2022 Japan mobile payments survey results: Mobile Suica tops the bunch

The Japanese contactless payments landscape has changed considerably since the 2016 launch of Apple Pay. It certainly was the Black Ship arrival turning point that Junya Suzuki predicted, contactless payments, especially mobile contactless payments, continue to evolve in fascinating ways.

The latest Mobile Marketing Data Labo (MMD) mobile payments survey ranking for NFC payments had an interesting twist: Mobile Suica was the top NFC payment choice at 22% beating out NTT docomo iD at 21%.

That doesn’t sound like much but this survey is asking specifically about store purchases made with a mobile device, not transit use. Mobile Suica beat iD despite a number of heavy marketed iD related dPoint rebates and bonus point campaigns. What’s even more interesting is that users said they are really interesting using Rakuten Edy, with Mobile Suica running a close 2nd place, and iD way down in 6th place. Why? 2 reasons I think, the convenience of Express Mode for purchasing things on the run keeping face mask in place, and points. Don’t underestimate the last one.

Tossing the local teiki for Mobile Suica
The survey got some notice in the Japanese tech media but nobody analyzed the surprising strength of Mobile Suica despite the ongoing COVID impact on Suica transit use, perhaps it didn’t make sense to them. Mobile Suica topping the ranking doesn’t make sense by itself as suddenly gaining users in the traditional greater Tokyo Suica transit use region…but it does make sense when you add people who don’t need a local region teiki/commuter card for work because of COVID and have switched to Mobile Suica for their occasional transit needs, also using it for purchases. Instead of a plastic ICOCA, Sugoca, manaca, TOICA, etc, those users use Mobile Suica. Not everybody is switching of course, but it does put Mobile Suica use on a larger national footing than ever before, and that adds up. This, I believe, is what the MMD survey ranking is showing.

And there is JRE POINT. JRE POINT only got started when Apple Pay Japan did in 2016, but it didn’t become a serious thing until Suica Point Club was merged into JRE POINT in 2017. It has steadily grown from there and the last missing puzzle piece was added when Eki-Net Point was finally merged into JRE POINT in June 2021. JRE POINT has finally achieved synergy gluing together the far flung JR East online service pieces (Mobile Suica, JRE POINT, Eki-Net) and JR East will be aggressively marketing point campaigns and eTicket discounts that encourage users to go all in with mobile.

The survey also shows at something else: dPoint isn’t very compelling despite all the campaign rebate noise. I’ve heard from iD•dBarai (dPay Code Payments) users, ‘dPoint doesn’t travel well’, the NTT docomo dPoint economic zone lock-in isn’t very compelling from the inside. This is confirmed by MMD’s code payment app satisfaction survey that ranks dBarai at 4th place, far below Rakuten Pay at #1 and PayPay at #2. From my own experience I use dPoint when upgrading to a new iPhone and nothing else. The SoftBank economic zone (Z Holdings et all) was clever in that they made ubiquitous availability and cash rebates, instead of points, the service lock-in.

And then there is Rakuten POINT economic zone. The survey interest ranking is measuring Rakuten POINT interest not Rakuten Edy. The ability to earn and use Rakuten POINT across online shopping, stock trading, travel reservations and more is big. The gist of it all is that Japanese users care more about points than the contactless payment type. Long term I think the most successful payment economic zone players will follow the Toyota Wallet model, a wallet app offering flexible multiple payment options (QR, NFC, etc.). Apple and Rakuten need to hurry up with Apple Pay Edy, the very last eMoney holdout.

UPDATE
Forgot to include the corporate travel angle driving Mobile Suica use.

Help Desk: time to toss the teiki for Mobile Suica?

I’ve abandoned renewing my teiki in favor of just using the suica app on my phone. So much easier, I think it’s worth the money I’m saving by buying a teiki. For some reason though, I’m not getting JRE points when recharging my suica. Any ideas?

Reader question from Fukuoka

In this era of on again, off again COVID infection waves and remote work from home, many people may not need a teiki/commuter pass for the office, even though they still need a transit card for occasional work use. A reader who lives in Fukuoka asked about using Suica in the Fukuoka sugoca/hayakaken/nicoma transit card territory. Is possible for Apple Pay Suica to do the job instead of native area cards?

If you do not need a teiki then absolutely yes, Mobile Suica takes care of your needs. But there are a few gotchas to be aware of. Actually there is only one: points. All of the various transit IC cards are tethered to their respective regions with reward points and company branded credit cards. Each card has a different reward point system, JRE POINT for Suica, JR Kyupo for Sugoca, hayaken point, JR West Point and so on.

If we take the example of using Suica in Fukuoka, there is only one way to earn JRE POINT, Apple Pay Suica recharge with a JR East issue VIEW credit card in Wallet app. And there is only one way to use JRE POINT, Suica recharge with JRE POINT via Suica App. If you can live without points Suica is fine, but if you want to rack up points, this sucks. It comes down to personal choice of using what works best for you, convenience, and/or what gives you the best return.

One thing is clear, the teiki needs to change with the times. If you follow this blog you know I write a lot about Suica 2 in 1 cards that support 2 separate reward point systems and commute passes in one card. Currently these cards are only for JR East region transit affiliates, but the next generation 2 in 1 FeliCa architecture can done anywhere. All the JR Group companies should do this and issue 2 in 1 cards for their respective regions and work with transit affiliates to improve transit IC card compatibility for cross region transit, multiple points, multiple passes, mobile support and so on.

An interesting aspect of Suica 2 in 1 such as the Yamagata cherica card is that commute plans include traditional point to point transit passes and transit zones passes. Japanese transit companies are have to get creative and offer different kinds of passes that appeal to different working styles in the post-COVID era. Tough transit times demand tough transit action. 2 in 1 transit cards that support multiple point rewards and commute passes on mobile is the future for transit IC.

Dealing with a lost Wallet

Yusuke Sakakura writes:

As usual, I tried to get on the train using Apple Pay Suica at the ticket gate, but it didn’t respond at all and I got stuck. At first I thought it was because I was wearing a thick coat, so I held it up again, but there was no response … When I checked the Wallet app, all the credit cards and Suica were gone.

It sounds like he was using Suica on Apple Watch. Sakakura goes on to helpfully explain what can cause this and how to get your Wallet cards back. The most common cause for a lost Wallet is signing out of Apple ID. Another cause is turning off the passcode. As he points out, the notification warning when signing out of Apple ID or turning off the passcode is vague, it doesn’t specially say you are about wipe your credit cards and Suica from iPhone. Some users are not fully aware of the consequences and proceed, only to be rudely surprised when they find Wallet is empty.

In all cases it is easy to restore a lost Wallet. Sign-in to Apple ID, set a passcode, go to Wallet, tap + , tap Previous Card and re-add the listed cards. Suica is easier to re-add as there are no terms and conditions or security code steps involved. As always make sure iPhone has a robust network connection when adding Wallet cards.

Another issue to be aware of with Suica and PASMO is Express Mode deactivation without realizing it. This happens when iPhone Face ID has 5 false reads (easy to do when wearing a face mask), when Apple Watch is off the wrist, or when the iPhone side buttons are inadvertently pressed in a snug fitting pocket (often aggravated by the phone case).

One oddity I have encountered using Apple Pay Suica on Apple Watch is wrist band fit. Apple Pay Suica on Apple Watch works fine at the transit gate under layers of winter cloths but Express Transit is sometimes deactivated with a looser fitting band. I like wearing the braided sports loop but it tends to stretch over time and become loose compared with the snug fitting solo loop. On a recent trip I had to constantly enter the Apple Watch passcode as my winter coat sleeve layers pulled the loose fitting braided sport loop enough to fool wrist detection. From here on I’m sticking with cheaper, more reliable solo loop which never has this problem.

Here are some guides dealing with re-adding Suica and PASMO:

Transfer to a another device
Restore from a lost or wiped device
Safely remove Suica or PASMO

What’s the difference between Apple Pay WAON and Apple Pay nanaco?

I always like Sachiko Watatani’s articles, she always has practical insights other journalists seem to miss. Her quick review of Apple Pay WAON and Apple Pay nanaco is no exception. As a long time user of WAON and nanaco on Osaifu Keitai, both feature phone and Android, the additions of WAON and nanaco to the Apple Pay Japan e-Money lineup completes it enough for her to migrate to iPhone for daily use. On the face of it both cards are almost exactly alike, they work the same and have the same ¥50,000 balance limit. Wanatani san explains the differences.

Transferring a standard rainbow nanaco card and creating a new WAON in Wallet is a breeze. Creating WAON requires adding a minimum balance of ¥1,000, however one of the nice things about doing it with WAON app is you can create a ¥0 balance card, same for nanaco app.

nanaco transfernanaco creationWAON transferWAON creation
Wallet AppYes (standard rainbow cards)NoYes (Blue, GG, YuYu cards)Yes (Blue only)
iOS AppsNoYes (standard rainbow card)NoYes (Blue and custom region cards)

WAON has the most options and no sign-up Wallet creation. A unique WAON app feature is custom region WAON cards, AEON donates part of the transaction purchase to the selected region of the card. There are 159 varieties of custom region WAON. The unique feature of nanaco app is card migration from Android to iPhone. It’s a oneway migration. Watatani san makes the same observation I did yesterday that a nice feature of nanaco card in Wallet is that is displays both balance and points saving users a trip to an outside app.

The big feature for both cards is the Apple Pay recharge backend. VISA brand is the odd man out, again, but mastercard, JCB and American Express credit/debit cards are all good. Users can also set auto-charge options using Seven Card in nanaco app and AEON cards in WAON app. Watatani san is the only review to mention the very unique feature of Apple Pay WAON: parents can setup a WAON card using the Apple Watch family setup option and recharge a child’s WAON card remotely via Messages.

Apple Pay Japan 5 Year Mark: All of This and Nothing

Suica was the centerpiece of the Apple Pay launch in Japan October 25, 2016

October is Apple Pay month in Japan. Today, October 21, we have the Apple Pay WAON and nanaco launch. October 2020 saw the Apple Pay PASMO launch ceremony attended by Apple VIPS. October 2016 was the biggest launch of all. This month marks the 5th anniversary of Apple Pay in Japan that launched with the FeliCa enabled iPhone 7 and the iOS 10.1 update. The initial rush to add Suica to Wallet was so great that it brought down both Apple Pay and Mobile Suica servers for several hours. Junya Suzuki, the best journalist in Japan covering digital wallet payments and technology, predicted that Apple Pay would be the ‘Black Ships‘ inflection point catalyst in Japan that would change everything. He was right. Everything has changed.

I tried to think of something smart and elegant or throw together some market data numbers that explain the transformation Apple Pay facilitated in Japan, but it comes down to this picture, a crazy kaleidoscope of contactless payment choices at the local post office. That’s as mainstream as one can get.

Payment options at the Japanese post office

The post office payments menu doesn’t have an Apple Pay logo but EMV brand cards at the top are Apple Pay, FeliCa cards in the middle are Apple Pay, shitty pain-in-the-neck-launch-an-app code payments at the bottom are not Apple Pay…and yes, you can still pay with cash if you need to. This crazy variety, by western standards, is the reason why Japanese Wallet users are excited about the new 16 card iOS 15 Wallet limit, they want to add more cards and 12 was not nearly enough. We have Apple Pay to thank for this overflow of payment options. Even though Apple Pay logo isn’t anywhere to be seen, Apple Pay is reason why so many contactless payment choices exist and why they are mainstream. This is the Apple Pay Japan transformation.


A timeline of changes and challenges

  • October 2016: Apple Pay launches in Japan with support for Suica (compatible with the Transit IC transit and payment network), iD and QUICPay payment networks (American Express, JCB, Mastercard, VISA).
  • September 2017: Global NFC on iPhone 8, iPhone X, Apple Watch 3 supports dual mode cards and seamless EMV and FeliCa NFC switching. Japanese users can make payments internationally with their Japanese issue cards on EMV payment terminals, and FeliCa payment terminals at home. Mobile PASMO trademark registered.
  • 2018: Carrier code payments services launch as cashless momentum grows, iOS 12 Wallet adds MIFARE support for Student ID, May: NTT docomo dBarai, October: SoftBank PayPay.
  • 2019: Japanese Government Cashless Consumption Tax Rebate Program
  • October 1, 2019 through June 30, 2020. The aim of the program is to encourage cashless purchases and increase cashless use up to 25% of all purchases by 2025. To do this the program offers up to 5% tax rebates for cashless purchases made at middle~small businesses and also offers merchant subsidies for installing cashless checkout systems. This is a prescient inflection point as COVID proves to be huge catalyst for going cashless, far more than a normal Tokyo Olympics would even have been.
  • 2021: Apple Pay WAON and Apple Pay nanaco eMoney cards launch, VISA Japan adds Apple Pay in-app purchase support and NFC dual mode switching. This completes the Apple Pay lineup. The Tokyo Olympics didn’t turn out to the big crowd contactless driver the industry expected. Nevertheless market surveys indicate that cashless payment use in Japan has already passed the 25% target.

Japan was a very unique case, the most unique but don’t make the mistake of dismissing it as an outliner. It was way ahead of the curve with important lessons beyond the tired old meaningless FeliCa vs EMV winner-loser debate. Japan already had the extensive and mature Osaifu Keitai mobile wallet platform that launched in 2004, built on the Sony and NTT docomo created Mobile FeliCa standard, long before EMV grafted NFC on their chip and issued contactless credit cards.

The Apple Pay that launched in 2014 was exclusively EMV as credit cards were the best start point, but Apple was already hard at work adding FeliCa, MIFARE and other NFC based transaction protocols as standard in the secure element hosted on Apple Silicon. The result was first seen in 2016 iPhone 7 and Apple Watch 2 in Japan, with Apple Pay Suica, Express Transit and direct Wallet transit card adding as the centerpiece launch strategy, all firsts.

This was an extremely shrewd move. The Japanese public was well versed using Suica for transit and quick purchases. The impact of choosing the Tokyo area based Suica as the start point, coupled with the convenience of anywhere, anytime Apple Pay recharge, supercharged Suica and Apple Pay. They both grew quickly.

JR East factsheet: Apple Pay supercharged Suica growth

The full Apple Pay vision came into focus with the 2017 release of iPhone 8, iPhone X and Apple Watch 3, these were the first global NFC devices that worked everywhere. This was a complete break with the Android model of only selling FeliCa capable devices in Japan or Hong Kong. This is why any iPhone from anywhere can add and use a Suica transit card and Android devices cannot.

The most useful marketing survey covering Apple Pay use in Japan was a November 2018 survey and article from Japanese IT journalist Sachiko Watatani. At the time she found the following:

  • 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

The middle 50 is the most interesting aspect, there has certainly been migration to the Apple Pay use bracket since COVID hit. Other interesting data points: 34.4% use Apple Pay daily, 24.9% use Apple Pay every 2~3 days, 37% use it for public transportation, 69% use it for convenience store purchases. This last one is the classic Apple Pay Suica (and now also PASMO) sweet spot: quick small on the go purchases without Face • Touch ID, courtesy of Express Mode. With COVID and Face ID with face masks, that sweet spot is sweeter than ever.

The secret of success and important lesson
That is all well and good, but how did Apple Pay spearhead this market change? Apple Pay proved to be a great neutral platform for payment players to both play on and play off from. But that’s not all, there is a vital point that most people miss. The secret of Apple Pay Japan’s success was that it shifted the user focus and experience away from the Osaifu Keitai app model where different NFC services are scattered across many different apps, to a simple ‘just add the card’ in Wallet where everything ‘just works’ without apps. Complexity vs simplicity; it was this simplicity that ultimately won out because most users don’t want to deal with setting different services in a bunch of apps. It was this simplicity of the Apple Pay user experience, combined with Global NFC Apple Pay as standard across the board on all devices and price points, that drove the Japanese payments transformation that Osaifu Keitai could not with its complexity and exclusivity that pigeonholed it as a high end option instead of a standard feature.

This is the lesson of Apple Pay in Japan that other markets would do well to study. Lots of different apps offering NFC services doesn’t drive user uptake, centralized simplicity with an easy to use UI drives user interest and use, ‘it just works’ standardization. It is this centralized simplicity that is driving user interest in iOS 15.1 Vaccination Certificate Wallet support and driver’s license ID. The EU and Australia are determined to force Apple to make iPhone NFC ‘open‘ and move everything to the app centric model. If their intention is to drive user uptake, the Japanese market experience proves otherwise. Good luck with that. To most westerners the value of the Japanese mobile payments experience will remain utterly lost, like that old Psychedelic Furs song whine line, “You didn’t leave me anything that I could understand.”

The Crowd Cast cashless map illustrates the rich variety of Japanese payment platforms, some code payments players like ORIGAMI no longer exist

Looking ahead
Where does Apple Pay Japan go from here? Rakuten Edy, the very last holdout, will certainly join the lineup soon enough. iOS 15 Wallet has shifted the focus from payments to keys and ID. Expect to see to some digital key action later this year. On the ID side the Japanese Ministry of Internal Affairs and Communications (MIC) has said they are in discussions with Apple to bring the digital My Number (Japanese Individual Number) Card to Wallet, hopefully soon after it launches on Osaifu Keitai in March~April 2022.

The value of having a digital My Number ID in Wallet is that regions want to promote special services and discounts tied to a resident address. That way local governments can promote differently tailored discounts and campaigns for locals and visitors. JR East for example, is planning to use My Number Card for MaaS transit discounts that promote regional economies. When a payment is made with Suica, the appropriate discount kicks in with the My Number Card verification. The My Number Card + digital payments concept is similar to the 2019~2020 Japanese Government Cashless Consumption Tax Rebate Program. The promise of getting local area based discounts for using transit or buying stuff with Apple Pay is one of the most practical use case scenarios for digital My Number Card that I can think of.

Farther out we might see development of ‘Touchless’ transit gates that incorporate Ultra Wideband technology which is already being used in iOS 15 Wallet for Touchless car keys. It would be cool to simply walk through the gate iPhone in pocket, with Suica taking care of business. I was recently reminded that UWB enhanced gates would greatly benefit those with disabilities. I saw young man in an electric wheelchair going through a JR East station manned gate, the station attendant was holding the reader out for him to tap but his movement was limited. It was difficult for him to hold his iPhone to the Suica reader. A UWB gate would let him zip through unattended at any touchless gate, that’s what barrier free should be about. When you think about it, QR Code apps for transit are just cruel for handicapped users.

Next generation JR East transit gates are wheelchair friendly but UWB touchless gates are the best ‘barrier free’ solution for users with limited mobility.

On that note…despite all the hand wringing over the rise of code payment apps, even as Apple is flirting about adding code payments to Apple Pay, Japan will continue to be a fascinating place to observe contactless payment trends before they appear in other markets. And even though Apple Pay Japan has lost the cool factor that peaked in 2018 and become mundane, that’s okay. Apple Pay in Japan will continue to be the payment service where you can do things that you cannot do with Apple Pay in any other market. That sounds like fun to me and I look forward to the next 5 years of Apple Pay Japan and hope to write about digital wallet developments…occasionally. Since COVID hit blog traffic has collapsed to the point where I think it might be time to change gears. We shall see.

Until next time stay safe and have a good cashless…er you know what I mean.


Apple Pay Japan Comments
Some reader and net comments about using Apple Pay Japan through the years. Tweet or email if you have any experiences you’d like to share and I’ll add them here.

Apple Pay Suica is so convenient it made me wear my watch on my right wrist

The last 2 times I was in Japan, I used Apple Pay with Suica. It is miles ahead of what we have in Singapore, in terms of speed, feel, and experience. And best of all, no app download required!

I changed from Android back to iOS in 2017 mostly due to being able to use Mobile Suica…And this is the real reason I still have to educate people coming to Japan about mobile Suica and putting a debit card into ApplePay and never need an ATM for most things here…Also stop with “Japan is a cash driven society” tropes. I go for weeks not using bills and coins here.

Comment regarding code payment apps vs NFC: Imo Apple and Google Pay are all a payment system needs: it’s quick, easy, and doesn’t require looking like a clown trying to scan a code…Imagine having to scan a code to pay for Suica, it would be a nightmare.

I have no idea why Apple Pay isn’t more widely supported over here. I usually just try and use Suica on my Apple Watch for most things.

The true value (of Apple Watch) is in Apple Pay and Express Transit card. If your city support it especially the latter, it’s a tremendous value.

Truth to be told, I’ve been a user of Japan’s Apple Pay almost since it came out, even thought I don’t live there haha. As a Software Engineer I always was amazed how Japan had a contactless system that you can use seamlessly on transport or store purchases.

It might sound trite, but I am still happy and amazed every time I use Suica on my iPhone. It has been a long road from Edy and Mobile Suica to this point. The next thing for me would be export of my spending for tracking. Not through Suica, but from iOS. And I really wish more Japanese businesses used the Apple Wallet for (reward) cards. When it first debuted I imagined finally getting rid of all my store cards, but it never happened.

When I was in Japan in November, when I looked up my destination via Apple Maps, I got seamless linked to buy a SUICA for my Apple Wallet direct from my credit card. It was pretty slick – 10 second transaction and I had a SUICA in my Apple Wallet.

The best way to use Suica Card on Android devices is to simply buy a new iPhone…

Suica on Watch is just superb. Even better when worn on right hand.

Two great things about my iPhone XS when traveling in #japan: first, SUICA public transport card in Apple wallet and you are able to charge them via Apple Pay wherever you are and second the dual SIM feature to get a traveller SIM like #Ubigi into your phone easily.

Twitter question: Japan peeps, what are your fave “cashless” payment apps? What do you consider the most convenient/useful?

Twitter answer: Suica wallet. Everything else is fucking shit

I want more reward point card support in Wallet that’s easier to use than it is now and supports movie tickets too.

One more for the road: Ken Bolido’s wonderfully informative Apple Pay Japan intro video from 2019