iOS 11 Apple Pay NFC Switching in Action

It’s interesting being back in America, somehow I envisioned Apple Pay availability being the same as it is in Tokyo. It’s not, at least not in Salt Lake City. The payment terminal infrastructure is pretty creaky too. Those fancy Flight Holdings Incredist payment terminals would be a welcome sight.

It is fun using the iOS 11 Apple Pay NFC switching feature. My Docomo dCARD/Mastercard ‘just works’ for Apple Pay everywhere. How boring, as it should be. It would be nice if it worked that way for everybody everywhere too.

Docomo dCARD Mastercard is Global NFC

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MIA Google Pay Suica

Google Pay Suica.png

The Android Police “Google Pay v1.57 prepares support for Suica” news didn’t generate much interest in Japan. Osaifu-Keitai e-wallet service has been around since 2004 on NTT Docomo phones. All 3 major Japanese carriers have offered Osaifu-Keitai and Mobile Suica on carrier branded Android phones since 2011.

As the Japanese Tweet points out, installing Google Pay v1.57 doesn’t enable Mobile Suica in Google Pay, just the same EDY and nanaco cards that Android Pay had.

Google Pay JP
It’s weird that Google Pay JP uses the EMV contactless acceptance mark instead of the FeliCa one. Is this stealth marketing?

Why doesn’t Google Pay v1.57 support Suica out of the box? It’s complicated because Android FeliCa support is just one part of the complex Android hardware jungle. A quick review of Mobile FeliCa support basics is helpful. Most of what follows is compiled from Reddit user FeliCa Dude’s posts, his comment posts are the best Mobile FeliCa English language information source on the web. Abide in the Dude!

Certification
NFC-A and NFC-F support is required for NFC Forum certification for a device. NFC means NFC-A + NFC-F. NFC-B is optional. Apple uses NXP chipsets that support NFC A-B-F

Three ways to do FeliCa
FeliCa Level 1: Basic read and write, no secure element support. All phones with NFC certification implement this.

FeliCa Level 2: The above, plus support for a FeliCa-enabled SIM that embeds a secure element to handle mutual authentication. This is what is used in Hong Kong for Octopus Mobile. A similar NFC-SIM approach is used by EZ-Link which used to be FeliCa but migrated to CEPAS (NFC B) technology in 2009.

FeliCa Level 3: Osaifu-Keitai/Mobile FeliCa. This requires an embedded secure element in the phone itself (Mobile FeliCa), with specific per-device keys issued by FeliCa Networks. Using the Osaifu-Keitai system also requires payments to NTT Docomo who co-developed the Mobile FeliCa software stack with Sony.

Three ways to embed a FeliCa secure element in a device are:

  • A “Mobile FeliCa” IC from FeliCa Networks.
  • A “Mobile FeliCa” SWP SIM card with applet from FeliCa Networks
  • A custom vendor-specific implementation approved by FeliCa Networks (Apple Pay, Smart Octopus for Samsung Pay)

As far as I know, Apple is the only smart device maker that has licensed the entire FeliCa technology stack and ships it on every iPhone 8/X and Apple Watch 3 sold worldwide. Any user with those devices can add Apple Pay Suica and more right out of the box, a testament to Apple owning both hardware and software. Other smartphone makers choose to ship fully enabled Mobile FeliCa carrier locked models only in specific markets like Japan or Hong Kong, similar to what Apple did with iPhone 7 and Apple Watch 2.

You would think that Google’s Pixel 2 would be Global NFC ready but Google’s FeliCa HCE-F API  for Android Pay is severely limited and does not support most FeliCa payment systems. The Pixel 2 does not have a FeliCa compatible embedded secure element and Google crippled NFC-SWP on the device for some reason ruling out a ‘FeliCa SIM’ approach. My money says Google did this to keep Japanese carriers happy selling full bore carrier locked Osaifu-Keitai e-wallet Android phones from Sony, Samsung, HTC, etc. Pure market politics.

Android Pay in Japan was basically a thin wrapper over the existing Osaifu-Keitai stack, a marketing trick that confused Android users into thinking they could install Android Pay on a ‘global’ Android device and get the full suite of FeliCa services: QUICPay, iD, Mobile Suica, and all. This was not the reality.

Android Pay in Japan was limited and so far it looks the same for Google Pay in Japan too. If and when Google Pay Suica arrives it will likely be on Osaifu-Keitai /Mobile FeliCa enabled Android devices from Japanese carriers. Global FeliCa iPhone-like out-of-the-box Mobile Suica on ‘global FeliCa’ Android devices from anywhere looks to be a long way off.

VISA Japan Shoots Itself in the Foot Refusing Apple Pay

What a difference a year of Apple Pay Japan makes.

I went to the local Docomo shop yesterday to help a friend move his au iPhone 6 to a Docomo iPhone 7. It took about an hour because he had to download au points to his au Wallet Prepaid card before switching the phone number to the Docomo SIM but all in all it was a smooth process.

The real eye-opener for me was that when he signed up for the Docomo dCard Mastercard appeared to be the only option. 2 years ago VISA and Mastercard dCards existed side by side. Not anymore. Docomo has gone all in with Mastercard branding. VISA is still available if you want it but is ‘not recommended’. The reason is Apple Pay.

It’s very simple. Docomo wants dCard to ‘just work’ on Apple Pay and on Docomo branded Android ‘Osaifu Keitai’ without limits both in Japan and abroad. VISA does not allow this. Mastercard does. I guess VISA thinks Docomo is dispensable even though Docomo pioneered feature phone contactless payments.

JCB has already seen healthy subscriber growth since Apple Pay launched in Japan simply because JCB, along with Mastercard is doing a better job taking care of Japanese customers. Instead of taking care of customers VISA seems more interested in playing market politics to sideline FeliCa payment networks in favor of EMV contactless.

Good luck with that.

Another Contactless Payment System Again

A sharp reader pointed out that in my previous post the PiTaPa NFC reader is a Panasonic JT-R550CR which is Global NFC A-B-F ready and capable of handling everything FeliCa and EMV contactless. The clutter of NFC readers is pointless. Why not consolidate all the payment networks on the JT-R550CR reader?  Would that it were so simple.

Part of the problem is PiTaPa. PiTaPa is IC transit card…sort of. PiTaPa was designed as a postpaid transit card instead of prepaid transit variety that everybody else in Japan uses. The transit portion is compatible with the Japan IC Transit standard so PiTaPa users can use the card for transit everywhere, and vice versa. But the e-money part of PiTaPa is incompatible with all other Japanese transit cards that reside on the black J-Mups reader next to the Panasonic white one.

The PiTaPa region is the Kansai which is the home power base for Sumitomo Mitsui Bank (SMBC) one of the powers behind the PiTaPa launch in 2004. SMBC wanted to sell PiTaPa as a new kind of SMBC credit card which is why PiTaPa applicants are vetted just like credit card users. Anybody can buy a transit card in Japan at the local station ticket machine. Not PiTaPa.

This is one reason that PiTaPa is a pariah with a very small retail footprint. It does not belong to the IC Transit stored value payment network or the FeliCa credit card networks, iD and QUICPay. Some users say, “a PiTaPa acceptance mark is a warning sign, not a welcoming one.” The lesson here is that credit cards suck at being transit cards no matter what BS the credit card companies or banks tell you, but we already knew that.

7-Eleven-Acceptance-Marks.jpg
7 Eleven Acceptance marks do not include PiTaPa

On the payment network side things are getting interesting. CardNet took over J-Mups operations on March 30 and should be rolling out the NFC-Pay support that CardNet announced back in 2015.

  • CardNet/J-Mups: Shops, cafe/restaurant chains
  • JSIC: Small shops, cafes, restaurants
  • C-REX: Japanese Inns and smaller hotels

CardNet and C-REX are shaping up to be the ‘go to’ payment networks for midsize and smaller businesses. Both are neutral and inclusive. Rakuten Pay (Rakuten) and AirPay (Recruit) make similar claims but are really more for businesses that already have close ties with Rakuten or Recruit. Neither or them seem eager to play with Aeon Waon or 7 Eleven Holdings nanaco both of which are popular stored value cards with customers who shop there.

Going back to the original reader question I have no idea why there are separate readers for Edy and Waon when they are clearly listed on the black J-Mups reader. Who knows, maybe the store got a better transaction deal directly from Rakuten and Aeon. Hopefully all this nonsense can be put to rest before the Tokyo Olympics in 2020.

And yes Union Pay QuickPass is finally coming to Japan (courtesy of SMBC) but only at the Matsuzakaya Department Ginza store initially because Chinese with money like to shop there.