Apple Pay Japan Inbound Outbound

6 months after the release of iOS 11 the new NFC switching Apple Pay functionality combined with the global NFC support in iPhone X / iPhone 8 / Apple Watch 3 is driving tremendous change in Japan while creating the most advanced Apple Pay environment that exists for iPhone customers.

As I said before, Japan is the world’s most interesting and diverse contactless payment market:

What’s interesting is that Global FeliCa support in iPhone 8, iPhone X and Apple Watch 3 lets anybody visiting Japan with those devices add Suica to Apple Pay and instantly enjoy the benefits of Japanese FeliCa contactless payments.

Apple Pay in Japan is the only place in the world where you can mix and match FeliCa and (contactless) EMV payments side by side with the same device. That’s astonishing, and lots of fun.

To appreciate the change Apple Pay is bringing to Japan, here’s a look at the Apple Pay environment for Inbound and Outbound global NFC iPhone customers.

Apple Pay Japan and NFC Pay
Japan issue credit card holders using iOS 11 Apple Pay have the best experience across the board for FeliCa payment networks in Japan and NFC Pay networks abroad.

The first full year of Apple Pay in Japan drove a large uptake in mobile payments spearheaded by Apple Pay Suica. Japanese iPhone users are magically morphing from Apple Pay paupers into the most sophisticated, diverse and technically advanced set of Apple Pay users that exist, all without doing a single thing except use Apple Pay in Japan… and abroad. A full list of outbound capable Apple Pay Japan issue credit cards is here.

The reason for the transformation is simple, the NFC switching function of iOS 11 Apple Pay seamlessly uses FeliCa networks in Japan and NFC Pay networks abroad for Japanese users without requiring any new payment infrastructure investment. Apple Pay simply utilizes what’s already in place very effectively. NTT Docomo has something like this for Docomo customers but Apple Pay takes it to a whole new global level.

Apple Pay Inbound
Inbound credit card holders using iOS 11 Apple Pay also have the best experience across the board for FeliCa payment networks in Japan using their Apple Pay credit cards from home to add money to Suica. NFC Pay in Japan is limited but Apple Pay Suica has you covered.

Apple Pay Inbound is a very different situation. NFC Pay support is still limited to ‘Gaijin Ghettos’ (McDonalds, Tokyo Disneyland, IKEA, a few vending machines, and so on). Customer experience is all over the place. The staff at my local McDonalds, none of them Japanese most of them from India, insist in mishmash Japanese English that Mastercard Contactless is not a payment option. Mastercard Contactless is an option of course but explaining that is a hassle. It’s much faster to pay with Apple Pay Suica and be on my way.

Do yourself a favor and put Suica on your global NFC iPhone. Apple Pay Suica neatly sidesteps the NFC Pay infrastructure shortage and liberates every iPhone X / 8 customer. Add money to it with your Apple Pay credit cards from home. It works like magic and the entire Japanese contactless nation is at your command.

Truth be told that Visa, Mastercard and American Express have done little over the years to promote their NFC Pay contactless services with Japanese merchants or customers anyway. Only recently has Visa started to market dual-mode iD/payWave Visa Debit cards via SMBC that do not work with Apple Pay but certainly attempt to compete with it with plastic.

That NFC Pay Infrastructure Problem
McDonalds, convenience stores and other retail empires have the IT and POS backend resources to add NFC Pay support at any time but one problem is the situation for middle tier businesses and smaller merchants. If their business is 99% Japanese, 1% of the customer base is no incentive to upgrade a payment processing system to add NFC Pay when there is no return.

The most important issue holding up NFC Pay support in Japan right now is this: the vast majority of inbound visitors are from China who don’t care about or use NFC Pay, they want QR Payments (WeChat, etc.). Payments infrastructure follows the money so that is why Rakuten Pay, Origami Pay Mizuho Bank and the soon to be released Docomo ‘d Harai’ are investing in QR, not NFC Pay support. These systems are about servicing Chinese visitors, nothing more.

Some people suggest that Japan should junk FeliCa and go all in with NFC Pay and MIFARE. That’s not only ridiculous and solves nothing, it’s a security risk. If there is a lesson to learn from Meltdown and Spector it is that technology diversity is strength. Right? The NFC Forum now requires NFC A-B-F support for smart device global certification anyway, smartphones are quickly evolving to take care of it all. The ‘let’s do everything with NFC A-B’ argument is a moot point.

It’s All About Vision
Japanese enjoy the world’s most diverse and advanced version of Apple Pay thanks to Apple’s iOS 11 advancements and decision to put global NFC in iPhone and Apple Watch. But it is also due to MasterCard, JCB and AMEX card issuers taking care of Japanese customers by providing dual global NFC ID numbers to Apple Pay. This is a fascinating development that points a way forward for all smartphones and platforms combined with global NFC support.

Japanese customers don’t have to do anything except use Apple Pay. iPhone takes care of everything, it just works. Why can’t it ‘just work’ for inbound Apple Pay too? Or other platforms? It doesn’t because credit card companies and issuers don’t really care about customers. They focus on capturing transaction fees rather than working together to improve customer services.

If Mastercard started offering dual global NFC ID numbers to all customers worldwide, I guarantee Visa would add NFC-F to the EMV/NFC spec faster than you could say: cash or charge? When it comes to the credit card industry world standards like EMV are just market share bargaining chips, nothing more. Customer service is a distant concern.

This is why I think transit operators in London, Singapore and elsewhere are insane allowing direct credit card EMV contactless transactions at the transit gate. Not only does it slow transactions way down, it’s also gives away money and control to credit card operators who do not care about transit customer service or transit safety.

It’s much smarter for transit operators to keep all the money and control with stored value cards, put them on smartphones and limit credit cards to a secondary role with an Apple Pay Suica Recharge approach. Oh, and while you’re at it, build your own retail transaction processing empire a la JR East Suica.

Reimagine New York metropolitan area transit with a Tokyo level of transportation infrastructure and station retail combined with a New York area ‘Suica’. The mass movement of money would rebuild New York’s economic foundation for the next generation. It’s amazing to me that Americans don’t consider themselves important enough to deserve this.

Moving people is moving money. Build a beautiful, attractive and insanely convenient transportation / retail network and people will flock to it showering money.




Apple Pay Japan Adds DC Card and JAL Cards

Mitsubishi UFJ Nicos added Apple Pay support for DC Card this week joining their MUFG Card which has been on Apple Pay since December 2016. The company also said that NICOS Card Apple Pay support is coming soon.

DC Card hosts both Mastercard and Visa brands but Apple Pay ads exclusively showcase DC Card Mastercard. The reason for this is that Visa Japan cards only support Apple Pay store purchases but not in-app / web purchases, Apple Pay Suica recharging or NFC switching.

DC Card Apple Pay

DC Card Mastercard fully supports Apple Pay and the NFC switching feature of iOS 11 Apple Pay allowing Japanese DC Card customers to use Apple Pay with Mastercard Contactless terminals around the world and the FeliCa QUICPay network at home. See the Apple Pay Japan Credit Card page for the full list of NFC switching card support

One final bonus is that Mastercard Japan offers the best exchange rates with overseas card purchases, better than Visa, American Express or JCB.

JAL also added more cards to Apple Pay via DC Card:

JAL Card Suica (via View Card)
JAL・JCB Card (via JCB)
JAL・Visa Card (via DC Card)
JAL・Mastercard (via DC Card)
JAL Card TOKYU POINT ClubQ (via DC Card)

JAL-JCB card and JAL-View Card have been on Apple Pay for over a year but the DC Card support is new. All of these work on the QUICPay payment network in Japan. JAL-DC Card Mastercard and JAL-JCB cards also support iOS 11 NFC switching for Apple Pay use abroad via Mastercard Contactless and J/Speedy payment networks.

Die FeliCa Die!

There are two kinds of gaijin who live in Japan. Those who hate Japan but love Japanese money, and those who love Japan and love Japanese money. But all of us love to complain.

Gaijin rants that link to Ata Distance are fascinating and fun to read but tend to fall into two kinds of opinions:

  1. Japanese technology sucks because they do not follow “world standards”
  2. The Japanese iPhone camera shutter sound sucks

I guess that Japan being the first country with mobile contactless payments, or that NFC Forum certification for NFC mobile devices requires NFC Type A/B and Type F support, or that all new iPhone and Galaxy devices have this, with Huawei and Oppo to join later doesn’t mean anything.

Time for Tim Cook to put FeliCa in the grave and let the world live with slow less secure MIFARE and even slower EMV transaction speeds. Have fun getting out of those clogged congested and dangerous station gates!

As for the shutter sound, Japanese users take this in stride because they use camera apps that don’t make a shutter sound, or they use Live Photo.

Regarding the disappearing Apple Pay Suica card, the JR East support page has a fix for that:

  1. Sign into iCloud with the same Apple ID and re-add Suica in Wallet
  2. If that does not work, go to the Mobile Suica web site, sign in with your Mobile Suica ID and re-issue your Suica

reddit reactions

Somebody linked my Apple Pay Japan One Year Mark post on reddit, reading user comments there was fun. Most were “Apple Pay Suica is neat” variety but in true reddit fashion there were a few rants.

First there is the typical ‘why can’t Japan follow world standards’ complaint that’s pretty standard outside of Asia.

Japan was the first country to introduce osaifu keitai (e-wallets) for mobile contactless payments on Docomo feature phones starting July, 2004. FeliCa (NFC-F) was the technology behind it. The Nokia 6131 in 2006 was the first feature phone outside of Japan to use NFC (A-B). Next time you hear somebody complain about Japan ‘re-inventing’ the mobile contactless payments wheel, kindly remind them that wheel was invented first in Japan.

This complaint goes hand in hand with the ‘you can’t use proper Apple Pay here’ in Japan complaint. I guess NFC-F and FeliCa are somehow not ‘proper’.

The NFC Forum and EMV members could have added NFC-F during the NFC Forum sponsored credit card NFC normalization process about eight year ago. They did not choose to do so. Philips developed NFC-A, Motorola NFC-B, Sony NFC-F. World Standards are loaded with international politics. I don’t think it’s an overstatement to say that American and European interests chose to freeze Japanese mobile payment technology out of the game.

I’ll write more about Japanese NFC Pay support (paywave, Mastercard Contactless, etc.) in a future post.
Japan e-money map

The complaint about the richly diverse Japanese ‘e-money’ contactless payment network is an interesting one. It would be great to simply tell the store clerk ‘Apple Pay’ and have the correct Apple Pay card magically appear for authentication. Japanese carrier Osaifu Keitai already do something like this and automatically recognize the correct payment network. All smartphones need to work this way too.

But there will always be limits, what if you have two cards under the same payment network sitting in Apple Pay Wallet? iPhone X / iPhone 8 hold up to 12 Apple Pay cards, some manual selection will always be necessary.

The Suica Recharge complaint is fascinating. Suica not being a credit card and stored value is the very thing that separates it from the creaky credit card payments processing networks and makes it so fast with transactions. It’s also ‘safe’ and only holds what you put into it which is why so many Japanese love to use Apple Pay Suica as a kind of daily allowance card. Spending habits are highly personal. There are cash people, credit card people, and stored value card people too.

What’s right is simply what is right for you.

EX App Updated for iPhone X

JR Central updated their EX App to v2.0.8 for Face ID and iPhone X compatibility. Release notes mention other improvements in the UI. EX App is used for Smart EX and EX-Press Reservation Shinkansen e-ticketing service on the Tokai and Sanyo Shinkansen Tokyo-Osaka-Fukuoka line and works in tandem with Apple Pay Suica.

Updated English language versions should also be available on USA, Australian and Indonesia app stores but is not confirmed.