Of Course Apple Pay is Bigger Than In-App Payments! Now that NFC POS systems actually work…in America

It was just a year ago that eMarketer made a big splash on Apple tech news sites with their Starbucks app is bigger than Apple Pay report:

Retailers are increasingly creating their own payment apps, which allow them to capture valuable data about their users. They can also build in rewards and perks to boost customer loyalty,

Starbucks App Leads Mobile Payment Competitors eMarketer.com

This turned out to be bullshit marketing nonsense because as I discovered using Apple Pay in America just when that report hit, the average Apple Pay store checkout experience sucked.

Now eMarketer is saying the same thing: “Apple Pay has benefited from the spread of new point-of-sale (POS) systems that work with the NFC signals Apple Pay runs on.” That work with the NFC signals Apple Pay runs on?! It sounds like eMarketer isn’t exactly sure what NFC is. Why not just say Apple Pay has benefited from the spread of new point of sale (POS) systems that work, yes, actually work now dammit! No more “you’re holding wrong” nonsense.

Duh. Is it just me or does the entire Apple tech news scene fail to see how poorly written and shoddy both eMarketer reports are? They are clickbait disguised as market research, nothing more.

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The JAPAN CASHLESS Rebate Inflection Point

On the eve of the CASHLESS Rebate program launch I wrote:

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.

Consumption tax, Cashless rebates and Coffee shops

It really doesn’t matter if the CASHLESS Rebate program is a success or a dud. It’s an inflection point tick mark in the mind of Japanese society, the ship of Japan is making a tiny course correction that will veer the vessel off in a very different direction over time. We already have the big changes that the Apple Pay Suica ‘black ship’ brought to Japan since 2016, and that was just the start.

Junya Suzuki, Japan’s top journalist for all thing cashless, posted a new article: The Real Reason for the Cashless Rebate Program. Suzuki san makes the same argument: the Cashless Rebate Program is an inflection point, but with much more detail and depth. It’s a great read and worth a look even just for the pictures and captions.

The JAPAN CASHLESS Rebate Day 1: convenience stores

It was a fun day. I tried out some local CASHLESS rebate stores and it was…boring. I paid with Apple Pay Suica like I always do. A close examination of the receipt showed that the 2% rebate was instantly deducted from the transaction amount. I didn’t have to say anything or do anything but wave iPhone to the reader.

That was not clear from the CASHLESS web site: When you make a cashless purchase with any of the certified methods (credit card, Suica, QR, etc.) at a convenience store, the consumption tax is automatically calculated at 8% or 10% depending on item (food vs. household items). The 2% rebate is instantly implemented in the transaction as a discount from the sub-total (items plus tax). For people who don’t want to bother with JRE POINT, paying with Apple Pay Suica at convenience stores is a JAPAN CASHLESS no brainer.

I am still digging but the instant 2% tax discount appears to be the case only for convenience store transactions. Other stores (without the fancy POS systems) calculate the transaction with tax but the CASHLESS rebate is refunded later as outlined.

It will be interesting to see how many stores end up being classified as ‘convenience stores’ for the CASHLESS program as supermarkets are explicitly left out of the the equation. All the major convenience store chains will be onboard, but will AEON ‘My Basket’ stores be classified as a convenience store or a supermarket? It’s a squishy line.

Some quick impressions:

  • everything happens automatically on the backend, there is nothing the customer or merchant needs to do, just follow the usual routine
  • if you pay cash at convenience stores you are throwing away money
  • I can’t wait for the CASHLESS program to expand to DOUTOR so I can kiss Starbucks goodbye for the duration of the program
  • Ditto for MiniStop, 7 Eleven ice coffee sucks and they don’t have those cheesy dog things

UPDATE: MiniStop is on the CASHLESS map now:

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.

Apple’s Secret Weapon

Technology is hard to cover well in a way that’s clear and easy to understand, that educates and elevates without dumbing down the technology or it’s intended audience. Technology like Apple Pay Suica is especially hard to cover well because it is multifaceted: it merges the Apple Pay platform of Global NFC technology deployed on iPhone and Apple Watch, with the Suica Transit Platform of FeliCa NFC deployed for transit and eMoney on a national scale, and how Apple delivers all of this to a global user base.

With so many parts it’s difficult to explain the greatness and importance of Apple Pay Suica, simply and clearly, and what connects it to Apple Card. Ken Bolido who is the production lead and creative director for Austin Evans, has created a video titled Apple’s SECRET Weapon aka Your iPhone has Super Powers…in Japan. Ken ‘get’s it’ and captures all of it brilliantly: why Apple Pay is Apple’s Secret Weapon, how Apple Pay Suica is a perfect embodiment of that secret weapon, and how it relates to Apple Card. If you want to understand any of this and how it will play out, watch Apple’s SECRET Weapon. It’s essential viewing and a perfect primer for the role Apple Pay Suica will play in the 2020 Tokyo Olympics.