FeliCa Dude did his usual public service of posting Mobile FeliCa details for the latest Pixel 6 devices. There wasn’t any change from Pixel 5, so no global NFC Pixel for inbound visitors. Nevertheless it’s a good opportunity to review some important recent developments that have taken place behind the scenes on the Android Mobile FeliCa side and examine some possible 2022 scenarios. Things have changed even if most users don’t notice any difference.
The chart outlines Mobile FeliCa on Google Pixel developments based on information from FeliCa Dude’s tweets.
Mobile FeliCa 4.0 (Pixel 4) freed Android device manufacturers from having to use embedded secure element + NFC chips from the FeliCa Networks supply chain. Any FAST certified secure element will do. This development has resulted in a number of inexpensive Osaifu-Keitai SIM-Free smartphones released by Chinese manufacturers recently that are selling well. Hopefully it will have wider implications for inexpensive global NFC Android devices. There are lots of people in Hong Kong who would buy one to use Octopus.
Mobile FeliCa 4.1 (Pixel 5/Pixel 6) introduced multiple secure element domains. This allows the device manufacturer to ‘own’ the eSE and load or delete Java Card applets. FeliCa Dude thinks that multiple secure element domains (MSED) might play a part in the MIC digital My Number Card due to launch on Osaifu Keitai devices in 2022. My Number card uses NFC-B but MSED allows the Mobile FeliCa secure element to host it anyway, an interesting development.
Mobile FeliCa 4.2 or 5.0? The next version of Mobile FeliCa (MF) will hopefully support FeliCa SD2 next generation features that shipped in November 2020, features that power Suica 2 in 1 Region Affiliate Transit Cards (aka Super Suica) which are going wide in March 2022. These cards really need to be on mobile for future MaaS service plans outlined by JR East which cannot happen until SD2 features are added.
The improvements in MF 4.1 certainly give Android device manufacturers the ability to update MF over the air but don’t hold your breath. Standard industry practice to date has been ‘buy a new device to get new features’. Apple has been a little bit better in this regard: MIFARE support was added in iOS 12 for Student ID cards and iOS 15 fixed some Calypso bugs on iPhone XR/XS and iPhone SE.
A FeliCa Dude Reddit post comment regarding Asus smartphones illustrates the pre-MF 4.0 situation: “any phone that lists ‘NFC’ compliance must support Type F (FeliCa), but as there is no Osaifu-Keitai secure element <aka Mobile FeliCa secure element>, you will be limited to reading and potentially charging physical cards: you cannot use the phone as a card itself.” That was then, this is now.
Most people assume FeliCa support requires a Felica chip but this is not true. The evolution of hardware independent Mobile FeliCa is very clear: the ‘FeliCa chip’ from Sony/FeliCa Networks requirement is long dead and gone. Manufacturers like Xiaomi claim they make special models and add FeliCa chips just for the Japanese market, but that’s just marketing BS: they run Mobile FeliCa on the same NXP NFC chipset they sell everywhere. The majority of smartphones supporting FeliCa don’t have a FeliCa chip, everything from EMV to FeliCa and MIFARE runs on any GlobalPlatform certified secure element on any Android device.
Hopefully the sum of recent Mobile FeliCa developments, along with Garmin Suica, Fitbit Suica and built in WearOS Suica showing up in recent developer builds, indicate that FeliCa Osaifu Keitai services will become standard on Android devices as they have been on all iOS and watchOS devices since 2017.
I don’t put much faith in market data from companies selling research to sell their other ‘services’. If you ever observed how the backend research process works, you wouldn’t either. Nevertheless it’s fun to read and compare signposts along the never ending journey. MM Research Institute (MMRI) issued a PR tease for their Japanese smartphone marketshare report covering results for the first half of the Japanese 2021 fiscal year (April~September).
The Keitai Watch site paid for the full report and posted some numbers for the various MMRI breakdowns.
Marketshare ranking (all mobile phones)
FCNT (Fujitsu): 6.7
The category breakdowns show some interesting new developments
Marketshare ranking (smartphones only)
FCNT (Fujitsu): 5.9
The story here is that iPhone was selling well leading up to the iPhone 13 rollout, with the addition of Rakuten Mobile offering deeply discounted iPhone 12 and iPhone SE that could be bought with Rakuten Points certainly helping the most, once again demonstrating the power of the Rakuten Economic Zone.
Marketshare ranking (non-carrier SIM-Free only)
The non-carrier SIM-Free ranking interests me most. OPPO and XIAOMI released some interesting low end FeliCa Osaifu Keitai capable models recently. The surprisingly strong showing tells me that the market wants inexpensive SIM-Free Osaifu Keitai models. If there was a SIM-Free FeliCa/Osaifu Keitai ranking it would probably be Apple, OPPO and XIAOMI. OPPO wins because they deliver 5G and FeliCa for a very low price.
Let me rephrase that: Global NFC Google Pay will never happen because it depends on the device’s ability to run Osaifu Keitai apps.
To which I’ll add: because Google can’t be bothered building their own software stack in Android OS Google Pay that replaces Osaifu Keitai.
Osaifu Keitai is a smartphone only software stack that has not and can not be updated for the smart wearables era. This shortcoming is driving some interesting solutions, discussed in a recent Reddit thread lamenting that Pixel went cheap instead of deep…again.
Comment: All Pixels sold in Japan since the 3 have Mobile FeLiCa NFC-F. However, Google Pay makes limited use of it. Unlike Apple Pay, Google’s implementation is limited to just a few apps in Japan. They are going to need to do a top-to-bottom overhaul of Google Pay to make this available worldwide. Not this year. But maybe as they integrate Fitbit and produce a watch, that might be the kick they need to make it work.
Mobile FeliCa is installed and runs on Pixel models worldwide, however Pixel blocks the Osaifu Keitai stack from running except for Japanese models. Despite this stalemate on the Android side, we’ve seen a number of smart wearables with Mobile Suica released over the past year from Garmin and Fitbit. We’re also seeing signs that Suica support is coming to Wear OS. From a reader:
Suica appears to finally be coming to Google Pay for Wear OS. There’s strings like “FeatureRolloutsModule_ProvideSuicaSupportedonWearValueFactory,” “WearSuicaCard,” and “WearSuicaProvisioning” in the newest APK.
Wear OS, Garmin and Fitbit do without Osaifu Keitai by using Mobile Suica Lite which runs on Mobile FeliCa Cloud. This is fine for wearables but it does leave a service gap, Osaifu Keitai devices gets the full array of FeliCa services but wearables get a subset. This begs the question, what is the future of Osaifu Keitai when it’s limited to smartphones? Apple does without it which is why both iPhone and Apple Watch seamlessly deliver the same full set of Wallet services.
Only when Google does a top to bottom overhaul of Google Pay that replaces its current dependence on Osaifu Keitai can Global NFC Google Pay ever happen and allow Google to deliver a Pixel family of devices from smartphone to wearables, that truly rival Apple, feature for feature. We need that.
Google’s previous effort, the ill-fated Android Pay HCE NFC-F, along with cheap over deep premium Pixel devices, doesn’t instill confidence that Google cares about getting it right.
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.
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.
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.
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 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.
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
We’ve already seen banks and Apple chafing over transactions fees on multiple occasions, the latest being ‘Banks Pressuring Visa to Cut Back on Apple Pay Fees‘ because Apple dared release their own credit card under the Mastercard brand via Goldman Sachs. German banks and Australian banks in particular demand the right to use iPhone NFC in their own payment apps instead of Wallet so they can harvest the user data they can’t get via Apple Pay and drop Apple Pay support all together in favor of their own proprietary payment apps (our exclusive card comes with our exclusive app). But there’s an aspect of the ‘open’ argument that will not be discussed by EU regulators, the banks and credit card companies.
I’ve been watching ‘My Cousin Vinny’ a lot recently. I love the courtroom scenes with Joe Pesci’s Vinny character turning the prosecution arguments upside down. There’s a key scene early on when Vinny uses a pack of cards to convince Ralph Macchio’s character to give Vinny a chance to defend him: ‘the prosecutors are gonna show you bricks with solid straight sides and corners, but they’re going to show them in a very special way’ so that judge and jury see bricks instead of playing cards, which is what ‘open NFC’ arguments are: paper card illusions.
NFC is just hardware, it’s worthless without the software protocols that drive it. NFC also has different definitions. The bank industry defines NFC as NFC A-B ISO/IEC 14443. The NFC Forum defines NFC as NFC A-B-F for device certification. On the protocol side the bank industry defines NFC as EMV because this is their industry standard created and managed by EMVCo (Europay-Mastercard-VISA initially, now collectively owned by American Express, Discover, JCB, Mastercard, UnionPay and Visa).
Are EU regulators going to argue that ‘open NFC’ is defined as NFC A-B-F on the hardware side and EMV, MIFARE, FeliCa protocols on the software side? Of course not. They will narrowly define their Vinny brick as NFC A-B and EMV, and maybe Calypso as the transit protocol is used in France for transit. Why would they do that?
It’s very simple. European banking interests don’t want to pay transaction fees to Apple, the Apple Pay tax. They want to cut out the middle man with their own exclusive apps and harvest user data. They don’t want inconvenient questions such as why there are all those different NFC standards and protocols out there, how this came to be and what really constitutes ‘open’. Why did the ISO/IEC Joint Technical Committee choose Phillips NFC-A and Motorola NFC-B while shutting out Sony NFC-F? Was that part of creating an ‘open’ and level NFC playing field on the global marketplace? Of course not, it was about playing favorites while shutting Sony and Japan out of the game. Now they want to do the same to Apple Pay. I still think Junya Suzuki is right: the EU will never demand the same thing of Samsung Pay or Huawei Pay that they are demanding from Apple.
Sawada Sho tweeted a thoughtful question recently regarding the App Store in-app payment controversy. He pointed out that gaming and other platforms charge developers great deal of money for hardware and software access, nobody questions that. Apple offers a lot of access for a very low price, is it fair to demand free passage on the App Store because it is Apple? Sho san thinks the Apple transaction cut is a fair tradeoff. Some tech writers have occasionally asked the same basic question: what’s fair?
EMV, MIFARE and FeliCa all have licensing and certification fees that all customers (developers) pay. Apple has gone to a lot of expense licensing those technologies in addition to licensing a GlobalPlatfrom Secure Element that they build into their own Apple Silicon. Those costs are recouped by Apple Pay transaction fees and fund future developments like digital keys with UWB, ID and other Wallet goodies we’ll get later on in the iOS 15 cycle. I’ve said it before and say it again: Apple took the time and expense to build a first class restaurant and outsiders are demanding the right to use Apple’s kitchen to cook their own food to serve their own customers in Apple’s restaurant.
I guess EU regulators want to give those away free to EU banking interests and let them have their way in the interest of ‘open standards’ that they define and end up protecting the home turf. That sounds like a good deal to me.