The 30% Apple Pay Japan Solution

Japanese IT journalist Sachiko Watatani who writes for MyNavi posted a fascinating 2 part (one and two) iPhone user survey regarding Apple Pay. There are many interesting details but the big summary points are:

  • Only 27% of iPhone users who can use Apple Pay use it
  • 50% don’t use Apple Pay but are interested in using it
  • 22% don’t use Apple Pay and don’t care about using it

Other important data points: 34.4% use Apple Pay daily, 24.9% use Apple Pay every 2~3 days, 37% use it for public transportation, 69% use it for convenience store purchases. Unfortunately the survey questions did not make any distinctions between different card types like Apple Pay Suica which is stored value with Express Card functionality, and regular Apple Pay credit cards. The survey only addressed “Apple Pay” use.

Comparing results with the earlier MMD Labo report is frustrating because the surveys addressed different user sets with different questions. The only thing worth comparing is the “don’t use mobile payments but am interested” category. The MMD figure was 29.9%. The much higher interest in Apple Pay is probably due to Suica and the ubiquity of transit IC payment store options. Other noteworthy comparison tidbits from MMD are mobile payments for transit use @ 63.5% and convenience store purchases @ 59.1%.

Watatani san was confused about the low transit use result and thought it might be due to PASMO commuters answering the survey. I think she is partly right. One of the biggest findings from earlier this year was that Apple Pay Suica use is highly regional because the initial uptake is closely linked to commuter passes. Getting all the transit IC cards and commuter passes on mobile is something that JR East and Sony are already working on.

The good news for Apple is that 50% of Japanese iPhone users who don’t use Apple Pay are interested in using it. The bad news is that Apple has to give them better reasons to use it. A good starting point would be the items I outlined earlier: extend Apple Pay Japan prepaid card support while working to lower merchant side transaction fees, and for goodness sake issue a iPhone X Suica problem repair program.


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SoftBank Outage Outs QR Code Weakness

The December 6 Ericsson induced SoftBank network outage could not have come at a worse time for SoftBank. The outage took down voice, data and SoftBank WiFi hot spots along with the just launched SoftBank/Yahoo Japan QR Code PayPay platform which was already off to a rocky start. Line Pay experienced serious problems as well.

Many SoftBank iPhone users on Twitter assumed Apple Pay Suica wouldn’t work without a network connection and they would be stranded, but this was not the case, Apple Pay works fine without a network connection. As Apple says in Using Suica on iPhone or Apple Watch in Japan:

Your iPhone or Apple Watch must be turned on, but it doesn’t have to be connected to a network. You don’t need to wake or unlock your device or open an app when you enter or exit the ticket gates. You’ll see Done and a checkmark on the display.

A network connection is necessary only when recharging Suica with Apple Pay, but not for an old fashioned cash recharge which can be done at any convenience store checkout, JR station smart charge kiosk or 7-Eleven ATM.

The network outage clearly reaffirmed the strengths of stored value cards like Suica: payment transaction processing is local and works without a network, stored value money and adding cash works anywhere, anytime. The outage also highlighted the perpetual QR Code weak point, they don’t work when networks are down.

There is also an important but overlooked advantage in this age of digital wallets, Suica is also a plastic card, the ultimate portable hardware backup in case of emergency or for elderly people who don’t like using mobile phones for anything other than, you know, talking.

The lack of a physical backup is what ultimately kills QR Codes as the front end transit payment solution. QR Codes will always work best in the role they are suited for: a backup role for adding money to smart cards or one-off ticket/coupons when neither time nor speed is a concern.

The FeliCa Bike

I knew Docomo had a bike sharing service and app but didn’t pay attention until I actually saw one today parked in front of the local Doutor Coffee shop. A quick trip to the service page confirmed that Docomo Bike Share registered members can use Apple Pay Suica or any IC transit card for lending use and as a bike lock.

I don’t plan on using a bike share service anytime soon but an Apple Pay Suica bike lock does sound intriguing.

Huawei hopes to steal Japanese iPhone Market Share with Global FeliCa

Huawei released the Mate 20 Pro in Japan November 30 with a clear goal of offering a lower priced smartphone in the Japanese market where carrier subsidies are going away and iPhone XR sales rumored to be so-so. IT Media Mobile reports that Huawei’s Jeff Wang, regional president for Japan and Korea said that, “long-term the Japanese mobile market is becoming a fair and level one” competitively, with opportunities to offer users “revolutionary products.” The remark clearly alluded to the Japan Fair Trade Commission investigation of Apple iPhone sales strategy in Japan which resulted in the call to end carrier subsidies.

There’s just one catch: only the Docomo Huawei P20 has FeliCa, the Mate 20 Pro does not.

Wang said Huawei recognizes the need for FeliCa in the Japanese market and is working to add global FeliCa to all Huawei smartphone models. If this turns out to be true, Huawei will first smartphone manufacturer to follow Apple’s lead in adding global FeliCa. The sooner global FeliCa becomes a boring standard check box item for smartphone manufacturers everywhere the better.

iPhone Battery Replacement Refugees

MacRumors posted an excellent reminder that the iPhone $29 (¥3,200) battery replacement program ends December 31. If you want to take advantage of lower battery replacement prices for SE, 6, 6 Plus, 6s, 6s Plus, 7, 7 Plus, 8, 8 Plus, and X act now. IT Media News reports that Japanese iPhone users are finding it very difficult to make reservations with ‘battery replacement refugees’ having to extraordinary efforts to get one.

Don’t wait and become a refugee, if you need an iPhone battery replacement start getting one now.