Apple Pay WAON and nanaco e-Money cards launch in Japan

First announced as ‘coming later this year’ in August, Apple Pay WAON and Apple Pay nanaco launched today October 21 JST. The popular prepaid e-Money cards are two of the last big three holdouts that have been on Osaifu Keitai mobile phones for some time: 2005 for Edy (now Rakuten Edy), 2007 for WAON, 2011 for nanaco. Google Pay support for all three was added in 2018.

Basic features
Apple Pay WAON and nanaco require iPhone 8 or later running iOS 15, Apple Watch 3 or later running watchOS 8 and Apple ID set up for two-factor authentication. The cards are similar to rechargeable Suica and PASMO however there is one important difference: they do not support Express Mode and require Face • Touch ID when making payments.

Earlier this year I predicted these cards would be added with apps, not directly in Wallet but was only half right. AEON and nanaco released apps today for adding / transferring WAON and nanaco to iOS 15 Wallet that require account registration. However: WAON supports direct Wallet adding without an app, both WAON and nanaco support plastic card transfers directly in Wallet. It’s the same process as transferring Suica and PASMO cards: enter the last 4 digits of the card and birthdate then read the card.

This is big and also an Apple Pay exclusive as plastic transfers are not supported on Osaifu Keitai • Google Pay. Once a physical card has been transferred it cannot be used, just like Suica and PASMO. Mobile card migration from Android devices is also possible via the apps. Card creation is ‘free’ compared to the ¥300 deposit for plastic cards bought at stores but plastic card transfers to Wallet do not refund the deposit, unlike Suica and PASMO which refund the plastic card deposit automatically to the balance.

Remote WAON recharge with Apple Watch Family Sharing
Even so, plastic card transfer is a very important point for younger users (Apple Pay in Japan can be used ages 13 and above) to load cards into iPhone and recharge with cash instead of credit cards. There is a unique feature of Apple Pay WAON when used with Apple Watch Family Sharing: remote recharge. This was demonstrated at the Apple Pay WAON launch media event and appears to be very similar to Apple Pay Family Sharing via Apple Cash using Messages. This is a first and unique to Apple Pay WAON. I’ve pointed out that Suica would greatly benefit from just such a feature.

Users outside of Japan report they can add WAON directly in iOS 15 Wallet with foreign issue credit/debit cards. Overall I’d say WAON delivers a full set of user friendly forward looking features (direct Wallet add, remote recharge) on Apple Pay while nanaco is conservative, lacks focus and vision.

What took so long?
One reason it has taken so long for WAON and nanaco to join Apple Pay despite the ability to do so since the introduction of FeliCa capable iPhone 7 in 2016, is the account creation process for mobile. Unlike their anonymous plastic siblings that anybody can buy at convenience stores, mobile WAON and mobile nanaco on Android require a cumbersome registration process for adding these cards in Google Pay Wallet. This is something Apple didn’t want to do. I’m sure Apple had to do a lot of negotiating with AEON and Seven & i Holdings to get them on board with the plan but the benefits are obvious: user privacy when adding WAON, and the huge number of plastic WAON and nanaco cards out there. Those cards finally have a migration path to mobile and it is iPhone.

But why now? The Japanese mobile payments market has been on a migratory path since the release of Apple Pay in 2016 which pulled all the various FeliCa payment threads into one slick and convenient service. This development, plus the VISA JP/SMBC feud with NTT Docomo, created an opening for code payment platforms wannabes with every tom, dick, yoko and harry creating their own ‘〇〇 Pay’ service and app.

Seven & i Holdings crashed and burned with their 7Pay disaster, meanwhile AEON launched AEON Pay code payments in August with the iAEON app that follows the Toyota Wallet model. That model is what every Japanese payment player is aiming for: a virtual financial service account with multiple payment options: NFC payment cards, code payments, reward points and so on, that lock users to their economic zone of choice (Rakuten Point, NTT docomo dPoint, SoftBank PayPay, WAON Point, etc.)

So the old reliable plastic e-Money cards are being repositioned as one payment option of many in sleek modern digital swiss army payment apps. To make this strategy work, the cards needed to be on Apple Pay. Unfortunately the very long delay getting WAON and nanaco on Apple Pay means they are less important now than if they had launched back in 2016 along with Suica. People always lay any delay blame on Apple and transaction fees, but my take is the account sign-up for mobile part and user privacy was the major sticking point. On the nanaco side, the 7pay code payment fiasco was also a major distraction as they planned to ditch the JCB managed nanaco card for their in-house QR.

As always it will be interesting to see how the situation evolves. One thing for sure, it’s only a question of time before the last holdout Rakuten Edy comes to Apple Pay…’if’ is no longer an option.

Apple Pay WAON / nanaco gallery

A iPhone X NFC failure story, for the user and for Apple

The iPhone X NFC problem will continue to be a problem as long as there are iPhone X users out there. The daily number of hits to those relevant posts tells me so. I ran across a Japanese iPhone X failure tweet a while back. Suica stopped working with a Wallet error: the maximum number of Apple Pay cards (zero) has been reached. Other iPhone X NFC failures report a similar error. I retweeted it hoping all worked out for the best. Unfortunately like all things related to the iPhone X NFC problem, it did not. The user gave me an update:

Thanks. I consulted Apple in May. They immediately did a remote diagnosis and told me it was an NFC failure and the repair would be a replacement ¥70,980. I gave them the information on @Kanjo’s page and twitter, and asked if Apple already knew about this problem.

However, “Your iPhone has already been determined to be faulty, so this we cannot help you. You may want to consult an authorized repair shop or Apple store.” 😢


One of the weird aspects of the saga is that I’m almost certain it was an Apple employee who emailed and suggested that I gather and compare iPhone X manufacturing dates to find the cause. That and the internal Apple Support doc says all that you need to know: Apple knew iPhone X NFC was defective but chose to ignore the problem and ride it out.

Apple chose this path of inaction because: (1) it was only a problem in Japan as Japan was the only country with Apple Pay Express Transit at the time, (2) Apple considered the Japanese market expendable enough to hang out and dry because Japanese customers don’t complain loudly like American and European customers or at least enough to cross the language barrier (so convenient that), (3) the IT tech press wasn’t competent enough to catch and report the issue.

One thing is certain, no way could Apple get away with ignoring such a problem today. It’s a crime that iPhone X users never got the Apple repair program they deserved.

My Cousin Apple Pay

So the EU is going ahead with ‘open NFC’ antitrust charges against Apple. As posted back in August 2020, the whole open vs closed debate is not easy to define. It’s probably easier to look at it from the simplistic App Store debate of letting developers bypass Apple’s in-app payment mechanism to avoid paying the ‘Apple Tax’, because that’s the box most people will understand.

We’ve already seen banks and Apple chafing over transactions fees on multiple occasions, the latest being ‘Banks Pressuring Visa to Cut Back on Apple Pay Fees‘ because Apple dared release their own credit card under the Mastercard brand via Goldman Sachs. German banks and Australian banks in particular demand the right to use iPhone NFC in their own payment apps instead of Wallet so they can harvest the user data they can’t get via Apple Pay and drop Apple Pay support all together in favor of their own proprietary payment apps (our exclusive card comes with our exclusive app). But there’s an aspect of the ‘open’ argument that will not be discussed by EU regulators, the banks and credit card companies.

I’ve been watching ‘My Cousin Vinny’ a lot recently. I love the courtroom scenes with Joe Pesci’s Vinny character turning the prosecution arguments upside down. There’s a key scene early on when Vinny uses a pack of cards to convince Ralph Macchio’s character to give Vinny a chance to defend him: ‘the prosecutors are gonna show you bricks with solid straight sides and corners, but they’re going to show them in a very special way’ so that judge and jury see bricks instead of playing cards, which is what ‘open NFC’ arguments are: paper card illusions.

NFC is just hardware, it’s worthless without the software protocols that drive it. NFC also has different definitions. The bank industry defines NFC as NFC A-B ISO/IEC 14443. The NFC Forum defines NFC as NFC A-B-F for device certification. On the protocol side the bank industry defines NFC as EMV because this is their industry standard created and managed by EMVCo (Europay-Mastercard-VISA initially, now collectively owned by American Express, Discover, JCB, Mastercard, UnionPay and Visa).

Are EU regulators going to argue that ‘open NFC’ is defined as NFC A-B-F on the hardware side and EMV, MIFARE, FeliCa protocols on the software side? Of course not. They will narrowly define their Vinny brick as NFC A-B and EMV, and maybe Calypso as the transit protocol is used in France for transit. Why would they do that?

It’s very simple. European banking interests don’t want to pay transaction fees to Apple, the Apple Pay tax. They want to cut out the middle man with their own exclusive apps and harvest user data. They don’t want inconvenient questions such as why there are all those different NFC standards and protocols out there, how this came to be and what really constitutes ‘open’. Why did the ISO/IEC Joint Technical Committee choose Phillips NFC-A and Motorola NFC-B while shutting out Sony NFC-F? Was that part of creating an ‘open’ and level NFC playing field on the global marketplace? Of course not, it was about playing favorites while shutting Sony and Japan out of the game. Now they want to do the same to Apple Pay. I still think Junya Suzuki is right: the EU will never demand the same thing of Samsung Pay or Huawei Pay that they are demanding from Apple.

Sawada Sho tweeted a thoughtful question recently regarding the App Store in-app payment controversy. He pointed out that gaming and other platforms charge developers great deal of money for hardware and software access, nobody questions that. Apple offers a lot of access for a very low price, is it fair to demand free passage on the App Store because it is Apple? Sho san thinks the Apple transaction cut is a fair tradeoff. Some tech writers have occasionally asked the same basic question: what’s fair?

EMV, MIFARE and FeliCa all have licensing and certification fees that all customers (developers) pay. Apple has gone to a lot of expense licensing those technologies in addition to licensing a GlobalPlatfrom Secure Element that they build into their own Apple Silicon. Those costs are recouped by Apple Pay transaction fees and fund future developments like digital keys with UWB, ID and other Wallet goodies we’ll get later on in the iOS 15 cycle.

I guess EU regulators want to give those away free to EU banking interests and let them have their way in the interest of ‘open standards’ that they define and end up protecting the home turf. That sounds like a good deal to me.

OMNY card completes the EMV only OMNY system

After a long gestation, and a COVID related delay, the good old swipe MetroCard replacement has finally shipped. OMNY card: a ‘truth in the cloud’ EMV bank payment card, not a MIFARE or FeliCa ‘truth in the card ‘ smartcard like London Oyster or Tokyo Suica. As OMNY is a new system and MetroCard missed the transit smartcard revolution of the early 2000’s, MTA and ticketing system management company Cubic Transportation Systems decided to go all in with open loop, i.e. using ‘open payment‘ EMV contactless credit/debit cards for transit fare instead of dedicated transit cards. It’s a ‘one size fits all’ approach where bank payments cards are promoted for every kind of purchase.

The OMNY rollout has not been an easy transition for MetroCard users. One problem with the ‘one size fits all’ open loop approach is that different people have different needs: minors, seniors, disabled, daily commuters with set routes, people without bankcards and so on. Open loop cannot handle these well, if it did TfL would have killed Oyster card long ago. Hence OMNY card that appears to be an EMV branded card with CVV security number, possibly issued by a Mastercard issuer, similar to the closed loop Ventra digital card. Unlike Ventra card however, OMNY card is plastic only. It won’t be coming to Apple Pay. That’s the price of OMNY being the first transit ticketing system built completely on EMV. Why so?

As most of the open loop systems in North America, UK and Australia are designed and managed by Cubic it’s helpful to compare their ticketing system profiles.

Oyster: Open loop with Express Transit
Closed loop plastic MIFARE transit card, open loop EMV cards (plastic and digital wallet express transit).

VENTRA: Open loop without Express Transit
Closed loop plastic MIFARE card + EMV digital Ventra (Mastercard), EMV bank payment (plastic and digital wallet w/o express transit)

Opal: Open loop without Express Transit
Closed loop plastic MIFARE cards + EMV digital Opal (Mastercard), open loop EMV bank payment (plastic and digital wallet w/o express transit)

OMNY: Open loop with Express Transit
Closed loop is plastic EMV OMNY card, open loop is EMV bank payment (plastic and digital wallet with express transit)

When you carefully analyze the different systems and Express Transit use one condition becomes clear: transit systems cannot support EMV Express Transit configurations where both closed loop EMV transit cards and open loop EMV bank payment cards are on the same system. It’s a choice between supporting one or the other, not both. I suspect Cubic does this because of EMV limitations and to avoid digital wallet card clash, but to transit users the service inconsistency is simply confusing.

As with the OMNY part 1 open loop rollout, expect the part 2 OMNY card rollout to have teething problems. Judging by the low key launch announcement and social media reactions, I think it will be a slow transition. Also don’t expect the OMNY card on digital situation to change as EMVCo members seem reluctant to change or improve their department store payment technology for better transit use and service.

Apple rebrands Express Transit as Express Mode…forgets to tell iOS 15

When Apple revamped their USA Apple Pay page back in June with the Clipper launch, they rebranded Express Transit as Express Mode on a new and separate Wallet webpage. At the time the branding change seemed trivial but it had bigger implications. After the release of iOS 15 Apple has scrubbed Express Transit references from numerous support pages and replaced it with Express Mode which is now a little *footnote on the Apple Pay Transit page. It used to be a whole ‘Ride transit with Express Transit’ section.

Does the change make it easier to understand the difference between going through a transit gate with Express Mode on, or where it can be used? Not really. In fact you have to read carefully to understand which transit systems have dedicated Apple Pay transit cards and which ones are open loop with Express Mode…or pokey old Face/Touch ID. Maybe that’s the whole point, it’s all just Apple Pay for transit.

As outlined after WWDC, Express Mode is what Apple wants to market because Wallet is not only about transit anymore: “With Express Mode, you can use cards, passes, and keys in the Wallet app with just a tap.” Sounds nice, except one small thing: somebody forgot to tell the iOS 15 UI team. Express Transit Card in Wallet & Apple Pay settings is still the place to turn on Express Mode that it always has been without the new branding. But there is no indication in the UI. And it is still different for keys and passes: tap the card ‘…’ button and then turn Express Mode on or off via a toggle or a menu, depending on the issuer…I guess.

In short Apple refers to Express Mode as a universal thing, but it’s not a universal setting in the iOS 15 UI and missing altogether in Express Transit Card settings…how confusing. Hopefully Apple will clean up the confounding Express Card vs Express Mode UI mess in future iOS 15 updates.

No Express Mode references in iOS 15 Wallet & Apple Pay settings Express Card