Good news: Japanese consumers are using less cash and more cashless payments. The winners are smartphone contactless apps like Mobile Suica (NFC) and PayPay (QR) which saw use rates grow from 16.4％ to 28.6％ in the August 2019 to January 2020 period. The CASHLESS Rebate program has clearly lifted all cashless methods which it was designed to do. The bad news? We have no idea where the economy is going in the coronavirus crisis with the Tokyo Olympics in the balance.
The growth of smartphone payments makes sense because it’s one the easiest ways for users to enjoy the benefits of the CASHLESS Rebate program with multiple payment choices, and most convenience stores offer an instant 2% rebate for cashless purchases. The next challenge is how cashless payment trends play out after the rebate program ends June 30.
This is an interesting development, Bank of the Ryukyus announced support for Taiwan EasyCard (aka Taiwan’s Suica). The press release is a little vague but says this is a co-venture for Bank of the Ryukyus to build….wait for it…another contactless payment platform for Japan. A separate Nikkei article (Japanese) quotes Bank of Ryukyus as having 7000 stores in Okinawa lined up and ready to go by March with a service launch planned in July. The long term plan is extending EasyCard payments beyond Okinawa to other areas in Japan. There is no mention of transit support.
This will be a boon for inbound visitors from Taiwan, especially Samsung Pay users because it will support EasyCard. Apple Pay and Google Pay support of EasyCard is rumored to be coming…”later” which can mean anything, but all 3 digital wallet platforms support the EasyCard MIFARE format. Now that EasyCard is coming to Japan, I wonder if Suica can go to Taiwan, or how about Octopus support in Japan. This kind of mix and match business opportunity is what global NFC smartphones are all about.
Apple Japan recently tweaked the Apple Pay web page artwork. Instead of 3 iPhone Apple Pay images there are now 4, one of which features the PONTA contactless rewards card. Why would Apple feature it only now when Apple has ignored PONTA since the October 2018 launch? Now we know why: the Apple Pay version of Docomo d POINT Card is launching February 18. Twitter user Ballpen caught a few early bird launch campaign posters outside a LAWSON store showcasing Apple Pay d POINT with a NFC mark, just like PONTA. The launch campaign will run from February 18 to April 17 offering 7X bonus d POINT when using Apple Pay at LAWSON.
The LAWSON POS is built around the Panasonic JT-R600CR reader that is Apple Pay savvy and supports the VAS protocol. Apple Wallet Ponta at LAWSON uses VAS (NFC A) for reading and linking reward card information with a purchase. Docomo d POINT Apple Pay will also use VAS but there is more to it. Docomo d POINT has a far larger Godzilla sized market footprint than PONTA, and Docomo is looking to streamline its siloed payment services: d CARD (plastic), iD (NFC FeliCa), d POINT rewards card and the new d BARAI QR Code payment system into an intelligently integrated service package that can best SoftBank PayPay market performance.
Docomo announced in November that it would merge some d Barai functions into iD with an updated iOS app at some point. It looks like that app is coming February 18 that adds the user d POINT Card to Wallet. The real question is how it works on the updated LAWSON POS system and plugs into iD payments. Do we say ‘Apple Pay’ at checkout like we do for PONTA points, ‘iD’ or something else? Tune in for details in tomorrow’s press release. Now if only JRE POINT would go Apple Pay, I’d be finally free from plastic reward cards cluttering up my real wallet.
UPDATES Apple Pay Docomo d POINT Card is live, it works just like PONTA at LAWSON, say ‘Apple Pay’ at checkout then select d POINT or PONTA on the checkout touchscreen. There is a Wallet notification UI bug that displays the PONTA icon instead of d POINT when adding points but they are added correctly.
Tokyo Cashless 2020 is a periodic look at all things cashless as Japan gears up for the Tokyo Olympics event. If there is a topic you’d like covered, tweet @Kanjo
Mom always had a ready answer for us kids at the start of every family summer trip, “No honey we’re not there yet.” It was vague, non-committal, endlessly cheery. NFC Pay (aka EMV contactless) has made some progress at Japanese checkouts, but as Junya Suzuki lamented recently it’s still not universal. Cashless payments in general however have made good progress thanks to the Japan Cashless rebate program.
Every inbound cashless Japan experience is different, it depends on the kind of trip, the region and personal spending habits. A businessman using plastic credit cards staying in Tokyo area hotels and well known areas, then yes the experience is mostly cashless. A budget backpacker on Lonely Planet/Airbnb trail will have a very different, very cash cash experience. Europeans and Australians will find that their EMV contactless bank cards don’t tap very far and wide.
Just Say ‘Apple Pay’ Conundrum People would love to be able to just say ‘Apple Pay’ at checkout, but this does’t work very well in Japanese contactless checkout jungle. When you say ‘Apple Pay’ you get:
The main card set for Apple Pay Wallet
Face ID/Touch ID authentication request
This can play out in different ways. If you have an international issue bank card set as the main card and say ‘Apple Pay’ at Lawson, the reader pulls up the main card with a Face ID/Touch ID authentication request. If you have Suica set as the main card and say ‘Apple Pay’ at Lawson, it pulls up Suica with a Face ID/Touch ID authentication. If you want use Apple Pay Suica Express Transit at checkout, you have to ‘Suica’, not ‘Apple Pay’. Are you confused? The confusion is compounded by poor employee training. You can use EMV contactless at any McDonalds but getting the checkout staff to actually make it happen is a completely different story.
Who’s to blame for this state of affairs? I say everybody: Banks, Card companies, The EMV Consortium, Sony, NXP, The NFC Forum, Apple, Google, Samsung, and especially Visa Japan who refuse to play nice with anybody who plays nice with FeliCa. Instead of working together to create and market a few intelligent payment schemes that work seamlessly, we have a world of this and that pay. The only player to gain anything from the Japanese market card payment mess is, surprise, the card-less QR Code PayPay.
EMV contactless and known aliases To successfully navigate the Japanese contactless jungle, inbound Apple Pay travelers needs to be acquainted with a few checkout slogans: NFC Pay, credit and Suica. When you see the EMV contactless acceptance logos for Mastercard, Visa, Amex or JCB, say ‘credit’ or ‘NFC Pay’ at checkout. This should work for both plastic EMV contactless cards and Apple Pay/Google Pay/Samsung Pay inbound digital cards. Even if the checkout terminal does not display an Apple Pay or Google Pay logo, you are good to go.
Unfortunately, there isn’t comprehensive resource for NFC Pay store listings. Visa Japan only lists Visa Touch stores, Mastercard only lists Mastercard contactless stores, etc. The best approach for iPhone/Apple Watch inbound visitors is to create a Suica card on your device and be flexible, use a mix of Apple Pay Suica (recharged with Apple Pay cards), NFC Pay and plastic credit cards. NFC Pay nirvana may not be here yet, but we’ll get there…eventually.
The new JR East Shinkansen eTicket service debuts March 14, but 30 day advance ticket reservations mean it kinda starts today. The best explanation, Japanese only at this point, is the Eki-net online guide that outlines the new reservation, purchase and seat assignment process for PC and smartphone web pages. I find the smartphone online version more streamlined than the PC one but they are straight forward if you are familiar with Eki-net. The basic Eki-net process is the same until step 7, the section where you assign the eTicket (s) to your registered transit IC card (s). The differences from smartEX are interesting:
You can register up to 6 different transit IC cards to a single Eki-net account: Suica, Mobile Suica, PASMO, Kitaca, ICOCA, TOICA, manaca, PiTaPa, nimoca, SUGOCA, Hayaken
A single Eki-net account can reserve/purchase up to 6 Shinkansen eTickets then assign tickets and seats to registered transit IC cards
JR East Shinkansen eTickets are geared for family travel in a way that smartEX, EX-Press and the old Mobile Suica Shinkansen eTickets ending March 13 are not. Other systems can only attach a single IC transit card per account. The flexibility opens up some interesting possibilities, since Apple Pay Suica is just another transit IC card, one person can buy and assign eTickets up to 6 difference Apple Pay Suica devices. The downside is that transit card linking is completely manual and up to the user to update information when a new card is issued or the Apple Pay Suica ID number changes (less common than before but still happens). There are bound to be some very short trips that end with a transit gate error. Some other observations:
eTickets require a Transit IC card (paper tickets can be issued in the event of a lost transit card)
eTicket reservations are currently limited to Eki-net online but Eki-net app will gain eTicket support when the service launches March 14
As Suica App is tied to Apple ID and the Mobile Suica cards registered to it, I don’t see Shinkansen eTickets being integrated back into Suica App anytime soon
I don’t see QR Code ticketing support coming until after the transit IC eTicket system is complete and necessary gate infrastructure in place, a few years down the road at best
Eki-net eTickets are limited to JR East operated Tohoku, Yamagata, Akita, Hokkaido, Joetsu, Hokuriku Shinkansen lines. The next obvious question is when will other ticketing be migrated to Transit IC, and what kind of discounts will be offered?
Discounts, incentives and ticket system silos Most Japanese don’t buy express train or Shinkansen tickets at regular prices. The whole point of Eki-net, smartEx, and all the other account based ticketing systems are the discounts and incentives to get people out of the ticket office line and online. Each operator has their own complex set of discount schedules which they guard and control carefully because it is their business engine.
For this reason I am not optimistic we will see an all-in-one train ticket app. Sure, there is some integration of JR East eTicket and JR West e5489 because they share Hokuriku Shinkansen operations, and there might even be an app than integrates many different ticket systems, but I don’t see it offering all the discounts of stand alone apps like Eki-net, EX, Odekake-net, etc. I also don’t see multi-lingual support in the mix, at least not in time for Tokyo Olympics. The fun starts March 14 with many things still coming down the pipe, from next generation Suica to new transit gates. It will be an interesting time.