>Why not just make an iPhone case that has a carve-out for the payment card?

I too have seen this kind of product in Japan. The downside is that the case gets thick, the design is limited, and it doesn't look cool. As a former user for using Suica app of feature phones, the case product is apparently not optimal.

IMO users who put their phones in their pockets would gain the most benefit (mostly men I think). Women, especially in Japan, generally wear clothes that have no pockets and the phones are inside the handbags, which will have less benefit. It is not much different taking the card case or a phone from your handbag.

I have seen a brand handbag that has an inner pocket in the bottom to hold a Suica card. To use it, you just put the handbag on top of the ticket gate. This kind of product looks more suited to women in Japan.

one thing I've noticed is that Japanese people have no problem with bulky phone cases. I personally hate them, but almost everyone here uses the kind with a flip cover card holder. Also, I saw the handbag you refer to yesterday and thought it was a clever solution.

The advantages of ApplePay are the authentication (security/privacy) and support for AppleWatch.

It's also trivial to cancel your virtual if your phone/watch is stolen, as it's just a unique hash. You can then continue to use your physical card, or re-register it.

This won't use Apple Pay. Also, all of the things you listed seem like a pain just to save $40 worth of transit money.