Tokyo Cashless 2020: NFC Pay…are we there yet?

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.

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MTA OMNY Apple Pay Express Transit User Problems

Apple’s decision to offer Apple Pay EMV style Express Transit as a iOS 13 feature when adding cards to Wallet may not have been a good idea after all, especially on the work-in-progress mixed environment that is MTA OMNY. Manual swipe MetroCards will be around for a few years, and with Cubic Transportation running the show it is anybody’s guess when OMNY, the system and the MIFARE MetroCard replacement, will completely in place and running smoothly.

For every tweet saying Express Transit is great, there are plenty of complaints of unwanted OMNY charges because iPhone users didn’t know Express Transit was turned on. The thing is iPhone and Apple Watch have to be damn close for a read. Unless the device is in a pants or coat pocket or wrist that brushes on the OMNY reader, accidental reads can’t happen. Nevertheless Apple would have happier New York City customers keeping EMV Express Transit off by default, and leave default on for the native OMNY transit card, whenever that arrives.

UPDATE: London TfL users are having the same problem

Open loop wishful thinking trashes Apple Pay Express Transit reputation

The latest OMNY bump in the road perfectly captures the downside of making contactless credit/debit cards a one size fits all solution. As the New York Post piece (via MacRumors) points out, some Apple Pay Express Transit users are being double charged for fares. Perhaps they didn’t know that Express Transit was enabled in the first place, perhaps the iPhone passed too close to the OMNY transit gate reader. It’s a classic “you’re holding it wrong” situation that has nothing to do with Apple Pay Express Transit and everything to do with the current EMV architecture and how banks implement it.

Part of the problem is that OMNY is new, it’s not working across the entire MTA system yet, and open loop EMV bank cards will never replace all classic MetroCard fare options. That job is for the MIFARE based OMNY transit card due in late 2021. Until the system is complete Metro users will have to juggle different cards and deal with a very long transition. Transport for London (TfL) users have had MIFARE based Oyster cards since 2003, contactless credit/debit cards have been ubiquitous since the 2012 London Olympics when open loop was added to the TfL Oyster fare system.

To Biometric or not Biometric?
Open Loop credit/debit cards on transit gates instead of native transit cards always come with banking and credit industry baggage. Even in the contactless card heaven that is said to be London, there are a surprisingly number of gotchas: minimum limits for using cards, max limits that require PIN codes. It’s an endless loop of banks pushing one way and merchants pushing back.

The golden uptake for Apple Pay in Japan was Suica and is the same story everywhere: it’s all about getting rid of coins for transit, coffee, sandwiches, etc. The small stuff. This is the 20,000 JPY prepaid heavenly region where Apple Pay Suica sings and banks so desperately want to shut out all other players and keep all the marbles. But bank cards have an authorization problem: banks set spending limits not the card architecture. The line is always changing, what works today might not work tomorrow. The prepaid Suica architecture itself is the firewall that does away with user authorization because local processing transaction at the transit gate or store reader is all the authorization necessary.

Express Transit was developed for Apple Pay Suica in 2016, it remains the best matchup because the feature is a basic part of the Suica card architecture that is not a bank card. Apple Pay Express Transit for EMV payment cards that appeared with iOS 12.3 is a retrofit job that I predicted would have problems because retrofits are about dealing with baggage, not creating a better long term solution. 7 months later we are already there. This problem isn’t going away, not as long as banks and EMV keep operating the way that they do.

2019 Tidbits

The end of the year season is down for the count. Barring any news items like Apple Pay Octopus really launching this year, this is probably my last news post for 2019. Not news really, just tidbits.

Lingnan Pass and ShenZhen transit cards coming to Apple Pay in 2020
This piece of news came from Twitter users noting that the Lingnan Pass will come to Apple Pay in 2020. The Lingnan Pass and ShenZhen Transit pages show announcements released today (December 11), a machine translation roughly says Apple Pay support is coming soon. China has had the PBOC 2.0~3.0 contactless standard and T-Union transit card architecture in place for some time, with local transit cards slowly being updated to the new format. Beijing and Shanghai transit cards arrived on Apple Pay with iOS 11.3. Additional China transit cards were tested in an early developer preview of iOS 11.4 but dropped before the developer beta. Beijing/Shanghai transit cards were labeled beta up until iOS 12.2. Apple Pay Lingnan Pass and ShenZhen Transit will likely follow the Beijing/Shanghai transit card model with bank card recharge limited to China Union Pay (Interesting side note: Octopus and Lingnan Pass have a dual mode transit card). If Tim Cook does visit Hong Kong and China on his trip, things might shape up to be an excellent Apple Pay transit card year end Asian adventure.

Tim Cook’s Excellent Asian Transit Adventure?
The Tim arrived unannounced in Tokyo a few days ago, his first public appearance here since September 2016 and the first public demo of Apple Pay Suica just before the service launch. With Tim’s arrival in Tokyo I noticed an odd uptick in views from Hong Kong. When Tim landed in Singapore, Hong Kong views ticked up again. Obviously Hong Kong iPhone users are hoping that Tim will visit Hong Kong and launch the long delayed Apple Pay Octopus. I hope so too. Update: Apple Maps Hong Kong Transit information is available to China mainland users after a long absence.

12/19 UPDATE: Apple Pay Octopus has been delayed to later in 2020.

1/8 UPDATE: Apple announces new transit cards for China but not Octopus

Apple Pay Ventra
This was promised as ‘coming later this year’ back in May. As of December 10 Ventra Twitter support is still promising users to “stay tuned.” Let’s hope Cubic is working overtime to make it happen. Update: Ventra has changed the Apple Pay Ventra blurb from ‘coming later this year’ to ‘coming soon,’ we’ll see Apple Pay Ventra in 2020.

JP POST going Cashless
This was announced some time ago but is worth repeating: Japan Post is going cashless starting February 2020 in select central post offices, rolling out to all branches by May 2020. Your favorite plastic credit cards, eMoney cards (iD, QUICPay, Suica, etc.) and QR Codes (The PayPayPay crowd) can be used to pay for postage, sending packages, stamps, postcards, catalog items, etc. It would be nice if cashless payments improve post office lines and wait times, but I guarantee that’s not going to happen.

The Suica Part

The arrival of Apple Pay Express Transit on Transport for London this month is getting a lot more press than the debut of Apple Pay Express Transit and Suica in October 2016. Local coverage at the time was focused on the arrival of Apple Pay in Japan, Express Transit was barely mentioned. TfL is also getting more press than the debut of Express Transit on the New York MTA OMNY system earlier this year. Apple even created a special page highlighting its arrival.

I suspect there are a few reasons for the brouhaha. The Oyster IC transit card has been around since 2003, open loop EMV contactless cards service started in 2012, Apple Pay support arrived in 2015. MTA on the other hand only started OMNY with very limited open loop transit service in late May. The majority of MTA users still do the MetroCard manual swipe thing. In short TfL users are very familiar with Oyster transit IC cards, contactless bank cards and Apple Pay. They are well aware of the Express Transit difference. The same is true for Apple Pay users in areas like Sydney with a similar transit card system.

MacRumors did a good job of reporting the initial Express Transit on TfL test ramp up before the official debut. Joe Rossignol’s explanation of Express Transit mode support in “parts of Japan” is rather odd though. Which parts does he think don’t work?

The Suica part covers JR East, but since Suica is part of the Japan Transit IC Mutual Use Association this means that Apple Pay Suica works with the PASMO, ICOCA, manaca, nimoca, Pitapa, Toica, Sugoca, Kitaca and Hayaken parts. The Okinawa part will be joining in April 2020. Maybe Rossignol means the parts outside of the blue/pink square mutual transit use area? Most of these are already transit compatible with Apple Pay Suica (the ones with IC arrows pointing at them). This leaves the ones without IC arrows, which will be joining with Super Suica in 2021.

With the exclusion of the soon to join Okinawa OKICA, Apple Pay Suica already covers all the major transit parts in Japan. I have no idea which Apple Pay Suica incompatible parts Rossignol is referring to. The Minobu line? The Oigawa Railway? It is a mystery.

File:ICCard Connection en.svg
Japan Transit IC Map, outside white area cards are due to join Super Suica in 2021