiff University.

This article was originally published on The Conversation. Read the original article.