Apple’s 3rd revolution in Japan: the front line for iOS 11 Apple Pay and global FeliCa

Note: with the Apple keynote, global FeliCa iPhone 8 and iOS 11 Apple Pay, there is lots of information scattered across many posts summarized here along with new analysis. The use of FeliCa refers to the NFC-F part of FeliCa technology except when discussing payment networks.

To understand Apple’s 3rd revolution let’s start at ground zero, the NFC Forum Tokyo meeting in July 2016 where JR East dropped the Suica bomb and explained the NFC normalization effort to make all the different NFC flavors (A-B-F) work as one.

There are two parts:

  • An earlier contactless payment NFC normalization effort which resulted in the current EMV NFC A-B standard
  • A later public transportation NFC normalization effort that resulted in a NFC A-B-F standard that is now a requirement for Global Certification Forum (GCF) certification of global NFC devices

Here is a summary of those efforts. I hope your eyes don’t glaze over.

NFC Normalization image

How many sore butts and bad bento did it take to produce that? The only important thing to remember is that EMV only uses NFC A-B and the requirement for global NFC devices is NFC A-B-F. This is the problem: two different standards for contactless NFC. Do we sit around and wait for EMVCo to re-normalize and add NFC-F?

Apple’s genius solution was ignoring all that and choosing the new GCF NFC standard to launch Apple Pay into the Japan market.

iOS 11 Apple Pay features

iOS 11 Apple Pay Japan Diagram New
iOS 11 and global FeliCa in iPhone 8, iPhone X and Apple Watch Series 3 make Apple Pay much more flexible

iOS 11 Apple Pay combined with global FeliCa in iPhone 8, iPhone X and Apple Watch Series 3 is a very flexible solution with innovative features that pay big dividends not only in Japan but around the world. These include:

  • Visitors to Japan with the new iPhones can easily add FeliCa cards to Apple Pay
  • Other countries can add FeliCa Suica-like services
  • Seamless NFC A-B-F switching allows FeliCa and EMV payment systems to co-exist
  • Dual device account ID for Japanese FeliCa credit cards that allow them to be used with Apple Pay outside of Japan
  • Up to 12 Apple Pay cards can be added to iPhone 8, iPhone X and Apple Watch Series 3

These improvements remove the FeliCa barrier for both inbound visitors and outbound Japanese. It would be great if Apple had on the fly NFC switching for adding a FeliCa ID to Apple Pay credit cards that need one temporarily, but credit card companies, banks and the industry would not allow that: too many processing fee apple carts would be knocked over.

But it is a great start that does not end there because Apple’s real genius stroke is Apple Pay Suica.

Why Suica is the only card that matters
Credit cards are messy. Creating one is complicated, you have to be a certain age, there are pin numbers, security codes, expiration dates and credit ratings to deal with. As easy as Apple Pay makes it, you’re still dragging around the creaky complicated territorial infrastructure mess the banking industry built for credit cards. Debit cards are a little easier but still have the same creaky processing infrastructure.

Apple Pay Suica does away with all of this. Anybody can get one and add one to Apple Pay. It only holds the money that you add to it. You can recharge it on the go, you can recharge it with cash, you can use it without a network connection. You can use it for all public transit in Japan and buy stuff anywhere too.

Suica also solves a big problem for visitors to Japan. There are not many stores in Japan where visitors can use foreign issued Apple Pay credit cards: McDonald’s, Ikea, Tokyo Disney World. It will get better but these things take time.

If you have iPhone 8 this is solved now because you add Suica and charge it with your Apple Pay credit card of choice. Easy. Done. Get on the train and go.

Suica is the secret sauce that makes Apple Pay Japan ‘sticky’. Apple Pay is breaking the Japanese mobile wallet utilization glass barrier that has stubbornly remained at 20% no matter how many mobile wallet capable mobile devices are out there, regardless of platform.

Once users join Apple Pay Suica, credit cards, points and convenience keep them there.

The 3rd Apple Revolution
Apple Pay, lead by Suica is changing the Japanese market. Japanese IT journalist Junya Suzuki wrote a book about Apple Pay when it came to Japan last October. He titled it “Apple Pay: the black ship of payments”. This is a reference to the ‘black ships’ of the Perry Expedition that opened Japan in 1852. Black ships in Japan mean big change.

Suzuki san thinks Apple Pay is the 3rd Apple revolution. The first was iTunes, the second was iPhone. I think he is right. Apple Pay is rapidly changing payments in Japan right before our eyes. It’s going to be very interesting to see how iPhone 8 global FeliCa and iOS 11 Apple Pay will change payments in the rest of the world.

And I thank Junya Suzuki for letting me steal his Japanese title.


Global Apple Pay arrives with iOS 11 Apple Pay NFC switching and iPhone 8

スクリーンショット 2017-09-13 4.44.26In addition to the J/Speedy and Mastercard Contactless announcement from T-Cubic, other Apple Pay benefits for Japanese users were announced by American Express. With iOS 11 Apple Pay AMEX users can now use Apple Pay Japan abroad.

7-Eleven also announced support for J/Speedy cards from JCB. Translation: 7-Eleven is rolling out support for NFC Pay with the new POS system installation starting next month. A lot of Japanese users think VISA will announce official Apple Pay Japan support soon now that NFC Pay is in place.

Apple’s support of global NFC (A-B-F) in iPhone 8, iPhone X and Apple Watch Series 3  with the NFC switching improvements in iOS 11 is a game changer. It makes Apple Pay truly global and removes the FeliCa barrier. Inbound visitors can use Apple Pay Suica, Japanese going abroad can use Apple Pay.

It’s unfortunate that people outside of Japan cannot fully appreciate the fascinating changes Apple is bringing to the contactless payments market with iPhone 8 and iOS 11 Apple Pay.


The big Google BGP leak that brought down Apple Pay Suica and lots more

The big August 25 internet outage in Japan that Google apologized for was always a mystery. Nobody in the media explained what caused it. Yesterday I stumbled on the answer: a massive BGP (Border Gateway Protocal) leak. BGPMon has the full story and concludes:

BGP leaks continue to be a great risk to the Internet’s stability. It’s easy to make configuration mistakes that can lead to incidents like this. In this case it appears a configuration error or software problem in Google’s network led to inadvertently announcing thousands of prefixes to Verizon, who in turn propagated the leak to many of its peers… In this case it appears Verizon had little or no filters, and accepted most if not all BGP announcements from Google which lead to widespread service disruptions.

The leak was an 8 minute ‘oops’ for Google, a 30 minute ‘oh no’ for Verizon and an 8 hour ‘oh shit’ for all of Japan.

It is weird, and scary, that Google and Verizon can quickly halt major and important web services in Japan. But that is the internet and the world we live in now.

Apple Pay Japan adds support for J/Speedy and Mastercard Contactless with NFC Pay…for real


img_0046Update 9/22: The TS Cubic Apple Pay announcement  was originally released September 20 then deleted. It was released again today. This is an edited repost of the original with new NFC Pay details.

Apple Pay added support for two more Japanese credit cards: JCB J/Speedy and Mastercard Contactless. Both are issued under Toyota Finance Corporation’s TS CUBIC Card brand.  J/Speedy and Mastercard Contactless are marketed as credit card brands specifically tailored for NFC and contactless payments. JCB issued a J/Speedy Apple Pay announcement as well.

The TS CUBIC press statement says the cards use the EMV Contactless standard but are also used “as QUICPay” with Apple Pay in Japan and require iOS 11. Japanese IT journalist Junya Suzuki reported via Twitter that J/Speedy and MasterCard Contactless both use NFC A-B not FeliCa. This appears to be a new iOS 11 Apple Pay feature that allows smart NFC A-B-F switching using the unique Apple Pay Japan device account two number scheme. This flexibility is an improvement over iOS 10 and a step towards contactless payments that ‘just work’ everywhere.

apple pay japan new
The new NFC Pay (Contactless EMV) logo is on the far left

iOS 11 and Seamless NFC
This finally solves the mystery of the new Apple Pay Japan page NFC Pay (EMV Contactless) payment system logo that appeared after the iPhone keynote. The marketing angle is that customers can use J/Speedy and Mastercard Contactless cards with Apple Pay in Japan and abroad. The number of Japanese stores supporting NFC Pay is still very small but expected to grow in time to receive the flood of visitors expected for the Tokyo Olympics in 2020.

With iOS 11 Apple Pay improvements and NFC Pay/EMV contactless support, VISA is technically able to fully join the Apple Pay Japan parade. Next up VISA payWave aka Visa Contactless?

Using Apple Pay in Japan requires FeliCa (NFC-F) which is fully supported in iPhone 8, iPhone X and Apple Watch Series 3.

JCB J/Speedy comes to Apple Pay Japan…again

スクリーンショット 2017-09-22 16.34.35Apple Pay J/Speedy has arrived…again. After being announced and quickly pulled by card issuer Toyota Finance Corp’s T-Cubic, Apple Pay J/Speedy has been announced this time by JCB. The press release does not mention any issued cards, simply stating that Apple Pay now supports J/Speedy brand cards. Going by the deleted T-Cubic announcement Mastercard Contactless should be announcing Apple Pay support as well.

J/Speedy and Mastercard Contactless use the new NFC Pay payment network based on EMV Contactless not FeliCa. The marketing angle is that customers can use the cards with Apple Pay in Japan and abroad.  The number of Japanese stores supporting NFC Pay is still very small but expected to grow in time for the Tokyo Olympics in 2020.

iOS 11 is the software requirement on iPhone 7 and Apple Watch Series 2 devices sold in Japan, and all models of iPhone 8, iPhone X and Apple Watch Series 3.