Consumption tax, Cashless rebates and Coffee shops

In case you are not a DOUTOR regular, you may not have noticed that they recently added QUICPay and iD to their cashless payment options. What’s interesting is that QUICPay and iD are the only way to pay with credit/debit cards. It’s completely contactless, the only swipe-able item is the DOUTOR prepaid store card (which is MIFARE on the reader btw). In other words DOUTOR is all ready for the CASHLESS rebate program that starts tomorrow along with the 10% consumption tax.

But DOUTOR is not listed in the iOS CASHLESS App. 7 Eleven, FamilyMart and Lawson are listed there, but MiniStop is not. What is going on? The CASHLESS rebate program is rolling out in waves. The first cut of 500,000 CASHLESS rebate stores goes online October 1, with successive waves at, hopefully, regular 10 day intervals until everybody is onboard. This keeps payment systems from overloading which I think is smart, as a Japanese friend put it, “It’s the smartest thing the Japanese government has done so far.”

You might notice double listings for CASHLESS rebate stores, one for credit cards, one for QR, one for e-payment cards. This is also a startup limitation. Store listings will be consolidated after the program starts.

There are some interesting startup store differences, DOUTOR and Starbucks are not listed, but Cafe Colorado is, and get this: they have the Odagiri Joe marketed AirPay system in place that takes everything from Suica to credit cards to NFC Pay. The local franchise owner is even excited about putting up his CASHLESS poster tomorrow.

If that’s not cashless progress, what is? Regardless of whether the CASHLESS rebate is ‘a success’ or not, it will be a tipping point. Already I notice a shift in public perception: if a store is cash only, it definitely looks behind the times in the minds of customers.

I think that’s the whole point.

Advertisements

Tokyo Cashless 2020: Dear JR East, we need a new Suica Charge App

1️⃣ >Dear JR East, we need a new Suica Charge App
2️⃣ Consumption tax relief with the CASHLESS rebate program
3️⃣ Are Apple Maps and Siri really Apple Pay level ready for the Tokyo Olympics?
4️⃣ Blame the Japan Cashless Payments mess on VISA and EMVCo, not FeliCa

Tokyo Cashless 2020 is a series covering all things cashless as Japan gears up for the big event. If there is a topic that you’d like covered tweet me @Kanjo

Now that iOS 13 with supercharged Core NFC is almost here, it’s time for JR East to junk the old Suica Charge app for Sony PaSoRi FeliCa reader combo on life support until the plug is pulled in September 2020, and create a new Core NFC supercharged app for iOS 13. Since any iPhone 7 and later has the ability to Read/Write FeliCa cards build a whole new app around iPhone as the NFC read/write device. Here are some other helpful suggestions:

  • Make the app multilingual, or at least support English in addition to Japanese
  • Cooperate with the other major transit card companies to support all compatible Japanese transit IC cards for recharging, not just Suica
  • Support international issue credit/debit card registration in the app so that anybody from anywhere can recharge plastic transit IC cards with their bank card
  • Support In-App Apple Pay for recharging
  • Support the app on Non-Osaifu Keitai Android phones that can read/write NFC-F, there are lots of them out there coming to Tokyo in 2020, support Google Pay for In-App recharging too

There is an ocean of plastic Japanese transit IC cards out there. There are lots of Android users, and even iPhone users, who cannot use Apple Pay Suica or Google Pay Suica. A handy Suica recharge app that lets inbound travelers recharge plastic transit cards on the go with just a smartphone is screaming to be born, it would be an essential tool in alleviating station recharge kiosk lines during the Tokyo Olympics. JR East, please make it happen.

Update: I forgot that JR East already announced the end of “Suica Internet” services in September 2020. Suica Internet is a set of internet based services for online shopping and recharging Suica cards with the Sony PaSori reader and a Windows PC. JR East is pruning legacy services as they prepare for the next generation Super Suica rollout in April 2021.

iOS 13 FeliCa NFC Reader Apps

With the official release of iOS 13 quickly approaching we are starting to see new app announcements built around iOS 13 enhanced Core NFC Read/Write functions. This is the first time that the full range of iPhone NFC Read/Write has been unlocked for developers. In Japan this is especially important because there are so many FeliCa transit cards out there, almost everyone in Japan has one or more Suica, PASMO, ICOCA, TOICA, etc. There are also the ‘My Number’ Japanese Individual Number Card which is evolving into a national identity card. The Japanese government already supports Android and has announced iOS 13 support.

People need to have an easy way to read card information but for iPhone users this meant buying a separate FeliCa NFC reading device and software for Mac or PC, or borrowing an Osaifu Keitai Android smartphone.

The great thing about iOS 13 on iPhone is that a separate NFC/FeliCa reading device is no longer necessary. iOS 13, iPhone, an app are all you need. Two Japanese FeliCa iOS 13 apps were announced yesterday on Twitter: IC Card Reader and Japan NFC Reader. These are focused on transit IC cards and other FeliCa stored value cards like WAON and nanaco. This is what most people need because there is so much FeliCa plastic out there. People want to know how much balance is left on the card when out and about. Hopefully these and other apps sure to follow, will blossom into full fledged apps that support reading My Number cards and much more.

UPDATE: the first FeliCa NFC read/write app using iOS 13 Core NFC arrives on JP App Store, IC Card Reader by Money Forward. Check it out, it’s slick.

JR West ICOCA Expands Coverage on JR Shikoku

JR West ICOCA extension on JR Shikoku

If you are familiar with the Japan Transit IC card system that started with Suica and grew from there, you might know the other major cards like JR West ICOCA and JR Central Toica. What about the JR Shikoku card? There isn’t one.

The problem dates back to the many bad decisions made by the Nakasone Government when they privatized JNR by breaking off small weak areas like Hokkaido and Shikoku as independent JR companies. It would have been much better if they had used the NTT privatization model of just two companies, East and West, which balance out weak areas with metropolitan hubs.

JR West ICOCA covers a small part of the JR Shikoku rail network already, today they announced an extension covering 7 more stations in March 2020. Even with this extension which is compatible with Apple Pay Suica, Transit IC coverage in Shikoku remains a real headache, one that is hopefully and finally solved by Super Suica in 2021.

File:ICCard Connection en.svg
Japan Transit IC Map, a very cool animated timeline is also available

Suica Tops Contactless Use in Tokyo Area

Another market survey, another few data points. MoneyZine writers Hideyuki Kato and Isamu Saito report some interesting results of 2 different cashless use surveys. As I reported a year ago, Apple Pay has brought a lot of changes to the Japanese payments market but it’s hard to make sense of it due to highly regional preferences: Suica is king in the Kanto area, ICOCA in the Kansai, and so on.

The 1st data point is a survey from Yumenomachi that ranks the different cashless payment methods:

  • Credit cards: 88.4%
  • Transit cards: 49.7%
  • Apple Pay/Google Pay/Osaifu Keitai: 35.4%
  • Prepaid Reward Cards (nanaco, WAON, Edy): 31.7%
  • QR Codes (Line Pay, PayPay, etc): 25.6%

The 2nd data point is a survey from One Compath. This survey reports 56% of the respondents as using cashless more than a year ago, with slightly different ranking:

  • Credit cards: 71.4%
  • Transit cards: 31.7%
  • Prepaid Reward Cards (nanaco, WAON, Edy): 53.0%

The 3rd data point from the same One Compath survey is very interesting but not surprising. It ranks prepaid card use separately for transit and reward cards by prefecture. Transit card use for payments in the Kanto Area (Tokyo, Kanagawa, Chiba, Saitama) is 85%, while prepaid reward cards are the overall winner on a national basis. This is because of the reach of AEON supermarkets and convenience stores in rural areas where people don’t use transit cards or the local transit cards do not support purchases. The next generation Super Suica format is aimed specifically at incorporating these small rural area transit cards so they can be used anywhere as Suica.

One take away is that in the Kanto area Suica is easily the most used contactless card at checkout (Suica issuance is twice that of PASMO). Credit cards lead in cashless, but are still mostly swipe or Chip and PIN at checkout. When prepaid cards are totaled together, credit card and prepaid card use is almost equal. The surveys do not look at average purchase amounts for the different cashless methods. I suspect that Suica and other prepaid card use leads for smaller purchases while credit cards are used for larger purchase items.

We also know from a previous survey by IT journalist Sachiko Watanabe that most iPhone users do not use Apple Pay:

  • 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

These numbers jive with the 35.4% digital wallet use figure in data point 1. The short summary here is that there is still plenty of opportunity for Apple Pay to grow in the Japanese market, and the Super Suica format in 2021 has the potential to break down the regionality and shake up the market.