The 1st data point is a survey from Yumenomachi that ranks the different cashless payment methods:
Credit cards: 88.4%
Transit cards: 49.7%
Apple Pay/Google Pay/Osaifu Keitai: 35.4%
Prepaid Reward Cards (nanaco, WAON, Edy): 31.7%
QR Codes (Line Pay, PayPay, etc): 25.6%
The 2nd data point is a survey from One Compath. This survey reports 56% of the respondents as using cashless more than a year ago, with slightly different ranking:
Credit cards: 71.4%
Transit cards: 31.7%
Prepaid Reward Cards (nanaco, WAON, Edy): 53.0%
The 3rd data point from the same One Compath survey is very interesting but not surprising. It ranks prepaid card use separately for transit and reward cards by prefecture. Transit card use for payments in the Kanto Area (Tokyo, Kanagawa, Chiba, Saitama) is 85%, while prepaid reward cards are the overall winner on a national basis. This is because of the reach of AEON supermarkets and convenience stores in rural areas where people don’t use transit cards or the local transit cards do not support purchases. The next generation Super Suica format is aimed specifically at incorporating these small rural area transit cards so they can be used anywhere as Suica.
One take away is that in the Kanto area Suica is easily the most used contactless card at checkout (Suica issuance is twice that of PASMO). Credit cards lead in cashless, but are still mostly swipe or Chip and PIN at checkout. When prepaid cards are totaled together, credit card and prepaid card use is almost equal. The surveys do not look at average purchase amounts for the different cashless methods. I suspect that Suica and other prepaid card use leads for smaller purchases while credit cards are used for larger purchase items.
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
These numbers jive with the 35.4% digital wallet use figure in data point 1. The short summary here is that there is still plenty of opportunity for Apple Pay to grow in the Japanese market, and the Super Suica format in 2021 has the potential to break down the regionality and shake up the market.
Apple Pay Suica performance on watchOS 5.2.1 on Apple Watch Series 4 is great, but not as great as iOS 12.3 on iPhone XS. Because A12 Bionic removes the iOS overhead for Express Cards with power reserve, Apple Pay Suica on iPhone XS/XR feels light and snappy like a plastic Suica card. I can’t wait for Express Cards with power reserve on Apple Watch.
Suica Recharge on Apple Watch sucks and I have discovered how wonderfully useful Suica App really is. I have a Commuter Suica on Apple Watch and a My Suica on iPhone. Both of these can be recharged and managed (with different credit cards attached to each Suica!) in Suica App. It’s super convenient and has opened my eyes to a major Apple Pay Wallet design weakness: iPhone Wallet and Watch App Wallet should just be one thing that manages all of my Wallets cards on both devices in one place. Apple Watch Wallet is great, in a pinch, but it’s a lousy UI experience for managing transit card options and Suica Recharge. Apple Pay transit prepaid card users access those card options far more than credit cards. I added a unified Wallet request for iOS 13 to the Apple Pay WWDC19 wish list.
Suica Reminders for low balance and commuter plan renewals are another Apple Watch weak point. They don’t exist. Suica App to the rescue again with Notification Sounds. The 3 beep Suica low balance reminder (¥1,000 or less) works everywhere and is a life saver. It’s far more attention grabbing than Apple Pay Suica Notification Center reminders on iPhone.
A true story: I was buying lunch at a family owned Daily Yamazaki convenience store. You might know the kind, a Showa style convenience store stocked with Yamazaki breads, homemade sandwiches and bento, usually run by an older couple, a store from a different era that will unfortunately disappear.
I bought a bento and paid with Apple Pay Suica on Apple Watch. The Suica 3 beep low balance reminder sound from the reader caught the attention of the owner who looked to be in his late 70s. “Suica works on that? It’s so small.” I assured him Suica worked on Apple Watch.
He smiled and said, “That’s really convenient. You’ll never lose it or have to find it when it’s on your wrist.”
Go for it Tim! It will undoubtedly help Apple sell more global FeliCa iPhones because Smart Octopus on Apple Pay is a great marketing angle for the iPhone XR/XS models with Express Card power reserve and bulletproofed FeliCa performance. I have yet to experience a single Apple Pay Suica gate error from my iPhone XS with daily use since the launch date.
Update It occurred to me after posting the above that Apple has introduced transit cards and the technology behind them with larger point releases: iOS 10.1 for Suica (FeliCa) and iOS 11.3 for Beijing and Shanghai Transit cards (Apple flavored PBOC 2.0 ED/EP). In this scenario iOS 12.2 is the logical starting point for Smart Octopus on Apple Pay. However, Octopus is FeliCa which has been part of Apple Pay for over 2 years, Apple has ample engineering and testing experience with the technology to add Smart Octopus with a smaller point release, or none at all which was the case with contactless student ID cards.
Update 2 The original source reports pointed to an end of January rollout, now that iOS 12.1.3 is released we will see how it plays out between now and iOS 12.2. Considering the Apple Pay Suica launch meltdown on iOS 10.1 update day, Apple would be wise to launch on a quiet network day as Smart Octopus Apple Pay day 1 user additions will far outstrip any regular credit card Apple Pay rollout, the use profile for prepaid transit cards is very different.
iOS 12/watchOS 5 Suica performance continues to be a very mixed bag for many as Apple closes in on the iOS 12.1.3 update. There are no showstoppers but glitches are constant enough that there’s even an Reddit thread on the subject, a first. Suica performance glitches fall in 4 basic patterns:
Suica Express Card error flicker: occasional error flicker at transit gates with iPhone 7, iPhone 8, iPhone X (Rev. B) and Apple Watch 2~4. This is a completely different issue from the iPhone X NFC hardware defect. There is no workaround and will likely be fixed in an iOS update at some point…we hope.
Dead Suica Notifications/No Suica Balance Update: Suica Notifications stop working and Suica Balance fails to update at transit gates, store readers and Suica recharges. This affects iPhone 7, iPhone 8, iPhone X (Rev. B) and Apple Watch 2~4 but is easy to fix by putting Suica in Service Mode for a few seconds.
Slow or unresponsive Suica Recharge: this is probably more of a backend system issue between Apple Pay iCloud and Mobile Suica than iOS 12 but Apple Pay Suica recharge fails half of the time on the first attempt. This affects all devices and there is no work around except to try again. The Mobile Suica maintenance this month (January 2019) might help.
Express Card power reserve mode kicks in with iOS up and running. This only affects iPhone XS and iPhone XR. Express Card power reserve mode kicks in for some reason when it should not. Suica still works fine but the Apple Pay Suica UI stops working. No notifications, no balance update, nada. Service Mode does not revive Suica notifications but the fix is simple: restart iPhone and all is good.