Japan is the Contactless Payment Turf War Epicenter

QR Code Nonsense
QR Code vs FeliCa

Japan is known as the perfect guinea pig market. Not too big, not too small, tightly integrated, it’s the best test market that exists. Japanese also love to fill out questionnaires, the only people on planet earth that do.

Japan is also the world’s most interesting contactless payment market. There are the large well established FeliCa payment networks that cater to Japanese customers (QUICPay, iD, Edy, Suica, etc.), there are a number of QR Code payment networks catering to ‘inbound’ Chinese tourists (WeChat Pay, Origami Pay, etc.), and now there is NFC Pay (EMV) that will cater to ‘inbound’ westerners in the lead up to the Tokyo Olympics in 2020.

Rakuten and Mizuho Bank have been promoting QR Code payments for Japanese but Japanese are responding, “what’s the point? QR codes are so 2008.” Twitter user Takumi sums up the Japanese viewpoint nicely:

Demerits of OR Code Payments

  • QR requires a good network connection
  • Slow transaction speed
  • Weak Security and QR Code Chinese payment apps keep transaction records in Mainland China
  • Device needs be on and screen active
  • No ‘on the spot’ refunds

Merits of FeliCa (NFC-F) Payments

  • Works without network connection
  • Very fast transactions
  • High security and transaction records stay in Japan
  • Device can be off (Android only) or screen off (Apple Pay Suica, Mobile Suica Android)
  • On the spot refunds

What’s interesting is that Global FeliCa support in iPhone 8, iPhone X and Apple Watch 3 lets anybody visiting Japan with those devices add Suica to Apple Pay and instantly enjoy the benefits of Japanese FeliCa contactless payments.

Apple Pay in Japan is the only place in the world where you can mix and match FeliCa and EMV payments side by side with the same device. That’s astonishing, and lots of fun.