iPhone 8, Apple Pay, FeliCa and the Keynote

With iPhone 8 rumors peaking and the keynote date leaking soon, it’s time to add my two cents. I predict Apple will announce FeliCa support for all iPhone 8 and Apple Watch 3 devices worldwide in the iPhone 8 keynote Apple Pay section. Phil Schiller will probably say something like this:

Last year we announced FeliCa and Apple Pay support for our customers in Japan and the response has been incredible. This year we’re happy to announce FeliCa support in every iPhone 8 worldwide and that Apple Pay in Japan is adding support for other major transportation cards like PASMO and ICOCA in addition to Suica. Now all our customers in Japan and visitors from around the world can use their iPhone 8 for riding public transit all across Japan.

The mention will be brief. There may not even be a slide, but a 15 second mention with a slide would pay huge marketing dividends in Japan and costs nothing.

The reasons for the prediction are simple.

The last item is perfect timing for the iPhone 8 announcement, a great marketing opportunity for Apple in Japan.

Apple Pay Suica Inbound

apple-pay-japan_inline-01It was just a year ago when JR East dropped the Suica bomb at the NFC Forum Japan meeting. In his presentation, JR East IT/Suica Operations Center manager Hajime Yamada explained JR East’s participation in the Public Transportation Workshop (PTW) starting in 2014, and the NFC ‘Harmonization’ effort by PTW participants to roll all NFC flavors, Type A (Philips) Type B (Motorola) and Type F (Sony) into a single seamless world standard for public transportation transit systems and fare payments.

PTW members agreed to align GSMA and NFC Forum specifications with ISO standards for transportation. The result was an update to the ISO/IEC 10373-6 specification, and GSMA/GCF (Global Certification Forum) TS. 26, TS. 27 specifications. The implications are that starting from April 2017, GCF certification for NFC mobile devices requires NFC Type A/B and Type F support.

Seen in this light Apple adding NFC-F support to iPhone 7 and Apple Watch Series 2 in September 2016 was merely a head start over the competition to get GCF NFC certification in place before the new requirement started in April 2017.

The entire JR East presentation with slides was reported in Japanese by IT Journalist Yasuhiro Koyama and is well worth a read if you have the time and ability. It was the starting point for all Japanese press reporting that iPhone 7 would include FeliCa technology, later picked up by Bloomberg. There is also a similar document in English explaining the new GCF certification testing requirements for NFC devices.

Suica for Anybody from Anywhere
With a single seamless NFC standard and certification process in place, JR East roadmap goals are very clear.

  1. Japanese customers with Mobile Suica devices can use their devices for public transportation and transit payments abroad.
  2. Global specification certified NFC devices from abroad, (Inbound) can use Mobile Suica.

So when do ‘inbound’ iPhone 7 users from abroad finally get to add Suica to Apple Pay? After all, every iPhone 7 has the same NFC A/B/F chip right?

JR East says there are still a few kinks to work out: specifically how the NFC side and the fare processing/app/data storage sides communicate with each other. There aren’t agreed upon open standards and every platform has their own solution: Apple Pay (Apple A Series Secure Enclave), Android Pay (HCE-F), Samsung Pay, etc.

With Suica already on Apple Pay and Apple controlling both software and hardware, it is simply a matter of when Apple turns on NFC-F for all iPhone 7 devices everywhere. Apple usually does that when rolling out new devices. Like Japanese IT journalist Nobi, my bet is on the upcoming iPhone 7S/ iPhone Pro announcement.

I suspect another reason that Apple has held off doing so is the Apple Pay Suica exclusivity window. With that exclusivity due to run out in September, I think JR East will open up Mobile Suica to Inbound iPhone 7S users, and probably Android Pay users as well.

It’s going to be fun.

A Few Interesting Facts

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Presentation slide from the NFC Forum Japan meeting, July 2016

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Presentation slide from the NFC Forum Japan meeting, July 2016

  • Japanese station gates are designed to be capable of 60 passengers per minute. To do this the conditions are:
    • Processing time of fare transaction has to be within 200ms
    • RF communication distance has to be within 85mm
  • European station gates are designed to be capable of 30 passengers per minute:
    • The processing time takes 500ms
    • RF communication distance has to be within 20mm

The 85mm RF communication distance is achieved with a 1.1A/m (ampere per meter) in Japan vs. the 2.0 A/m strength of the European gates by using slightly larger antennas.

Japanese IT journalists such as Nobi have written that NFC Type F is the reason behind the fast Suica fare transaction processing. This is implied but not explained in the JR East presentation slides. NFC Type F employs symmetrical communication while Type A/B uses asymmetrical communication which may help explain the faster processing. The RF Wireless World page lists NFC Type F as “the faster form of RFID communication,” in comparison with NFC Type A and NFC Type B.

Obon

 

Traditional Obon decoration at Horinouchi Myohoji temple symbolizes the returning souls of departed ancestors.
Tokyo Obon starts today July 13th and lasts until the 15th. Obon of itself is a time for visiting graves and welcoming ancestors back to the family altar, but the actual temple ceremony commonly held during Obon is Osegaki.

The English Wikipedia entry for Osegaki is much less helpful, and less accurate, than the Japanese language entry. Suffice to say that in this day and age of Japanese Buddhism, Osegaki is simply a way for temple members to offer prayers and offerings to their departed loved ones out of respect and gratitude, and the hope that their souls, and the souls of all beings living and departed, are free from suffering.

 

Apple Pay Japan 8 Months in: Winners and Losers

 

Japanese IT journalist Junya Suzuki continues his excellent coverage of all things contactless and Apple Pay Japan. In his latest piece for Business Insider Japan he looks at the contactless payment market changes and winners 8 months after the Apple Pay Japan launch.

As indicated before, JCB and their QUICPay network are the clear winners. JCB has been the most aggressive supporter of Apple Pay from the start, QUICPay and JCB card brand member growth has been ‘off the chart’ at 25% and 10% YOY respectively. Suzuki san doesn’t mention VISA but I suspect that many former VISA card users like myself, have switched to JCB as Japanese VISA cards do not fully support Apple Pay.

JCB also paved the way for Apple Pay Japan by rolling out QUICPay+ just before Apple Pay launched. QUICPay+ supports debit and prepaid cards in addition to credit cards, and also removed the 20,000 JPY spending cap of QUICPay.

JCB also shared a very interesting data point with Suzuki san, once Japanese users switch from physical cards, three credit cards on average, to Apple Pay they use it a lot: a 60% monthly usage rate which Suzuki san says is very high for the market.

Apple Pay Japan still faces some challenges. Apple needs to add remaining major transit cards and vendors need to add full Apple Pay support (Suica, QUICPay, iD), not just Suica. With the possibility of FeliCa support going worldwide with the next iPhone, the growing impact of Apple Pay Japan should be very interesting.

The Last Showa Store On Shopping Street

The Showa era was officially over when the Showa Emperor passed away in 1989. Current Showa era nostalgia is post-war baby boom Showa running from the early late Fifties to early Eighties. Real Showa era shops are disappearing at an increasingly rapid rate as mom and pop retire and shutter the family store.

One last Showa store still graces the Asagaya Pearl Center Shopping Arcade: Saito Convenience Store. Most days the Saito store is shuttered but when Mr. Saito is in the mood, he opens the store and rolls out an eccentric display of senbei rice crackers and vinyl umbrellas (on rainy days).

The last photo shows Saito Convenience Store in fading Showa glory: stylish multi-color hiragana signage, lonely looking senbei bags on a display cart, vinyl umbrellas and a Honda Super Cub delivery bike parked in front. You can’t get more ‘last Showa standing’ than this. In an era of chain stores sweeping away the last vestiges of mom and pop, I hope Mr. Saito will be around for years to come.

Suica Apple Pay Card Deposit Refunds

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When you purchase a physical Suica card from a JR East station ticket machine, the minimum purchase price is ¥1,000. ¥500 goes to the Suica ‘card deposit’, the remaining ¥500 goes into the Suica card SF (Stored Fare) balance. When you add a physical Suica card into Apple Pay, iPhone 7 reads and transfers the SF balance into Suica Apple Pay, your plastic Suica card is no longer usable.

What happened to the ¥500 Suica card deposit? Thanks to Japanese twitter users we now have an answer: when your Suica Apple Pay balance runs down to zero, JR East automatically refunds your ¥500 physical card deposit, charging your Suica Apple Pay balance. Nice.