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.

Suica Apple Pay Card Deposit Refunds


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.


QUICPay+ vs. QUICPay


スクリーンショット 2017-07-05 19.46.05
au Wallet PrePaid on the left limits you to the QUICPay+ network, regular au Wallet Credit Cards on the right can be used on both QUICPay and QUICPay+ networks.
The arrival of au Wallet PrePaid in Apple Pay introduces a small wrinkle in the Apple Pay Japan mix for store purchases. The prepaid card exclusively uses the QUICPay+ network. It is almost the same as the regular QUICPay network but adds support for debit and prepaid cards. It also removes the 20,000 JPY spending cap of QUICPay.

Basically you cannot use au Wallet PrePaid for gas stations, taxis, and Don Quijote. Check the full list on the QUICPay site. Look for stores with the little Q+ mark, which covers most of them.

Apple Pay Japan Adds au Wallet PrePaid Card

au Wallet Prepaidau Wallet PrePaid joined the Apple Pay Japan parade on July 4 with a press release from KDDI, a new page on the au site, and a kickoff campaign offering extra au Wallet and Suica points through the end of August. The Goal website has all the gory glorious point details in Japanese.

au Wallet PrePaid joins Suica as the only other prepaid card on Apple Pay Japan. au Wallet PrePaid can be used for store purchases with QUICPay+ (slightly different than the regular QUICPay flavor), as well as for charging Suica Apple Pay. This is the first prepaid card that JR East has allowed for Suica Apple Pay charging via the Wallet app and could open the way for Line Pay and other popular prepaid cards later.

Prepaid cards are very popular with younger people, especially the under 18 crowd who cannot own credit cards. They are also handy for parents who want to keep an eye on allowances.

au posted a few videos explaining how to add and use au Wallet PrePaid:

Adding directly in iOS Wallet (physical card):

Adding via the au WALLET app (no physical card):

Using au WALLET PrePaid Apple Pay with QUICPay

First Apple Pay Scam in Japan Reported

Sankei Newspaper is reporting the first ever scam involving Apple Pay used to illicitly purchase 981 cartons of cigarettes worth almost 4.5 million JPY, approximately 40,000 USD.

According to Saitama Prefecture police, a group of three Chinese nationals purchased the cigarette cartons using two iPhones over a 10 hour period at a convenience store in Kawaguchi City, Saitama, totaling over 700 transactions between March 26 and 27. The single transaction limit was 20,000 JPY. Massive purchases by visiting Chinese tourists, known as ‘baku-gai’  (explosive buying), has been common and doesn’t raise concerns, though the trend is declining rapidly.

One member of the group was arrested and charged with fraud. Investigators believe the group used stolen credit card credentials and convinced the credit card company to send Apple Pay verification codes to different email addresses claiming the iPhone device owner had changed.

Security experts quoted in the article say that Japanese credit card companies need to be much more stringent authenticating card owners to avoid similar scams in the future.

As with most Japanese police reports details are pretty spare as the investigation is ongoing. It’s not clear from the article how the credit card information was obtained: a case of identity theft or some other means. Fault is clearly with the unnamed credit card company. There is not much Apple can do if credit card companies issue Apple Pay authorization codes without confirming identity.

Update 6/12: The Japan Times ran the story on June 3 from Kyodo New service. The English version is exactly the same as the Sankei Japanese one. It is interesting that the police knew the credit card data had been stolen but the credit card company apparently did not.

JR Central Tips Major Apple Pay Japan Expansion in September

smartEX boardingsmartEX loading

One of the current major limitations of Suica Apple Pay is that it cannot be used for Shinkansen travel on the most popular line: the Tokyo~Osaka Tokaido Shinkansen operated by JR Central.

At the launch of JR East Suica Apple Pay service last October, the company said they would work with other JR group companies for full smartphone compatibility by the summer of 2017. In late February, JR Central and JR West issued a press release outlining the upcoming system compatibility in a new app to be called SmartEX (the right hand column in the screenshot below). The announcement moved the interoperability start date from summer to late September.

smart ex chart.jpg
Detail of JR Central comparison chart of SmartEX and EXPress apps. Currently only the JR Central EX IC card works for direct boarding of the Tokaido  and Sanyo Shinkansen.

I read the perfunctory Japanese press coverage but did not think much until I saw the JR Central SmartEX app video teaser (only viewable on mobile devices). I looked at the comparison chart again and zeroed in on item #3, the ‘big 10’ major transit IC cards that will support direct Shinkansen boarding: PASMO, Kitaca, TOICA, ICOCASUGOCA, manaca, PiTaPa, Hayakaken, Nimoca, and of course Suica.

How it works now
Suica Apple Pay supports direct boarding of JR East Shinkansen trains. To do so you have to purchase a Shinkansen ticket first in the Suica app, then download the ticket (受け取り)  to Suica Apple Pay before going through the ticket gate.

This is how it will work with the SmartEX app too, according to the press release chart and teaser video. Great, but one simple thing: we know Apple does not allow developers direct access to iPhone NFC transaction functions that bypass Apple Pay.

The only way the SmartEX app can support direct Shinkansen boarding with the major transit IC cards on iPhone is if they are supported in Apple Pay. It’s as simple as that.

The second simple thing
The teaser video advertises the simplicity of adding credit cards and transit IC cards to SmartEX, then using the IC card to touch and go through the Shinkansen ticket gate. Could this mean it only works with physical IC cards? No.

The great thing about Suica Apple Pay is that it is just a Suica card. Suica compatibility means exactly that, for physical Suica cards and for Suica Apple Pay.

Why late September?
The SmartEX release change from summer to late September is interesting too. It fits well with a new iPhone announcement window. Phil Schiller mentioned Apple Pay Japan in the iPhone 7 announcement last September.

Will the addition of all the major Japanese transit IC cards in Apple Pay earn a mention this year as well?

A Tip for Fixing Apple Pay Suica Screen Death Syndrome-Update

Black Suica

Six months of Suica Apple Pay has worked great for me but a few Japanese users have recently tweeted that Suica screen notifications sometimes stop working with iOS 10.3.1 and 10.3.2. I encountered the issue recently but the fix is simple.

First of all despite all appearances Suica keeps working just fine for transit and purchases. It’s just that Suica sound and screen notifications stop working. Even worse the Suica balance on the screen does not update after Suica Apple Pay recharging or store purchases. Don’t worry, Suica really is working fine and notifications very easy to fix.

Open Wallet and go to the Suica preferences section that you use to recharge Suica. Scroll down and tap: Turn On Help Mode (ヘルプモードをオンにする).

Suica Help Mode is near the bottom of Suica preferences in the Wallet app.

This brings up TouchID verification to turn on Suica help mode. Do that and the screen confirms that Suica help mode is on. That’s it. After a few seconds Suica Apple Pay notifications will be working fine with the correct balance and all transactions properly displayed.

Suica help mode is a one minute mode designed to help you if Suica is unresponsive and the station gate does not let you through. Help mode forces Suica Apple Pay to soft reset itself and talk with the JR East Mobile Suica server. After turning it on there’s nothing more you need to do, after one minute Suica Apple Pay automatically reverts to normal operating mode.

Hopefully the next iOS update, 10.3.3 will clear up this issue for those few Suica Apple Pay users who have encountered it.

Update 6/9
If you are still encountering the problem, restart your iPhone then put it in Suica Help Mode. That will clear up any remaining problems.