Tokyo Cashless 2020: Blame the Japan Cashless Payments mess on VISA and EMVCo, not FeliCa

1️⃣ Dear JR East, we need a new Suica Charge App
2️⃣ Consumption tax relief with the CASHLESS rebate program
3️⃣ Are Apple Maps and Siri really Apple Pay level ready for the Tokyo Olympics?
4️⃣ > Blame the Japan Cashless Payments mess on VISA and EMVCo, not FeliCa

Tokyo Cashless 2020 is a series covering all things cashless as Japan gears up for the big event. If there is a topic that you’d like covered tweet me @Kanjo


Japanese journalist Akio Iwata just published a piece explaining why VISA has not signed with Apple Pay in Japan. It is paywalled and I have not read it, but Japanese readers noticed similar points in my earlier piece Why Visa refuses to join Apple Pay Japan and tweeted about it. The subject is timely and worth visiting again after the events of the past year.

Some western business journalists and industry pundits look at the Japanese payments market and write about failure: the failure of FeliCa to be universally accepted, the failure of Japanese society to use cashless payments instead of hard cash. It’s a kind of cut and paste narrative construct journalism that you see too much of these days, like the recent Financial Times piece, or worse the NFC TIMES. The narrative is persuasive enough to blind some Japanese journalists as well.

This kind of reporting plays to the expectations of a certain readership, but it completely fails to capture or explain the massive changes happening in Japan right now, set in motion by the arrival of Apple Pay in late 2016. The bulk of the cut and paste argument is that FeliCa failed to take off in Japan and because Japan failed to switch to the EMV ‘world standard’, that’s why we have the current messy situation. End of story. I don’t buy this argument at all.

FeliCa was around long before the EMVCo consortium got it’s NFC act together in the early 2000s. NFC-A is Philips, NFC-B is Motorola, NFC-F is Sony. The ISO/IEC 14443 standard was supposed to include NFC-F but the ISO ultimately decided not to include it. EMVCo created the EMV contactless standard on ISO/IEC 14443 NFC A/B.

With lots of help from JR East, NFC-F was added to the ISO/IEC 10373-6 and GSMA/GCF (Global Certification Forum) TS. 26, TS. 27 specifications. From April 2017 GCF certification for all NFC mobile devices requires NFC-A, NFC-B and NFC-F support.

It is this later development, and especially the fruit of that development, Apple Pay Suica, that I believe is unacceptable to VISA and by extension EMVCo. VISA cooperates with Apple Pay in other countries because it promotes EMV, VISA refuses to cooperate with Apple Pay in Japan because it promotes FeliCa. Instead of promoting bank card use and new services VISA is promoting technology.

I have long suspected that VISA simply does not want anything to do with Apple’s support of the Global NFC standard put in place by the NFC Forum and GSMA/GCF in 2017. It’s not only Apple…VISA refuses to support dual mode (EMV/FeliCa) Docomo iD/NFC for Android Osaifu Keitai users abroad which Mastercard, American Express and JCB do. VISA simply wants to bide time until NFC Pay/EMV contactless support in Japan is everywhere and then simply ignore FeliCa (NFC-F) all together…

Unfortunately this strategy has only accomplished one thing: it provided an opening for QR Code payment system players…

Why Visa refuses to join Apple Pay Japan

My argument is simple. The VISA and EMVCo mindset is stuck in the one size fits all single mode plastic card era. This is easy to understand as the plastic card issuing business is a very lucrative one.

But like all things there is a downside: instead of embracing the full promise of global NFC digital wallets that can match the best NFC technology for the job with multiple mode cards that do everything and ‘just work’ everywhere, we have the contactless payment turf wars which are really just plastic era fighting moved to a digital arena.

Instead of pursuing the advantages of digital wallets that merge the best of native transit cards on the front end with the best of bank cards on the back end, where they perfectly complement each other, we have bank cards fighting to be everything, which they are not and will never be. This is why Apple markets Apple Card as ‘a new kind of credit card, created by Apple, not a bank.’ It’s the reason why Apple Card is Mastercard brand, not VISA.

In Japan specifically we have VISA refusing to join Apple Pay Japan and for the most part Google Pay, and VISA Japan key player Sumitomo Mitsui fighting on and off with Mobile FeliCa key player Docomo. And the result? None of this nonsense helped strengthen VISA Japan’s market position one bit. On the other hand VISA’s arrogance pulled all the other card companies down with it and provided a huge opening for the Japanese QR Code players like PayPay.

When I wrote Why Visa refuses to join Apple Pay Japan the frenzy of Japanese QR Code payments was just getting underway. Over a year later I think this conclusion is stronger than ever and the only one that explains the reality of the current market. VISA may like to think that the Tokyo Olympics is the last great opportunity to finally kill FeliCa. That’s not going to happen.

Only by setting aside the past and embracing the multimode digital future with forward looking cooperation, can VISA (and by extension EMVCo) help bring order to the payments chaos of the Japanese market. Only cooperation can deliver the promise of cashless payments to Japan, and strengthen the long term market opportunities for all players.

Advertisements

JRE POINT Issues Apple Pay Suica Notice

With the JAPAN CASHLESS Rebate program in full swing, many Apple Pay Suica users are suddenly paying attention and signing up to get those post-transaction rebate points. The sleepy JRE POINT site is suddenly a hot bed, and users are advised to steer clear of registering Suica cards during the peak evening hours of 22:00~24:00.

JRE POINT issued a notice today reminding users with plastic Suica cards registered with JRE POINT, that they need to re-register the Suica as Mobile Suica if they transfer it to Apple Pay.

JRE POINT allows multiple Suica cards to be registered, but only a single Mobile Suica card (green) can be registered at any one time, and one Mizuho Suica (blue). Once a Apple Pay Suica/Mobile Suica card is registered however, users don’t need to worry about the Suica ID number changing when migrating to a new device or moving Suica from iPhone to Apple Watch. The number usually doesn’t change but even if it does, the Mobile Suica/JRE POINT system takes care of it.

UPDATE: I forgot to mention that MIZUHO Suica does not count towards the Mobile Suica limit, you can have one Mobile Suica card (green) and one MIZUHO Suica card (blue) both in Wallet, both earning JRE POINT.

macOS Catalina Bootloop Dance

I stupidly forgot to turn off automatic macOS updates on my home iMac. When I got back from a business trip last night I found my partner almost in tears and the iMac endlessly replaying the kernel panic screen after a failed macOS Catalina update.

Safe mode had the same kernel panic so I dropped the iMac into Recovery mode with a Command + R startup, but the weird thing was that once iMac was in Recovery mode Bluetooth stopped working. Magic Keyboard and Magic Mouse 2 weren’t magic anymore but frustratingly useless appendages. The cursor was tantalizingly close to ‘Restore from Time Machine Backup’ but all I could do was look at it.

I wasted hours creating a bootable macOS Catalina install USB stick and testing it, but the same Bluetooth bug happened again and again. Today’s chore is finding a tossed off USB mouse and keyboard to finally get the iMac on the road to recovery.

I checked online and sure enough there were Catalina update bootloop failures with dead Bluetooth complaints on Japanese websites, a few mentions on English language sites too. If this is ever mentioned by Apple I’m sure it will be passed off as, ‘a select few users experienced blah blah issue with blah blah Macs.’

How nice it is to be one the select few.

10/11 UPDATE: Some Catalina upgrade bootloop-ers report restoring the previous system from a Time Machine backup then doing the Catalina upgrade again works. Instead of that I went straight to: boot with macOS Catalina install USB, wipe hard disk, do clean install, restore from Time Machine backup. Wiping the iMac APFS formatted Fusion drive was a little weird, Catalina APFS creates 2 APFS containers: Mac HD (visible) and Mac HD Data (invisible) that had to be deleted separately, then a single new container created (Howard Oakley has a great explanation of macOS Catalina APFS if you are interested). It all worked out but the time investment was high: at least 12 hours down the drain from setup to babysitting the process.

10/17 UPDATE: the macOS Catalina Supplemental Update (what a lame name) is out and supposedly fixes the bootloop issue, which in my case seems related to not enough free disk space.

The JAPAN CASHLESS Rebate Day 6: Rebate Mana

2% and 5% CASHLESS rebates are processed and paid out at the end of each month. So I was a little surprised last night when I opened JRE POINT app, checked the transaction list and found lots of extra points listed as ‘rebate campaign’.

It took me a moment to realize that these were not JAPAN CASHLESS store rebate points but JRE POINT campaign rebate points. JRE POINT is running several point campaigns, the 2% one runs until June 30, while the NewDays Self Checkout one runs until October 30. If you are registered with JRE POINT, use Apple Pay Suica to buy your daily commute drinks at NewDays self checkout this month and rack up the points: the regular 2% + the 3% self checkout. Every other point system is doing the same from PayPay to Rakuten so keep an eye out for all kinds of campaigns.

October 8 Mobile Octopus Service Maintenance Points to Apple Pay Octopus Launch

The Apple Pay Octopus service launch date possibility is centered on a planned October 14 update of the Octopus Cards Limited (OCL) Schedule of Fees and Guid, which makes sense because service fees need to added or updated for Apple Pay.

System maintenance of all mobile related Octopus services took place October 8 3am~6am local Hong Kong time. It was a precise list of services that would need to be offline to add Apple Pay Octopus support. This followed a similar October 3 mobile system maintenance and suggests a ramp up on the backend system.

I hope this is not a false alarm. At the very least I think we could be close to having a launch announcement from OCL by October 14 with a launch shortly after. For comparison the Smart Octopus on Samsung Pay launch announcement was made on a Monday, service started 3 days later.

Given the current situation in Hong Kong however, nothing is certain. Things are not easy for many in Hong Kong right now, but I hope for the best and send my sincere wishes for the safety of all.

10/14 UPDATE: the updated Schedule of Fees and Guidelines has no references to Apple Pay Octopus, nor is there any announcement from OCL. However there is a new reference to ‘wearables’ in the Mobile Device section of the updated Conditions of Issue of Octopus which means Apple Watch. There is no wearable for Octopus at this point, Apple Watch is the only device that fits the reference.

10/16 UPDATE: with no reference to Apple Pay in the updated Schedule of Fees and Guidelines, and only a hint of Apple Watch in the updated Conditions of Issue of Octopus, nor any sign of a launch announcement from OCL, yet another miss.

Given the current difficult situation in Hong Kong and long rocky road of OCL delivering Octopus on Apple Pay, it’s time for me to get out of the Apple Pay Octopus prediction business. It will come when it comes: after the rumored October Apple Event, the iOS 13.2 release, whatever. Until then stay safe and happy transit wherever you may be.