Japan Cashless 2021: the Wireless Android NFC Reader Suck Index

You too can have the whole transaction world in your hands with the Android based Square Terminal for just ¥46,980

Now that contactless is everywhere, wireless contactless readers have become very fashionable and popular. Nobody wants wires or checkout lines. All of these systems are built around an Android based reading device connected to the internet payment service via Bluetooth, WiFi or 4G with a main terminal, an iPad or a laptop running payment network software. Convenient though they may be, compared with hard wired NFC reader performance they all suck with different levels of suckiness:

  1. stera: this lovely little ‘NFC antenna under the screen’ piece of shit from SMBC, GMO and Visa Japan is so slow that checkout staff put their hand over the stera screen/reader to keep customers waiting until the device is ready to go. This is followed by the instruction ‘don’t move your device until the reader beeps.’ It’s a 2~4 second wait until it beeps. This is 2014 era ‘you’re holding it wrong’ garbage nonsense. I teased one store manager about the hard wired JREM FeliCa readers that were swapped out with stera, “Those were too fast,” he said. Too fast?!
  2. PAYGATE: Another payment provider associated with GMO, slightly faster than stera but still slow, PAYGATE does’t like Apple Pay Suica•PASMO Express Transit very much. Have of the time it ignores it altogether forcing customers into the 2016 era ‘manually bring up Apple Pay Suica’ authenticate and pay maneuver. Another ‘you’re holding/doing it wrong,’ when the fault is on the checkout system side. Passé and totally unnecessary.
  3. AirPay: It’s weird that the cheap AirPay hardware performs better than PAYGATE or stera, it’s even weirder that AirPay performs better than Rakuten Pay which uses the very same reader but is stera shitshow slow.
  4. Square Terminal has gotten lots of media attention in Japan. Too early to experience it in the field yet but I’m not hopeful. Square Terminal is Android based after all and the NCF antenna under the screen design is the worst performing reader design out there. As one Brazilian reader wrote: “I just don’t like the ones running Android because at least here the software is less reliable and I managed to crash a few one by just taping my phone.”

Yep, that observation matches my experience. Payment network providers need better Android readers, the current crop is too slow getting the payment transaction ready to tap. In this era of endless subcontractor layers in the development process, creating a fast reliable Android based NFC wireless reader might be a tall order, if not impossible. The all over the place wireless NFC reader experience certainly doesn’t boast well for open loop advocates.

UPDATE
I ran across another crappy reader experience (above) and retweeted it. A reader had some questions about it, answered here by an anonymous expert. It basically comes down to poorly executed reader polling or not following Sony polling recommendations for FeliCa cards. This is what is happening in the above retweet. It is also what is going on with PAYGATE Station readers, half of the time the proper code hasn’t loaded correctly although this issue seems to be fixed in new PAYGATE Station checkout installations. Which brings us to the point I was trying to make: these performance issues can be fixed with reader firmware updates or transaction system software updates, but never are.

Wildcard polling involves the reader making a request for system code 0xFFFF and expecting the card/device to list all the system codes that it supports. Wildcard polling won’t work on an Apple Pay device in Express Transit mode – instead, the system code must be explicitly polled for (0x0003 for CJRC, 0x8008 for Octopus). You can cause Suica/Octopus to be automatically selected by sending SENSF_REQ (Polling command, 06) for those services explicitly.

I have verified that doing so with Apple Pay will cause the emulated card to be switched out as appropriate – the IDm value will also change, since Apple Pay emulates each card separately, instead of with a common IDm as with Osaifu Keitai. If you read the Sony documentation, you will see that developers are cautioned to also poll for the specific service codes they want to access if there’s no response to a wildcard poll.

Perhaps your reader doesn’t do this, but it’s fairly big omission…it should be doing explicit polling. Simply polling for service code 0x0003 should wake up Suica if selected as an Express Transit candidate, even if you don’t send any other commands. I’ve verified this with an RC-S380 reader and NFCPay.

Japan Cashless 2020 Retrospect

As we look back on 2020 there are 2 big divides: COVID and cashless. We suddenly found ourselves in a world where all human contact is conducted behind face masks and sheets of clear plastic. Not touching anything not ours is the rule of daily life.

The year started with the Japanese Cashless tax rebate in full swing but the real value of the program, helping smaller merchants to add cashless payments, became clear when the Diamond Princess brought the COVID crisis to Japan big time and real cash suddenly become suspect fomite material. More than anything, COVID fears attached to handling cash drove cashless use in 2020 but are we there yet? Back in July, I said we are. It will be months before official 2020 cashless trend numbers are in, but you don’t need anything more than to ask yourself one simple question:

How much has changed since the October 25, 2016 Apple Pay Japan launch?

Junya Suzuki correctly predicted Apple Pay would be the ‘Black Ships‘ inflection point catalyst for cashless payments in Japan that would change everything. And everything has changed. Cashless is now the first choice that most people want, that most stores want you to use. Cash is the fallback. If grandma want to use it at the supermarket checkout she can take all the time she wants feeding bills and coins into a checkout payment machine. Just one more choice in the every growing payment option menu.

There were other cashless developments in 2020, such as the Yucho Bank security scandal that hit the Docomo Account first, then other online payment services. The end result was that QR Code players (PayPay, Line Pay, etc.) took a hit and for the time being cannot recharge from a bank account. It knocked the wind out of QR Code payment mania that I don’t see returning.

On the transit front the biggest news was the Mobile PASMO Android and Apple Pay PASMO launch. Geographically these only cover the Kanto region but Suica and PASMO combined represent 80% of the Japanese transit IC card market. As Mobile PASMO turned out to be recycled Mobile Suica under the hood, I see it as part of the overall JR East next generation Super Suica that is formally launching in March 2021.

2021 should be an interesting year for contactless payments with Super Suica and VISA Japan finally signing on with Apple Pay. We will see more transit IC card service announcements similar to the Mobile ICOCA one, and if Apple Pay QR Code Payments launch we could see developments in that segment, but 2020 will always be known as the year that Japan finally went cashless.

SEIYU Stores finally add NFC payment support for Apple Pay Suica • PASMO

That didn’t take long. The announcement Walmart was selling majority control of SEIYU over to KKR and Rakuten was made November 16. And what was the first new management move? Adding Suica and Transit IC payment support which means Apple Pay Suica • PASMO and Google Pay Suica can finally, finally be used for paying at checkout. QR Code PayPay has been in place for awhile already. SEIYU also rolled out a new system recently for self checkout and EMV IC chip payments for SEIYU brand Saison cards (other cards have to be signed…yuck). NFC anything has been entirely missing from the SEIYU payments lineup despite the COVID crisis and a huge push for all things cashless, but Walmart has a long antagonistic history with NFC digital wallet payments.

I only noticed the change this evening when I heard the store announcement over the PA. Sure enough Suica signs were plastered at every checkout. It’s weird but somehow fitting that SEIYU is soft launching long overdue NFC contactless payments with Suica. More will come. I’m sure Walmart leaving town had nothing to do with it. Yeah, nothing at all. SEIYU stores were much better under the pre-Walmart Seibu management. Hopefully this marks a return to better service and clean modern stores.

App Clips at Kitasando Coffee

Kitasando Coffee was one of the Japan debut sites for App Clips. I finally had time to check it out today. The overall experience was similar to the Starbucks app mobile order and pay. Regulars would use the full blown Coffee App but I wanted to see how fast the App Clip ‘point and pay’ experience would be.

My iPhone 11 NFC reader mode kicked in and launched the Coffee App Clip, I ordered and paid with Apple Pay, all just under a minute even with first timer ‘what do I do now’ pauses, then waited for the order to be filled. There was no ‘Sign in with Apple ID’ step, just point, order, pay, pickup. The video shows the whole process with the order wait time edited out.

App Clips does a very good job of utilizing NFC reader mode and loading time with 4G LTE was also good. I still have doubts about the experience in a marginal WiFi environment (the WiFi Assist factor) and hope to test different places as App Clips gain traction. Bottom line: if NFC with reader mode is this slick, why would anybody bother with QR or App Clip Codes?

UPDATE
iOS 14.3 beta has support for Apple designed App Clip Code scanning. Here is a quick screen recording of the scan process and animation. The App Clip Code is a photo of the ExxonMobile gas pump stickers that launched October 22. The App Clip does not load because the ExxonMobile App is not available in Japan.

Dear Jane, we fucked up, sincerely MTA

The piecemeal MTA OMNY rollout is a lesson how not to do a transition from old system to new system. A case where poor design, poor management choices and unanticipated user interaction, each insignificant in isolation, snowball into a nagging long term problem.

The problem goes like this:

(1) Apple Pay Express Transit is opted in by default and iPhone users don’t always know it’s on. They don’t care about using Apple Pay credit cards on OMNY anyway because fare options are limited and OMNY isn’t installed everywhere and won’t be until at least the end of next year. They use good old MetroCard and put iPhone away in the right pocket or purse carried on the right shoulder.

(2) When the user gets to a OMNY fare gate they swipe MetroCard with its peculiar forward swipe motion on the reader which is located above and behind the OMNY NFC reader, which is positioned low and angled at pocket level. As “MetroCard sucks, it may take several (forward) swipes to enter”, the user leans into the gate while doing this and boom: OMNY reader activates iPhone Express Transit and charges fare without the user knowing it.

Default opt in Express Transit has been with us ever since Apple Pay Suica arrived in 2016. But transit cards are not credit cards and everything was fine. Things got sticky when iOS 12.3 introduced EMV Express Transit that uses bank issued credit/debit/prepaid cards for transit on Apple certified open loop systems. Currently these are Portland HOP, NYC OMNY and London TfL.

HOP and TfL don’t have problems with Express Transit. Both systems use contactless exclusively. HOP has stand alone validators, not gates. TfL gates have the NFC reader located on the top. OMNY on the other hand will have MetroCard swipe cards around for years to come: the OMNY transit card replacement is still in development with no release date. With the slow transition pace and current gate design expect the OMNY Express Transit problem to be around until MetroCard is dead, and OMNY is complete with the new tap only card.

In retrospect MTA should have done it this way: (1) rollout out the OMNY card MetroCard replacement first and add open loop support as the very last thing, (2) design better OMNY gates in two kinds, dual mode NFC + swipe, and single mode NFC only. This way MTA stations could do what JR East stations do: start with single mode tap only express gates on the edges and dual mode gates in the middle. As the transition progresses the dual mode gates get fewer and pushed to the sides with single mode gates taking over.

Apple could help by keeping automatic Express Transit opt in only for native transit cards (Suica, SmarTrip etc.). EMV Express Transit should always be a manual opt in. I understand Apple’s perspective: they want to present Apple Pay Express Transit as a seamless one flavor service, not good/better/best Express Transit flavors. The reality however is that the current technology powering EMV open loop fare systems isn’t up to native transit card standards. Apple can’t fix that.

Unfortunately MTA has taken the dumb path of blaming Apple instead of fixing their own problems. New York deserves a world class modern transit system, OMNY is an important step in building one. MTA management performance so far doesn’t inspire much confidence. Let’s hope they focus on the rollout and deliver it without more delays or problems.